<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 1999
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: 0-10723
BOLT TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Connecticut 06-0773922
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Four Duke Place, Norwalk, Connecticut 06854
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 853-0700
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange 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 [ ]
At January 19, 2000 there were 5,388,378 shares of common stock, without par
value, outstanding.
1
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C>
Part I - Financial Information:
Item 1. Financial Statements.
Consolidated statements of income - three and six months ended
December 31, 1999 and 1998....................................... 3
Consolidated balance sheets -
December 31, 1999 and June 30, 1999.............................. 4
Consolidated statements of cash flows -
six months ended December 30, 1999 and 1998...................... 5
Notes to consolidated financial statements....................... 6-10
Item 2. Management's discussion and analysis of financial
condition and results of operations.............................. 11-14
Item 3. Quantitative and Qualitative Disclosures about Market Risk....... 14
Part II - Other Information:
Item 4. Submission of Matters to a Vote of Security Holders.............. 14
Item 6. Exhibits and reports on Form 8-K................................. 14
Signatures....................................................... 15
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
---------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ----------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Sales................................ $3,233,000 $5,849,000 $7,291,000 $11,209,000
---------- ---------- ---------- -----------
Costs and Expenses:
Cost of sales........................ 1,720,000 2,886,000 3,752,000 5,689,000
Research and development............. 81,000 112,000 206,000 162,000
Selling, general and administrative.. 1,077,000 903,000 2,134,000 1,844,000
Amortization of intangibles.......... 166,000 57,000 331,000 114,000
Interest expense..................... 133,000 - 274,000 -
Interest income...................... (24,000) (37,000) (53,000) (63,000)
---------- ---------- ---------- -----------
3,153,000 3,921,000 6,644,000 7,746,000
---------- ---------- ---------- -----------
Income before income taxes............... 80,000 1,928,000 647,000 3,463,000
Provision for income taxes............... 40,000 147,000 302,000 147,000
---------- ---------- ---------- -----------
Net Income........................... $ 40,000 $1,781,000 $ 345,000 $ 3,316,000
========== ========== ========== ===========
Earnings per share:
Basic.................................. $ 0.01 $ 0.34 $ 0.06 $ 0.63
Diluted................................ $ 0.01 $ 0.33 $ 0.06 $ 0.62
Shares Outstanding:
Basic.................................. 5,388,378 5,262,882 5,379,378 5,247,680
Diluted................................ 5,406,791 5,351,722 5,411,081 5,361,673
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
---------------------------
ASSETS
------
December 31, June 30,
1999 1999
(unaudited)
------------ -----------
Current Assets:
Cash and cash equivalents....................... $ 1,975,000 $ 3,500,000
Accounts receivable, net........................ 2,526,000 2,208,000
Inventories..................................... 5,006,000 5,413,000
Deferred income taxes........................... 1,106,000 1,091,000
Other........................................... 127,000 161,000
----------- -----------
Total current assets......................... 10,740,000 12,373,000
----------- -----------
Goodwill, net..................................... 12,331,000 12,610,000
Property and Equipment, net....................... 1,391,000 1,433,000
Deferred Income Taxes............................. 1,174,000 1,403,000
Other Assets...................................... 55,000 68,000
----------- -----------
Total assets................................. $25,691,000 $27,887,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Current maturities of long-term debt............ $ 1,700,000 $ 1,700,000
Accounts payable................................ 338,000 549,000
Accrued liabilities............................. 927,000 1,748,000
Income taxes payable............................ 48,000 725,000
----------- -----------
Total current liabilities.................... 3,013,000 4,722,000
Long-term Debt.................................... 4,450,000 5,300,000
----------- -----------
Total liabilities............................ 7,463,000 10,022,000
Stockholders' Equity:
Common Stock.................................... 26,135,000 26,117,000
Accumulated deficit............................. (7,907,000) (8,252,000)
----------- -----------
Total stockholders' equity...................... 18,228,000 17,865,000
----------- -----------
Total liabilities and stockholders' equity. $25,691,000 $27,887,000
=========== ===========
See Notes to Consolidated Financial Statements.
4
<PAGE>
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
--------------------------------
<TABLE>
<CAPTION>
Six Months Ended
December 31,
----------------
1999 1998
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income.............................................. $ 345,000 $3,316,000
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization....................... 470,000 142,000
Deferred income taxes............................... 214,000 (68,000)
----------- ----------
1,029,000 3,390,000
Changes in operating assets and liabilities:
Accounts receivable................................. (318,000) (121,000)
Inventories......................................... 407,000 (363,000)
Other assets........................................ 43,000 (67,000)
Accounts payable and accrued liabilities............ (1,032,000) (723,000)
Income taxes payable................................ (727,000) -
----------- ----------
Net cash (used) provided by operating activities.. (598,000) 2,116,000
----------- ----------
Cash Flows From Investing Activities:
Purchase of property and equipment...................... (95,000) (70,000)
----------- ----------
Net cash used in investing activities............. (95,000) (70,000)
----------- ----------
Cash Flows From Financing Activities:
Repayment of long-term debt............................. (850,000) -
Exercise of stock options............................... 18,000 41,000
----------- ----------
Net cash used in financing activities............... (832,000) 41,000
----------- ----------
Net (decrease) increase in cash and cash equivalents......... $(1,525,000) $2,087,000
=========== ==========
Supplemental disclosure of cash flow information:
Income taxes paid....................................... $ 846,000 $ 328,000
Interest paid........................................... $ 231,000 -
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
(UNAUDITED)
-----------
Note 1 - Basis of Presentation
- ------------------------------
The consolidated balance sheet as of December 31, 1999, the consolidated
statements of income for the three month and six month periods ended December
31, 1999 and 1998 and the consolidated statements of cash flows for the six
month periods ended December 31, 1999 and 1998 are unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such financial
statements have been included. Such adjustments consisted only of normal
recurring items. Interim results are not necessarily indicative of results for a
full year. It is suggested that the December 31, 1999 consolidated financial
statements be read in conjunction with the consolidated financial statements and
notes included in the Company's Annual Report on Form 10-K for the year ended
June 30, 1999.
Note 2 - Acquisition
- --------------------
In April 1999, the Company acquired all of the outstanding common stock of
A-G Geophysical Products, Inc. ("AG"). AG manufactures underwater electrical
connectors and cables, air gun signature hydrophones and pressure transducers
used in the marine seismic industry. The purchase price totaled $13,783,000 and
consisted of $6,100,000 in cash; a note to the selling shareholder for
$7,000,000; 63,492 shares of common stock valued at $500,000 and acquisition
costs of $183,000. The results of operations of AG have been included in the
consolidated statement of income from its acquisition date.
The following table presents the unaudited pro forma consolidated results
of operations of the Company and AG for the six months ended December 31, 1998.
The pro forma results are not necessarily indicative of the actual results of
operations that might have occurred, nor are they necessarily indicative of
results in the future.
Six Months Ended
December 31, 1998
-----------------
Sales $16,629,000
Net income $ 4,254,000
Earnings per share:
Basic $ 0.80
Diluted $ 0.78
6
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
(CONTINUED)
-----------
Note 3 - Debt
- -------------
Credit Facility
The Company has a $2,500,000 unsecured credit facility which expires in
January 2003. Maximum borrowings under the facility decrease $500,000 each
January and bear interest at the prime rate. The credit facility contains
covenants which include: (i) prohibition of additional indebtedness; (ii)
minimum tangible net worth of $4,998,000 at June 30, 1999 which increases by 75%
of net income each year and; (iii) a ratio of total liabilities to tangible net
worth of not more than 2 to 1 through December 31, 2000. This ratio decreases to
1.25 to 1 after December 31, 2000. Also, under the terms of the agreement the
Company must maintain minimum debt service of not less than 2 to 1 and cannot
have two consecutive quarterly losses. The Company is in compliance with these
covenants at December 31, 1999.
8.25% Non-Negotiable Promissory Note
In connection with the acquisition of AG, the Company issued a $7,000,000
note to the selling shareholder for a portion of the purchase price. The note
has a final maturity of April 2002 and requires minimum principal payments of
$425,000 per quarter. The Company has pledged the assets and common stock of AG
as collateral for the note. Also under the terms of the note the Company must
have AG maintain a current ratio of no less than 3 to 1 and maintain minimum
tangible net worth of $4,000,000.
Note 4 - Income Taxes
- ---------------------
At December 31, 1999, the Company had net operating loss carry-forwards of
approximately $4,280,000 which expire in years 2002 through 2007. Financial
Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes", requires
that the tax benefit of net operating loss ("nol") carry-forwards be recorded as
an asset to the extent that management assesses the utilization of such nol
carry-forwards to be "more likely than not". Based primarily upon the Company's
recent earnings history and expected future levels of taxable income, management
believes that it is more likely than not that it will realize the benefit of its
net deferred tax asset. For the six months ended December 31, 1998 the Company
reduced the valuation allowance for deferred taxes by $68,000. The amount of the
net deferred tax asset recorded could be adjusted if estimates of future taxable
income during the carry-forward period are revised.
7
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
(CONTINUED)
-----------
Note 4 - Income Taxes (cont'd)
- ------------------------------
Components of income tax (benefit) expense for the six months ended
December 31, 1999 and 1998 follow:
December 31, December 31,
1999 1998
---- ----
Current:
State.................................. $ 70,000 $215,000
-------- --------
Deferred:
Federal................................ 232,000 (68,000)
-------- --------
Income tax expense......................... $302,000 $147,000
======== ========
Note 5 - Inventories
- --------------------
Inventories, net of reserves, are comprised of the following:
December 31, June 30,
1999 1999
---- ----
Raw materials and sub-assemblies....... $4,394,000 $4,947,000
Work-in process........................ 612,000 466,000
---------- ----------
$5,006,000 $5,413,000
========== ==========
Note 6 - Property and Equipment
- -------------------------------
Property and equipment are comprised of the following:
December 31, June 30,
1999 1999
---- ----
Building and leasehold improvements.... $ 540,000 $ 534,000
Geophysical equipment.................. 460,000 460,000
Machinery and equipment................ 5,663,000 5,573,000
Equipment held for rental.............. 480,000 480,000
----------- -----------
7,143,000 7,047,000
Less accumulated depreciation..... (5,752,000) (5,614,000)
----------- -----------
$ 1,391,000 $ 1,433,000
=========== ===========
8
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(CONTINUED)
-----------
Note 7 - Earnings Per Share
- ---------------------------
As required by Statement of Financial Accounting Standards No. 128 (FAS
128), "Earnings Per Share", the Company must report both basic and diluted
earnings per share. Basic earnings per share is computed by dividing net income
by the average number of common shares outstanding during the year. Diluted
earnings per share is computed by dividing net income by the average number of
common shares outstanding assuming dilution, the calculation of which assumes
that all stock options are exercised at the beginning of the period and the
proceeds used to purchase shares at the average market price for the period. The
following is a reconciliation from basic earnings per share to diluted earnings
per share for the three month and six month periods ended December 31, 1999 and
1998.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ----------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net earnings available to common
stockholders $ 40,000 $1,781,000 $ 345,000 $3,316,000
========== ========== ========== ==========
Weighted average number of common
shares outstanding 5,388,378 5,262,882 5,379,378 5,247,680
Common stock equivalents - stock options 18,413 88,840 31,703 113,993
---------- ---------- ---------- ----------
Weighted average number of common shares and
common share equivalents outstanding 5,406,791 5,351,722 5,411,081 5,361,673
========== ========== ========== ==========
Basic earnings per share $ 0.01 $ 0.34 $ 0.06 $ 0.63
Diluted earnings per share $ 0.01 $ 0.33 $ 0.06 $ 0.62
</TABLE>
9
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(CONTINUED)
-----------
Note 8 - Segment Information
- ----------------------------
The Company's reportable segments are : (1) geophysical equipment and (2)
industrial clutches. The following table provides selected financial
information for both of the Company's segments for the six months ended December
31, 1999 and 1998.
Six months ended December 31, 1999
- ----------------------------------
Geophysical Industrial
Equipment Clutches Total
--------- -------- -----
Sales $ 5,648,000 $1,643,000 $ 7,291,000
Interest income 53,000 - 53,000
Interest expense 274,000 - 274,000
Depreciation and amortization 344,000 126,000 470,000
Income before income taxes 281,000 366,000 647,000
Segment assets 19,589,000 6,102,000 25,691,000
Fixed asset additions 61,000 34,000 95,000
Six months ended December 31, 1998
- ----------------------------------
Geophysical Industrial
Equipment Clutches Total
--------- -------- -----
Sales $ 9,811,000 $1,398,000 $11,209,000
Interest income 63,000 - 63,000
Depreciation and amortization 18,000 124,000 142,000
Income before income taxes 3,227,000 236,000 3,463,000
Segment assets 12,903,000 6,193,000 19,096,000
Fixed asset additions 55,000 15,000 70,000
The Company does not allocate income taxes to its segments.
10
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Cautionary Statement for Purposes of Forward-Looking Statements
- ---------------------------------------------------------------
Certain statements contained herein and elsewhere may be deemed to be
forward-looking within the meaning of The Private Securities Litigation Reform
Act of 1995 and are subject to the "safe harbor" provisions of that act,
including without limitation, statements concerning future sales, earnings,
costs, expenses, asset recoveries, working capital, capital expenditures,
financial condition, and other results of operations. Such statements involve
risks and uncertainties. Actual results could differ materially from the
expectations expressed in such forward-looking statements.
Demand for the Company's geophysical equipment is dependent upon the level
of world-wide oil and gas exploration activity. This activity depends primarily
on oil and gas prices. Historically these markets have been volatile. Factors
that cause this volatility are consumer demand, weather, world political
conditions and overall economic conditions. Volatility in oil and gas prices has
resulted in a reduction in exploration activity which has decreased the demand
for geophysical equipment.
Liquidity and Capital Resources
- -------------------------------
For the six months ended December 31, 1999 cash and cash equivalents
decreased $1,525,000 compared to an increase of $2,087,000 for the six months
ended December 31, 1998. The primary causes for the decrease in cash and cash
equivalents for the current six month period were the significantly reduced
level of sales and net income, the repayment of $850,000 of long-term debt
related to the acquisition of A-G Geophysical Products, Inc. and the reduction
in current liabilities of $1,759,000 from the June 30, 1999 level.
For the three months ended December 31, 1999, the Company used $95,000 for
capital expenditures. The Company does not anticipate capital expenditures for
the current fiscal year to exceed $150,000.
The Company has a $2,500,000 unsecured credit facility which matures in
2003. Available borrowings under the terms of the agreement decrease by $500,000
each year. Any borrowings under the agreement bear interest at the prime rate.
There are no borrowings outstanding under this agreement at December 31, 1999.
As part of the consideration for the acquisition of AG Geophysical in April
1999, the Company issued a note for $7,000,000. The note bears interest at 8.25%
payable monthly and requires quarterly principal payments of $425,000 with a
final maturity in April 2002. The Company pledged the assets and common stock of
AG as collateral for the note.
Under the terms of the January 1998 asset purchase agreement for Custom
Products, the Company may be required to make maximum additional payments to the
former owners of Custom Products of $4,000,000 if net sales of Custom Products
increase to certain levels by December 2002. A payment was not required for the
twelve months ended December 31, 1999 or December 31, 1998 because the sales of
Custom Products did not meet the amount specified in the asset purchase
agreement.
11
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(CONTINUED)
-----------
Liquidity and Capital Resources (cont'd)
- ----------------------------------------
The Company is owner of a one-half interest in its administrative and
engineering building located in Norwalk, Connecticut through a joint venture
agreement. The agreement expired in July 1999. Under the terms of the agreement,
the Company can purchase the one-half interest owned by its joint venture
partner, estimated at approximately $300,000. The Company is currently exploring
various alternatives with its joint venture partner. If the Company does
purchase the building, it will use existing cash on hand.
On October 5, 1998, the Company announced that its board of directors
approved a stock repurchase program under which the Company was authorized to
buy up to 500,000 shares of its common stock in open market or private
transactions. The Company will use its cash flow from operations and existing
cash balances for the repurchase of any shares. The Company has not repurchased
any shares under the program.
Current cash and cash equivalent balances, existing borrowing capacity and
projected cash flow from operations are currently considered adequate to meet
foreseeable operating needs.
The Company believes that inflation and changing prices have not had a
material effect on the Company's revenues and profitability.
Year 2000 ("Y2K") Compliance
- ----------------------------
The Company did not experience any disruptions because of Y2K issues. All
computer systems are Y2K compliant.
Results of Operations
- ---------------------
Six Months Ended December 31, 1999 Compared to Six Months
- ---------------------------------------------------------
Ended December 31, 1998
- -----------------------
The consolidated statement of income for the six months end December 31,
1999 includes the results of operations of A-G Geophysical which was acquired in
April 1999.
Sales for the six months ended December 31, 1999 decreased $3,918,000 or
35% from the corresponding period last year. Sales of marine air guns and
replacement parts decreased $6,486,000 because of the continued decrease in
exploration spending starting in early 1999 which caused a decline in product
demand. Partially offsetting this decline was the sales of $2,323,000 from AG
and an increase in sales of industrial clutches of $245,000.
12
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
(CONTINUED)
-----------
Results of Operations (cont'd)
- ------------------------------
Cost of sales as a percentage of sales was 51% for the six months ended
December 31, 1999 and 1998. The effects of the lower operating efficiencies
caused by the decreased demand for marine air guns and replacement parts
increased the cost of sales by 5 percentage points. This increase was offset by
favorable operating margins at both AG and Custom Products.
Research and development costs increased by $44,000 from the corresponding
period of the prior year as a result of activities associated with the final
development and testing of the Company's new marine air gun.
Selling, general and administrative expense increased $290,000 over the
prior year's six month period. The inclusion of AG added $628,000 to expense.
Offsetting the added expenses from AG was a $391,000 decrease in incentive
compensation expense because of the reduced earnings for the period.
Amortization of intangibles increased $217,000 because of the acquisition
of AG in April 1999. The Company is amortizing the goodwill relating to
acquisitions over twenty years.
Interest expense amounted to $274,000 for the six months and represents
amounts paid in connection with the AG acquisition. Interest income decreased
$10,000 for the same period due to lower balance of short-term investments.
The provision for income taxes for the six month period was $302,000, an
effective tax rate of 47%. This amount is higher than the statutory federal rate
of 34% principally because of the effect of the amortization of the goodwill
related to the AG acquisition which is not deductible for income tax purposes
and the effect of state income taxes. The provision for income taxes for the
first six months of fiscal 1998 was $147,000, an effective tax rate of 4%
because of the utilization of previously reserved net operating loss carry-
forwards.
Three Months Ended December 31, 1999 Compared to Three Months
- -------------------------------------------------------------
Ended December 31, 1998
- -----------------------
The consolidated statement of income for the three months ended December
31, 1999 includes the results of operations of A-G Geophysical which was
acquired in April 1999.
Sales for the quarter ended December 31, 1999 compared to the quarter ended
December 31, 1998 decreased $2,616,000 or 45%. Sales of marine air guns and
replacement parts decreased by $3,766,000 because of the same factors that
caused the decrease for the six month period. The inclusion of AG for the
quarter increased sales by $1,094,000 and sales of industrial clutches increased
$56,000.
Cost of sales as a percentage of sales increased from 49% to 53% for the
quarter. The effects of the lower operating efficiencies associated with the
decreased demand for marine air guns and replacement parts increased the cost of
sales percentage by 8 percentage points. The favorable operating margins at
Custom Products favorably effected the cost of sales percentage by 4 percentage
points.
Research and development costs decreased $31,000 for the quarter as the
Company completed most of its development efforts related to its new marine air
gun.
13
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
(CONTINUED)
-----------
Results of Operations (cont'd)
- ------------------------------
Selling, general and administrative expense increased $174,000 for the
quarter. The inclusion of AG accounted for $345,000 of the increase. Reduced
incentive compensation expenses of $222,000 offset part of the expense increase.
Amortization of intangibles increased $109,000 because of the acquisition
of AG in April 1999.
Interest expense amounted to $133,000 for the quarter and represents
amounts paid in connection with the AG acquisition. Interest income decreased
by $13,000 for the quarter due to lower balance of short-term investments.
The provision for income taxes for the quarter was $40,000, an effective
tax rate of 50%. This provision is more than the statutory rate for the same
reasons that effected the tax provision for the six month period. The provision
for income taxes for the second quarter was $147,000, an 8% effective rate.
Second quarter tax expense was reduced by previously reserved net operating loss
carry-forwards.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
- -------------------------------------------------------------------
None
PART II- OTHER INFORMATION
--------------------------
Item 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
The 1999 Annual Meeting of Stockholders of the Company was held on November
23, 1999 for the following purpose: the election of four directors, each for a
three year term expiring in 2002.
The vote tabulation in the election of directors was as follows: Kevin M.
Conlisk received 4,573,134 affirmative votes with 147,795 votes withheld; Joseph
Espeso received 4,596,684 affirmative votes with 124,245 votes withheld; Joseph
Mayerick, Jr. received 4,599,484 affirmative votes with 124,245 votes withheld
and Gerald A. Smith received 4,573,104 votes with 147,825 votes withheld.
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits.
--------
(27) Financial Data Schedule.
(b) Reports on Form 8-K.
-------------------
No reports on Form 8-K were filed by the Company during October,
November, and December 1999.
14
<PAGE>
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.
/s/ Raymond M. Soto
-----------------------------
Chairman, President and Chief Executive Officer
(Principal Financial Officer)
/s/ Alan Levy
-----------------------------
Vice President-Finance
Secretary and Treasurer
(Principal Accounting Officer)
January 26, 2000
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,975,000
<SECURITIES> 0
<RECEIVABLES> 2,526,000
<ALLOWANCES> 0
<INVENTORY> 5,006,000
<CURRENT-ASSETS> 10,740,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 25,691,000
<CURRENT-LIABILITIES> 3,013,000
<BONDS> 0
0
0
<COMMON> 26,135,000
<OTHER-SE> (7,907,000)
<TOTAL-LIABILITY-AND-EQUITY> 25,691,000
<SALES> 7,291,000
<TOTAL-REVENUES> 7,291,000
<CGS> 3,752,000
<TOTAL-COSTS> 3,752,000
<OTHER-EXPENSES> 2,671,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 274,000
<INCOME-PRETAX> 647,000
<INCOME-TAX> 302,000
<INCOME-CONTINUING> 345,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 345,000
<EPS-BASIC> .06
<EPS-DILUTED> .06
</TABLE>
