<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the quarterly period ended April 1, 1995
-------------------
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the transition period from to
------ ------
Commission file number 0-12094
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ACUITY IMAGING, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 04-2688311
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9 Townsend West, Nashua, New Hampshire 03063
- --------------------------------------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number (603) 598-8400
-----------------
Former name, former address and former fiscal year, if changed since last
report: Not Applicable
-----------------
Check whether the issuer (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
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As of May 10, 1995 issuer had outstanding 2,461,213 shares of Common Stock.
1
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ACUITY IMAGING, INC. AND SUBSIDIARIES
-------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Part I. Financial Information
Condensed consolidated balance sheets at
April 1, 1995 and December 31, 1994................... 3
Condensed consolidated statements of operations for
the thirteen weeks ended April 1, 1995
and April 2, 1994..................................... 4
Condensed consolidated statements of cash flows for
the thirteen weeks ended April 1, 1995
and April 2, 1994..................................... 5
Notes to condensed consolidated financial statements... 6
Management's discussion and analysis................... 8
Part II. Other Information...................................... 13
</TABLE>
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ACUITY IMAGING, INC. AND SUBSIDIARIES
- -------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
April 1, December 31,
1995 1994
Notes (Unaudited) (Audited)
----- ----------- ---------
<S> <C> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and equivalents $ 279 $ 529
Accounts receivable, net 3,228 3,605
Inventories 1,781 1,665
Other current assets 10 174 28
-------- --------
Total current assets 5,462 5,827
PROPERTY AND EQUIPMENT - Net 988 873
OTHER ASSETS 20 20
-------- --------
TOTAL ASSETS $ 6,470 $ 6,720
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ----------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 1,807 $ 1,573
Advances from customers 99 193
Accrued expenses 1,010 1,591
Loan payable 9 1,250 -
-------- --------
Total current liabilities 4,166 3,357
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LOAN PAYABLE 8 - 1,015
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STOCKHOLDERS' EQUITY:
Common stock, $.01 par value;
authorized, 10,000,000 shares,
issued, 2,458,680 shares at
April 1, 1995 and
2,389,532 shares at December 31, 1994 25 24
Additional paid-in capital 61,161 61,081
Accumulated deficit (59,029) (58,888)
Cumulative translation adjustment 147 131
-------- --------
Total stockholders' equity 2,304 2,348
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,470 $ 6,720
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
3
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ACUITY IMAGING, INC. AND SUBSIDIARIES
- -------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Thirteen Weeks ended
-----------------------
April 1, April 2,
Notes 1995 1994
----- ---- ----
<S> <C> <C> <C>
NET SALES AND SERVICE REVENUE 2 $4,895 $5,189
------ ------
COSTS AND EXPENSES:
Cost of sales and service revenue 2,121 2,101
Research and development 1,089 938
Marketing and selling 1,469 1,250
General and administrative 337 373
------ ------
Total costs and expenses 5,016 4,662
------ ------
INCOME (LOSS) FROM OPERATIONS (121) 527
INTEREST EXPENSE - Net 20 73
------ ------
INCOME (LOSS) BEFORE INCOME TAXES (141) 454
PROVISION FOR INCOME TAXES - 44
------ ------
NET INCOME (LOSS) $ (141) $ 410
====== ======
NET INCOME (LOSS) PER SHARE 5 $ (.06) $ .16
====== ======
WEIGHTED AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES OUTSTANDING 5 2,417 2,579
====== ======
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
ACUITY IMAGING, INC. AND SUBSIDIARIES
- -------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Thirteen Weeks ended
-----------------------
April 1, April 2,
Notes 1995 1994
----- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(141) $ 410
----- -------
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 131 77
Interest expense - 84
Increase (decrease) in cash
resulting from a change in:
Accounts receivable 377 (199)
Inventories (116) 16
Other 10 (146) (13)
Accounts payable 234 (165)
Advances from customers 8 (94) 1,179
Accrued expenses (581) (477)
----- -------
Total adjustments (195) 502
----- -------
Net cash provided by (used in)
operating activities (336) 912
----- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment (246) (209)
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Net cash used in investing
activities (246) (209)
----- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 81 1
Proceeds from bank loan 235 1,500
Payment of short term debt 8 - (3,419)
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Net cash provided by (used in)
financing activities 316 (1,918)
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EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND EQUIVALENTS 16 (1)
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INCREASE (DECREASE) IN CASH AND EQUIVALENTS (250) (1,216)
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 529 2,324
----- -------
CASH AND EQUIVALENTS, END OF PERIOD $ 279 $ 1,108
===== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
INTEREST PAID DURING THE PERIOD $ 22 $ 1,269
===== =======
INCOME TAXES PAID DURING THE PERIOD $ 28 $ 56
===== =======
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
ACUITY IMAGING, INC. AND SUBSIDIARIES
- -------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. In the opinion of management, the accompanying condensed consolidated
financial statements reflect all adjustments which are necessary to present
fairly the financial position as of April 1, 1995 (unaudited) and December
31, 1994 and the unaudited results of operations and cash flows for the
thirteen weeks ended April 1, 1995 and April 2, 1994. Certain information
and footnote disclosures normally included in the annual financial
statements which are prepared in accordance with generally accepted
accounting principles have been condensed or omitted. Accordingly, Acuity
Imaging, Inc. (the "Company") believes that although the disclosures are
adequate to make the information presented not misleading, the financial
statements should be read in conjunction with the footnotes incorporated in
the Company's Annual Report on Form 10-KSB for the year ended December 31,
1994.
2. On January 26, 1994 Acuity Imaging, Inc. was formed by the merger (the
"Merger") of Automatix Incorporated ("Automatix") and Itran Corp.
("Itran"), a privately held corporation, with Automatix as the surviving
entity. In connection with the Merger, the Company effected a 1 for 20
reverse stock split. The Merger has been accounted for as a pooling of
interests; accordingly, the Company has restated its historical
consolidated financial statements and financial information to reflect the
combined financial condition and results of operations of Automatix and
Itran.
3. On April 27, 1995 the Company and Robotic Vision Systems, Inc. ("RVSI") of
Hauppauge, New York signed an Agreement and Plan of Merger and
Reorganization whereby RVSI would acquire all of Acuity's outstanding
stock. The transaction is intended to be completed as a tax free
reorganization and to be accounted for as a pooling of interests. To
effect the transaction RVSI would issue 1.072 shares of its common stock in
exchange for each outstanding share of Acuity common stock. In addition,
Acuity's outstanding stock options would be exchanged for options on RVSI's
common stock in the same 1.072 to one ratio. Consummation of the merger is
subject to conditions customary for transactions of this nature, including
approval by the stockholders of each of Acuity and RVSI.
4. The condensed consolidated financial statements include the financial
statements of the Company and its subsidiaries. All significant
intercompany accounts and transactions have been eliminated in
consolidation.
5. Income per share is computed using the weighted average number of common
and common equivalent shares outstanding during the respective periods,
including the assumed net shares issuable (treasury stock method) upon
exercise of stock options and warrants when dilutive. Fully diluted and
primary income per common share do not differ materially for either of the
periods presented.
6. Certain amounts in the 1994 financial statements have been reclassified to
conform to the 1995 presentation.
7. The results of operations for the thirteen weeks ended April 1, 1995 are
not necessarily indicative of the results for the entire fiscal year.
8. On April 1, 1994 the Company retired its $3.4 million subordinated notes
which were due on June 30, 1994. In connection with this retirement the
Company borrowed $1.5 million against its then $3.5 million bank line of
credit. The additional cash utilized in the retirement came from
operations and from a customer down payment of approximately $1.2 million
on a $3.6 million contract received in March 1994.
6
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9. As of the balance sheet date of April 1, 1995 the Company was in default of
certain of the covenants on its outstanding bank line of credit agreement
and as such the "Loan Payable" amount has been classified as a short term
liability. The Company has obtained forbearance from such defaults from
its bank until the earlier of (i) August 15, 1995 or (ii) any termination
of the Company's arrangement for its contemplated merger with RVSI without
such merger having been consummated. In the event that either of the two
events occurs, the Company would need to enter into negotiations with its
bank in an attempt to resolve the termination of such forbearance.
10. Other current assets of $174,000 at April 1, 1995 include $106,000 of
prepaid merger related expenses associated with the proposed RVSI merger
(see Note 3 to Condensed Consolidated Financial Statements).
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
On January 26, 1994 Acuity Imaging, Inc. was formed by the merger (the
"Merger") of Automatix Incorporated ("Automatix") and Itran Corp. ("Itran"), a
privately held corporation, with Automatix as the surviving entity. In
connection with the Merger, the Company effected a 1 for 20 reverse stock split.
The Merger has been accounted for as a pooling of interests; accordingly, the
Company has restated its historical consolidated financial statements and
financial information to reflect the combined financial condition and results of
operations of Automatix and Itran.
On April 27, 1995 the Company and Robotic Vision Systems, Inc. ("RVSI") of
Hauppauge, New York signed an Agreement and Plan of Merger and Reorganization
whereby RVSI would acquire all of Acuity's outstanding stock. The transaction
is intended to be completed as a tax free reorganization and to be accounted for
as a pooling of interests. To effect the transaction RVSI would issue 1.072
shares of its common stock in exchange for each outstanding share of Acuity
common stock. In addition, Acuity's outstanding stock options would be
exchanged for options on RVSI's common stock in the same 1.072 to one ratio.
Consummation of the merger is subject to conditions customary for transactions
of this nature, including approval by the stockholders of each of Acuity and
RVSI.
RESULTS OF OPERATIONS
Total revenues decreased approximately 6% in the first quarter of 1995 as
compared to the first quarter of 1994. The decrease was primarily a result of a
12% decrease in the core business of machine vision systems and software
revenues partially offset by an 8% increase in Customer Service revenues
combined with a 77% increase in Engineering Service revenues. The decrease in
total revenues was primarily a result of the Company's lack of securing any one
or two customers which have traditionally accounted for a significant percentage
of the Company's revenues, combined with a somewhat changing product line which
included certain newly introduced products which did not achieve their projected
sales level during the quarter. In addition, the decrease in total revenues was
also a result of increased sales through the Company's distribution network, as
a percentage of total revenues, to which the Company sells at a percentage off
of its standard list prices.
Revenues by product line are summarized in the following table:
<TABLE>
<CAPTION>
Thirteen Weeks Ended
-----------------------------
April 1, April 2,
1995 1994
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$ % $ %
- - - -
<S> <C> <C> <C> <C>
Vision Systems and Software.... 3,915 80 4,452 86
Customer Service and Training.. 501 10 466 9
Engineering Services........... 479 10 271 5
------ --- ------ ---
Total........................ $4,895 100% $5,189 100%
====== === ====== ===
</TABLE>
Vision Systems and Software include vision product and application
engineering revenues. Customer Service and Training represents revenues from
the sale of spare parts, training and maintenance agreements. Engineering
Services include both vision and robotic software development contracts, robotic
hardware sales, and U.S. government sponsored SBIR (Small Business Innovation
Research) revenues.
Vision systems designed for the general purpose market comprise the largest
portion of the Company's revenues. In the first quarter of 1995 and also in the
first quarter of 1994 general purpose
8
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vision revenues accounted for 62% of total Company revenues for each of such
quarters. In 1994 general purpose vision revenues represented 69% of total
Company revenues. The Company believes that this market will be its fastest
growing market although quarterly fluctuations are possible. The Company's
products for the general purpose market include the PV60(R) (Powervision 60(R)),
PV90(R) (Powervision 90(R)), AV100(R) (Autovision 100(R)), IVS(R) (Intelligent
Visual Sensors), the MVP(R) (Modular Vision Processor) and the newly introduced
Mentorvision/TM/.
Vision systems designed for niche (application specific) markets accounted
for 18% of total Company revenues in the first quarter of 1995 as compared to
24% in the first quarter of 1994. In 1994 such revenues represented 17% of
total Company revenues. The Company believes that this market will continue to
be an important part of its business but its growth is not expected to keep pace
with the anticipated growth in the general purpose market, although quarterly
fluctuations are possible. The Company's products for the niche markets include
the I-Pak(R), a pharmaceutical label inspection product; DMR (Data Matrix
Reader/TM/), a reader of matrix-coded information; ICIS/TM/ (Integrated Circuit
Inspection System), primarily a semiconductor package inspection product; BP-
100/TM/ (Blister Pak Inspection System), and CLS-500/TM/.
Customer service revenue including spare parts, training and maintenance
agreements increased 8% in the first quarter of 1995 as compared to the first
quarter of 1994 while it accounted for 10% of total Company revenues in the 1995
period as compared to 9% in the 1994 period. While the newer generation machine
vision product lines require much less repair, maintenance and general customer
support than the previous models, revenues from other types of services,
including maintenance contracts, training and field support, are expected to
offset the decline in the demand for the spare parts of the older product lines.
Engineering Service revenue increased 77% and accounted for 10% of total
revenues in the 1995 quarterly period as compared to 5% of total revenues in the
1994 quarterly period. The increase in revenues was primarily a result of
increased billings of vision related Engineering Service contracts under the
U.S. Government sponsored SBIR program. This included billings on both ongoing
and newly obtained contracts. These increases were partially offset by
declining revenues from sales of robotic hardware and from robotic software
development contracts. The Company plans to continue work on its several SBIR
contracts and to bid on new SBIR contracts in the future.
Historically, Acuity has had one or two customers which have accounted for
a significant percentage of its total revenues for a given year. In 1994 Brown
& Williamson was Acuity's largest customer, accounting for 16% of total
revenues. These revenues were a result of a $3.6 million contract completed in
December 1994. In 1993 Acuity's largest customer, Motorola, accounted for 12%
of the Company's total revenues. As of the end of the first quarter of 1995 and
also as of the date of this report, the Company did not have any order or
contract in its backlog that would compare with the size of the Brown &
Williamson contract which was booked in March 1994 and which accounted for a
significant part of the Company's total 1994 revenues. There can be no
assurance that the Company will be able to secure and complete a similar
contract in the future. Acuity recognizes the potential effects of reliance
upon a few significant customers and therefore continues to attempt to expand
its market share through a diversified customer base.
International revenues increased approximately 70% in the first quarter of
1995 from the comparable quarter in 1994. The increase was a result of a 78%
increase in European revenues combined with 50% increase in Asian revenues. The
increase in international revenues was a result of what Acuity believes were
slightly improved economic conditions in Europe and Asia with regard to Acuity's
products while the Company believes that the 22% decrease in North American
revenues was primarily a result of the Company's lack of securing any one or two
North American customers which traditionally account for a significant
percentage of the Company's revenues.
9
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The following table summarizes total revenues by geographic region:
<TABLE>
<CAPTION>
Thirteen Weeks Ended
-----------------------------
April 1, April 2,
1995 1994
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$ % $ %
- - - -
<S> <C> <C> <C> <C>
North America................ 3,347 68 4,279 83
Europe....................... 1,151 24 646 12
Asia......................... 397 8 264 5
------ --- ------ ---
Total................... $4,895 100% $5,189 100%
====== === ====== ===
</TABLE>
Total costs and expenses, as a percentage of revenue, increased to
approximately 103% of revenue in the first quarter of 1995 from approximately
90% of revenue in the first quarter of 1994. As a percentage of revenue, the
increase in total costs and expenses consisted of an approximate 3 percentage
point increase in the cost of goods sold and an approximate 10 percentage point
increase in the other costs and expenses. In the first quarter of 1995 other
costs and expenses included costs associated with the Company's reduction in
force which occurred at the end of the first quarter. The December 31, 1994
headcount was 117 full-time employees. After the personnel reduction headcount
totaled 113 at the end of the first quarter of 1995 as compared to 112 at the
end of the first quarter of 1994.
Cost of goods sold, as a percentage of revenue, increased approximately 3
percentage points to approximately 43% in the first quarter of 1995 from
approximately 40% in the first quarter of 1994. The increase was primarily
attributable to a product mix change to lower gross margin products in the 1995
period. In addition, increased sales through distribution, as a percentage of
total revenues, and somewhat higher manufacturing labor costs in 1995 also
contributed to the increased cost of goods sold. Future gross margins will be
impacted by the product mix of future revenues and the level of revenues
generated through the Company's distribution network which the Company is
attempting to increase. Acuity continues to monitor and react to market events
and developments in an attempt to improve its gross margin levels.
Research and development expenses increased 16% in the thirteen weeks ended
April 1, 1995 as compared to the similar period of 1994. The expense increase
reflects a higher average R&D headcount in 1995 which increased salary, travel,
and employee development expenses. Acuity expects to expend additional
resources in the future to improve and expand its product lines and to respond
to its customers' needs.
Marketing and selling expenses increased approximately 18% in the first
quarter of 1995 as compared to the comparable quarter in 1994. The increase was
partially attributable to increased trade show, advertising, salary and travel
expenses. Other expenses also increased as a result of the higher average
headcount in the 1995 period. The decrease in revenues in the 1995 quarter as
compared to the 1994 quarter produced a corresponding decrease in commission
expense which partially offset the other expense increases. As Acuity attempts
to expand its marketing and sales programs, in an effort to increase its market
share and subsequently its revenues, additional expenditures in marketing and
sales are planned.
General and administrative expenses decreased 10% in the 1995 quarter as
compared to the 1994 quarter. The decrease was primarily attributable to a
lower average headcount which decreased salary and other employee related
expenses. Additional resources will be invested in the general and
administrative areas as required by the future growth of Acuity.
Net interest expense decreased 73% in the first quarter of 1995 as compared
to the first quarter of 1994. This was primarily a result of the retirement of
the Company's 10% subordinated notes (See Note 8 to the Condensed Consolidated
Financial Statements). Given current market interest rates and the Company's
intention to reduce its outstanding borrowings under its bank line of credit
whenever
10
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possible, Acuity believes that its net interest expense in 1995 should decline
from its 1994 level.
A provision for income taxes was not made in the 1995 period since the
Company had an operating loss. The first quarter of 1994 tax rate of
approximately 10% reflects federal and state taxes, and the use of tax loss and
tax credit carryovers. The 10% rate is the approximate rate estimated for the
Company during 1995. The Company has significant tax loss and tax credit
carryovers both in the United States and the United Kingdom, but these have
certain limitations on their use.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
For the thirteen weeks ended April 1, 1995, cash and cash equivalents
decreased 47% from the 1994 year end amount. At the end of the quarter working
capital totaled $1,296,000 as compared to $2,470,000 at year end 1994. The
significant decline was primarily a result of the Company's line of credit
becoming a short term liability as of April 1, 1995.
In March 1995 the Company secured, from a commercial bank, a long term $3.5
million line of credit carrying more favorable terms than its previous line from
another commercial bank (See Notes 8 and 9 to Condensed Consolidated Financial
Statements). The Company borrowed against this new line and immediately paid
off and terminated its previous line of credit which was scheduled to expire in
May 1995. Since the new line of credit was for a long term commitment
(expiration of June 1, 1997) the Company's December 31, 1994 loan payable on its
bank line of credit was classified as a long term liability in the Company's
audited December 31, 1994 Balance Sheet. However, since the Company was in
default of certain covenants under this line of credit as of April 1, 1995, the
then borrowings of $1,250,000 are classified as a short term liability in the
Company's unaudited April 1, 1995 Balance Sheet. The Company has obtained
forbearance from such defaults from its bank until the earlier of (i) August 15,
1995 or (ii) any termination of the Company's arrangement for its contemplated
merger with RVSI without such merger having been consummated. In the event that
either of the two events occurs, the Company would need to enter into
negotiations with its bank in an attempt to resolve the termination of such
forbearance. As of the date of this Form 10-QSB borrowings of $1,500,000 were
outstanding and the Company had approximately another $343,000 in available
borrowings against its line of credit.
During the first quarter of 1995 the Company received $81,000 from the
exercise of stock options and borrowed an additional $235,000 on its line of
credit. During the first quarter of 1995 the Company invested $246,000 in the
purchase of property and equipment. These costs were primarily for assets
required for product development and enhancement. As of April 1, 1995 the
Company had capitalized $106,000 of merger related costs associated with the
proposed RVSI merger and such costs are classified in the Company's April 1,
1995 Balance Sheet as other assets. Such costs, combined with future merger
related costs, are expected be expensed in the quarter in which the merger is
consummated.
Acuity's revised internal operating plan for the next year shows that cash
resources, including those available from its line of credit, will be available
to fund operations if the plan is substantially achieved. Satisfactory
performance against its 1994 and 1993 plans was achieved. However, the Company
did not achieve its plan for the first quarter of 1995 and subsequently revised
downward its original projections for the balance of 1995. If the revenue and
expense plan is not met during the year a strain will be placed on the Company's
cash resources and corrective action would need to be taken. In the past the
Company has reduced expense levels primarily through staff reductions.
Acuity plans to purchase capital assets during the next year at a level
consistent with its 1994 level. The planned purchases of capital equipment will
be related to new product development and product introductions, personnel and a
corporate MIS package. These costs are not expected to have a material effect
on the Company's operations. The Company presently has no material commitments
for capital expenditures. Inventory levels should remain somewhat consistent
with levels maintained during the past two years, other than possible
fluctuations caused by the timing of large orders.
11
<PAGE>
Whenever possible, the Company plans to reduce its outstanding borrowings
on its bank line of credit. In the past Acuity invested its cash reserves
mainly in short-term, high grade bank time deposits and expects to continue
similar conservative policies in the future when cash resources allow. Interest
earned provides an additional source of working capital funds.
The Company has incurred significant operating losses during its history
and has an accumulated deficit of approximately $59,000,000. The Company
believes it has addressed the primary issues which led to its significant
operating losses in past years by changing its product lines, restructuring, and
most recently, merging. While the Company had completed four profitable
quarters during 1994 since the Merger, each with increasing revenues, the first
quarter of 1995 showed a decline in revenues and a net loss. The Company
reduced its headcount at the end of March 1995 in an attempt to bring its
expense level in line with its projected revenue levels. There can be no
assurance that these measures, or any further measures the Company may employ,
will cause the Company to experience revenue growth or have profitable
operations in the future. The Company's future liquidity and profitability are
dependent upon the Company's ability to effectively market and manufacture its
products, to develop new products to meet changing customer demands and to
expand its market share through a more diversified customer base.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11 Computation of Per Share Earnings
27 Financial Data Schedule (EDGAR)
(b) Reports on Form 8-K
There was one report on Form 8-K filed during the thirteen weeks ended
April 1, 1995.
The Form 8-K Report dated January 31, 1995 concerning Item 5. "Other
Events" was filed with the S.E.C. and is incorporated herein by
reference.
There were three reports on Form 8-K filed subsequent to the thirteen
weeks ended April 1, 1995 and prior to the filing of this Form 10-QSB.
The Form 8-K Report dated April 17, 1995 concerning Item 5. "Other
Events" was filed with the S.E.C. and is incorporated herein by
reference.
The Form 8-K Report dated April 24, 1995 concerning Item 5. "Other
Events" was filed with the S.E.C. and is incorporated herein by
reference.
The Form 8-K Report dated April 27, 1995 concerning Item 5. "Other
Events" was filed with the S.E.C. and is incorporated herein by
reference.
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ACUITY IMAGING, INC.
Date: May 11, 1995 /s/ Ofer Gneezy
----------------
Ofer Gneezy
President
Date: May 11, 1995 /s/ John A. Rogers
-------------------
John A. Rogers
Vice President and
Chief Financial Officer
13
<PAGE>
EXHIBIT INDEX PAGE NO.
------------- --------
11 Computation of Per Share Earnings 15
27 Financial Data Schedule (EDGAR) 16
14
<PAGE>
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
(In thousands except per share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
--------------------
April 1, April 2,
1995 1994
------ ------
<S> <C> <C>
Weighted Average Number of Shares outstanding:
Common Stock 2,417 2,365
Common equivalent shares
resulting from stock options and warrants
(treasury stock method) - 214
----- -----
Total 2,417 2,579
===== =====
Net Income (loss) applicable to common stock $(141) $ 410
===== =====
Net Income (loss) per common share $(0.6) $ .16
===== =====
</TABLE>
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> APR-01-1995
<CASH> 279
<SECURITIES> 0
<RECEIVABLES> 3,228
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0
0
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</TABLE>
