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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1997
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: 0-3338
NMC CORP.
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(Exact name of registrant as specified in its charter)
DELAWARE 22-1558317
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
477 MADISON AVENUE, SUITE 701
NEW YORK, NEW YORK 10022
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(Address of principal executive offices)
(Zip Code)
212-207-4560
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed
since last report)
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.
At June 1, 1997 there were 1,136,677 shares of Common Stock, $.06 2/3 par
value, outstanding.
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<PAGE>
NMC CORP.
INDEX
Page No.
--------
Part I -- Financial Information .................................... 1
Item 1. Financial Statements
Consolidated Balance Sheets as of
April 30, 1997 (unaudited) and
July 31, 1996 ........................................ 2 - 3
Consolidated Statements of Operations
for the Nine and Three Months Ended
April 30, 1997 and 1996 (unaudited) .................. 4
Consolidated Statements of Cash Flows
for the Nine Months Ended April 30,
1997 and 1996 (unaudited) ............................ 5 - 6
Notes to Consolidated Financial
Statements (unaudited) ............................... 7 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations ........................................... 11 - 13
Part II -- Other Information
Item 6. Exhibits and Reports on Form 8-K ........................ 14
Signatures ......................................................... 15
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted from the following
consolidated financial statements pursuant to the rules and regulations of the
Securities and Exchange Commission. It is suggested that the following
consolidated financial statements be read in conjunction with the year-end
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended July 31, 1996.
The results of operations for the three and nine month period ended April
30, 1997, are not necessarily indicative of the results to be expected for the
entire fiscal year or for any other period.
-1-
<PAGE>
NMC CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
April 30, July 31,
1997 1996
-------- ----------
(Unaudited)
Current Assets:
Cash ........................................... $140,129 $ 15,592
Accounts receivable -- less allowance
for doubtful accounts of $9,000 in 1996 ...... -- 587,696
Inventories .................................... -- 13,468
Prepaid expenses and sundry receivables ........ 200,000 132,823
-------- ----------
Total Current Assets ...................... 340,129 749,579
-------- ----------
Property, plant and equipment -- net ............. 9,459 1,437,612
Unamortized excess of cost over fair
value of assets acquired ....................... -- 979,595
Deferred costs ................................... 113,458 18,868
-------- ----------
TOTAL ASSETS ............................ $463,046 $3,185,654
======== ==========
(Continued)
See notes to consolidated financial statements.
-2-
<PAGE>
NMC CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
April 30, July 31,
1997 1996
----------- -----------
(Unaudited)
Current Liabilities:
Short-term borrowings .......................... $ -- $ 1,251,373
Current portion of long-term debt .............. -- 27,343
Current portion of capital lease
obligations .................................. -- 380,897
Accounts payable ............................... -- 333,153
Accrued expenses ............................... 73,053 274,811
Customer deposits .............................. -- 105,873
Deferred revenue ............................... -- 138,312
Due to officer ................................. -- 200,000
Income taxes payable ........................... 7,970 7,970
----------- -----------
Total Current Liabilities ............... 81,023 2,719,732
----------- -----------
Long-term debt ................................... -- 68,944
Deferred revenues ................................ -- 7,392
----------- -----------
Total Liabilities ....................... 81,023 2,796,068
----------- -----------
Minority interest in consolidated
subsidiary ...................................... -- 543,461
Stockholders' Equity (Deficiency):
Preferred stock, par value $1; authorized
500,000 shares (involuntary liquidation
value $777,912):
Convertible Series B, at redemption
value; issued and outstanding 65,141
shares ................................... 130,282 130,282
Cumulative Series C, par value $1,
issued and outstanding 64,763 shares .... 64,763 64,763
Common stock, par value $.06-2/3; authorized
20,000,000 shares; issued and outstanding
1,136,677 and 986,677 shares ................. 75,816 65,811
Additional paid-in capital ..................... 7,845,605 7,368,110
Accumulated deficit ............................ (7,734,443) (7,792,894)
Foreign currency translation adjustment ........ -- 10,053
----------- -----------
Total Stockholders' Equity
(Deficiency) .......................... 382,023 (153,875)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) ................... $ 463,046 $ 3,185,654
=========== ===========
See notes to consolidated financial statements.
-3-
<PAGE>
<TABLE>
NMC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Nine Months Ended Three Months Ended
April 30, April 30,
-------------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Sales .................................... $1,203,229 $ 882,839 $ 150,743 $ 369,494
---------- ---------- ---------- ----------
Costs and Expenses:
Cost of sales ............................ 228,236 165,488 29,327 60,451
Selling, general and administrative
expenses ............................... 1,377,541 891,830 279,122 343,247
Interest expense ......................... 96,506 102,614 10,588 32,300
Other (income) expense.................... (1,161) (9,337) (1,161) 680
(Gain) on sale of investment ............. (378,130) -- (378,130) --
---------- ---------- ---------- ----------
Total Costs and Expenses .............. 1,322,992 1,150,595 (60,254) 436,678
---------- ---------- ---------- ----------
Income (loss) before
income tax provision ..................... (119,763) (267,756) 210,997 (67,184)
Minority interest in
net income (loss) of consolidated
subsidiary ............................... (21,348) 1,432 (7,485) 1,432
---------- ---------- ---------- ----------
Income (loss) before income tax provision .. (98,415) (269,188) 203,512 (68,616)
Income tax provision ....................... -- -- -- --
---------- ---------- ---------- ----------
Net income (loss) .......................... $ (98,415) $ (269,188) $ 203,512 $ (68,616)
========== ========== ========== ==========
Earnings (loss) per common share ........... $ (.09) $ (.28) $ .18 $ (.07)
========== ========== ========== ==========
Weighted average number of common shares
outstanding .............................. 1,086,494 964,414 1,136,677 986,677
========== ========== ========== ==========
See notes to consolidated financial statements.
</TABLE>
-4-
<PAGE>
NMC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
April 30,
---------------------------
1997 1996
----------- -----------
Cash flows from operating activities:
Net (loss) ................................... $ (98,415) $ (269,188)
Adjustments to reconcile net (loss) to
net cash from operating activities:
Depreciation and amortization ............ 236,246 163,594
(Gain) on sale of investment ............. (378,130) --
(Gain) loss on sale of equipment ......... 9,459 (9,337)
Minority interest in income (loss) of
consolidated subsidiary ................ (21,348) 1,432
Non-cash executive compensation .......... 112,500 --
Changes in operating assets and
liabilities net of effect from
purchase of Water Express ............... (69,932) (257,716)
----------- -----------
Net Cash (Used in) Operating
Activities .......................... (209,620) (371,215)
----------- -----------
Cash flows from investing activities:
Purchase of property, plant and
equipment .................................. (144,014) (156,270)
Proceeds from sale of investment ............. 1,458,237 --
----------- -----------
Net Cash Provided by (Used in)
Investing Activities ................ 1,314,223 (156,270)
----------- -----------
Cash flows from financing activities:
Proceeds from borrowings ..................... 504,443 770,026
Repayments of borrowings ..................... (1,510,594) (277,833)
Proceeds from sale of equipment .............. 36,138 16,382
Proceeds from minority shareholder ........... -- 75,000
----------- -----------
Net Cash Provided by (Used in)
Financing Activities ................ (970,013) 583,575
----------- -----------
Foreign currency translation
adjustment ................................... (10,053) (29,704)
----------- -----------
Net increase in cash and cash equivalents ...... 124,537 26,386
Cash and Cash Equivalents -- beginning
of period .................................... 15,592 14,043
----------- -----------
Cash and Cash Equivalents -- end of
period ....................................... $ 140,129 $ 40,429
=========== ===========
(Continued)
See notes to consolidated financial statements.
-5-
<PAGE>
NMC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
Nine Months Ended
April 30,
-------------------------
1997 1996
---------- ----------
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable ... $ 74,440 $ (24,372)
(Increase) in inventories .................... (58,364) (10,639)
(Increase) in prepaid expenses and sundry
receivables ................................ (140,421) (32,441)
(Increase) in deferred acquisition costs ..... (94,590) (207,241)
Increase (decrease) in accounts payable ...... 64,807 (12,641)
Increase in accrued expenses ................. 94,588 44,275
(Decrease) in income taxes payable ........... -- (810)
(Decrease) in deferred revenue ............... (24,662) (10,530)
Increase (decrease) in customer deposits ..... 14,270 (3,317)
---------- ----------
$ (69,932) $ (257,716)
========== ==========
Supplementary information of non-cash
investing and financing activities:
During 1995, Krystal Fountain Water
Company Limited purchased Water
Express. In connection with this
acquisition:
Fair value of assets acquired ........... $1,260,110
Liabilities assumed ..................... $ 360,399
Supplemental Information:
Cash paid during the year for:
Interest ................................... $ 119,432 $ 33,777
========== ==========
Income taxes ............................... $ -- $ 810
========== ==========
Supplementary information of non-cash
investing and financing activities:
Conversion of convertible debt to
common stock ............................. $ 100,000 $ --
========== ==========
Conversion of accrued compensation to
options to purchase common stock .......... $ 112,500 $ --
========== ==========
See notes to consolidated financial statements.
-6-
<PAGE>
NMC CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated balance sheet as of April 30, 1997, the consolidated
statement of operations for the nine months ended April 30, 1997 and 1996, and
the consolidated statement of cash flows for the periods then ended have been
prepared by NMC Corp. and Subsidiary ("The Company" or "NMC") and are unaudited.
In the opinion of management, all adjustments (consisting solely of normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows for all periods presented have been made.
Certain items in the April 30, 1996 financial statements have been reclassified
to conform to April 30, 1997 classifications. The information for July 31, 1996
was derived from audited financial statements.
2. RECENTLY ISSUED ACCOUNTING STANDARDS
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share", which
establishes new standards for computing and presenting net income per share and
replaces the standards previously found in Accounting Principles Board Opinion
No. 15, "Earnings Per Share". The Company will begin reporting net income (loss)
per share according to this new standard in its January 31, 1998 quarterly
report on Form 10-Q. The Company does not expect the implementation of SFAS No.
128 regarding the restatement of prior periods net loss per share to have a
material effect on the Company's computation of earnings (loss) per share.
3. RECENT DEVELOPMENTS
a) On February 21, 1997, the Company completed the sale of its only
operating business, Krystal Fountain Water Company Limited ("Krystal") to
Matthew Mitchison, NMC's fifty (50%) percent equity partner in Krystal. The
selling price was approximately $1,600,000 resulting in a gain on the sale of
approximately $378,000.
b) On May 19, 1997 the Company entered into a letter of intent with Canal
Jean Co., Inc. ("Canal"), a retail clothing department store located in New York
City's Soho district. Pursuant to the letter of intent, the Company will acquire
all of the outstanding shares of Canal for 5,000,000 shares of the Company's
common stock. Canal will operate as a wholly-owned subsidiary of the Company
after the acquisition.
c) The Company has entered into an agreement with Brokerage Services
Management, Inc. ("BSM") whereby the Company will issue to BSM 1,000,000 shares
of NMC common stock in exchange for BSM assigning to the Company BSM's right,
title and interest in the following contracts:
(1) An agreement with Microplastics, Inc. ("Microplastics") to acquire its
wholly-owned subsidiary Universal Vinyl Corporation ("Universal") of
Medley, Florida. Universal is a manufacturer of plastic vertical venetian
blind blades which are sold to venetian blind manufacturers. NMC will
acquire Universal for $1,500,000 through a combination of cash and stock.
-7-
<PAGE>
NMC CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
3. RECENT DEVELOPMENTS (Continued)
(2) An agreement with Microplastics to acquire Microplastic's North and
South American rights to the design and methodology of enhancing and
converting injection mold machines to accept recycled plastics and
procedure plastic pallets and other plastic containers and products.
(3) An agreement with Microplastics to acquire another of its wholly-owned
subsidiaries, Plastech Pallet Corporation ("PPC") of Medley, Florida. PPC
is a newly formed corporation which will be in the business of recycling
waste plastic and utilizing the recycled plastic to manufacture plastic
pallets. The plastic pallets will be manufactured by a proprietary process
utilizing a 1,000 ton injection molding machine.
(4) An agreement to purchase a fifty (50%) percent interest in a golf
course community development project in Thomaston, Georgia.
The issuance of shares to BSM is subject to the Company completing its due
diligence and the consummation of the contemplated transactions.
(d) On March 14, 1997 the Company amended its original agreement in
principle, to acquire Select Acquisitions, Inc. ("Select"). The Board of
Directors of Select voted to reject the acquisition and the Board of Directors
of NMC voted not to proceed with any alternative offers.
4. PROPERTY, PLANT AND EQUIPMENT
April 30, July 31,
1997 1996
---------- ----------
Machinery and equipment ...................... $ 22,710 $1,652,225
Leasehold improvements ....................... 6,197 6,197
Master tapes ................................. 20,001 20,001
---------- ----------
48,908 1,678,423
Less accumulated depreciation and
amortization ............................... 39,449 240,811
---------- ----------
Net Property, Plant and Equipment ............ $ 9,459 $1,437,612
========== ==========
5. DEBT
Short-term debt consists of the following:
April 30, July 31,
1997 1996
----------- ----------
Secured note, due March 20, 1997
interest at 7.5% per year (1) ..................... $ -- $ 100,000
Secured note, due the earlier of March 31, 1997
or within three (3) days after the closing of
a secondary offering of the Company's
securities, interest at 18% per year (2) .......... -- 649,692
-8-
<PAGE>
NMC CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
5. DEBT (Continued)
April 30, July 31,
1997 1996
----------- ----------
Secured note, due the earlier of July 31, 1997
or within ten (10) days after the closing of
a secondary offering of the Company's
securities, interest at 10% per year (3) ......... -- 200,000
Secured note, due on demand, interest
at 5% per year (4) ............................... -- 71,593
Unsecured note, due on demand,
interest at 5% per year (5) ...................... -- 103,541
Unsecured note, due on demand, interest
at 5% per year (6) ............................... -- 120,416
Unsecured note, due on demand,
interest at 5% per year (7) ...................... -- 6,131
---------- ----------
$ -- $1,251,373
========== ==========
Long-term debt is as follows:
Secured notes payable, due July, 1997
through April, 2000, interest at 9%
per year ......................................... $ -- $ 96,287
Less current maturities ........................... -- 27,343
---------- ----------
$ -- $ 68,944
========== ==========
- ----------
(1) The note payable due Republic Bank was collateralized by a certificate of
deposit of an affiliate of Mrs. Barbara Greenfield ("Mrs. Greenfield"),
wife of Mr. Marvin E. Greenfield ("Mr. Greenfield"), the Company's
President and Chief Executive Officer. The note was repaid on February 28,
1997 from the proceeds from the sale of Krystal.
(2) On December 8, 1995, NMC and Krystal entered into separate loan agree-
ments with Ballydine Investments Limited ("Ballydine") for a combined
line-of-credit ("line-of-credit") of up to $750,000. The line-of-credit
was guaranteed by NMC and was secured by the fifty (50%) percent of Krystal
owned by the Company. Any amount that Krystal borrowed was secured by an
English debenture ("Security Agreement") from Krystal which encumbered all
of Krystal's assets in favor of Ballydine. The lien on this collateral was
superior to prior liens given to other lenders, including the affiliated
entities.
-9-
<PAGE>
NMC CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
5. DEBT (Continued)
On September 30, 1996, Krystal paid Ballydine $286,000 which liquidated the
liability to Ballydine from Krystal. The lien on the assets of Krystal by
Ballydine was released. The monies were advanced from the shareholders of
Krystal to repay the loan. The advances from the shareholders were due on
demand if there is sufficient cash flow to pay the shareholders.
As additional consideration for the line-of-credit, the Company issued 9.9%
of the outstanding, fully diluted shares of the Company, or 203,990 shares,
at $.001 per share, with registration rights.
The amount due Ballydine from NMC in the amount of $510,791 was repaid on
February 28, 1997 from the proceeds from the sale of Krystal.
(3) The secured note to an unaffiliated third party was collateralized by
all of the common stock of Krystal owned by the Company subordinated to the
line-of-credit. The note was repaid on February 28, 1997 from the proceeds
from the sale of Krystal.
(4) The secured note payable to Mrs. Greenfield was also collateralized by
all of the common stock of Krystal owned by the Company. The security
interest was subordinate to the line-of-credit and the third party lender.
The note was repaid on March 20, 1997 from the proceeds from the sale of
Krystal.
(5) The unsecured note was payable to Mrs. Greenfield representing advances
made by Mrs. Greenfield to Krystal. The note was repaid on February 28,
1997 from the proceeds from the sale of Krystal.
(6) The unsecured note is payable to Matthew Mitchison, the fifty (50%)
percent owner of Krystal in connection with the acquisition of Water
Express by Krystal. This liability was assumed by Krystal as part of the
agreement by Mr. Mitchison to purchase NMC's fifty (50%) percent interest
in Krystal.
(7) The unsecured note was payable to Brokerage Services Management, Inc.
("BSM") representing advances for professional fees and interest charges
made on behalf of NMC. The note was repaid on February 28, 1997 from the
proceeds from the sale of Krystal.
-10-
<PAGE>
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On February 21, 1997, the Company consummated the sale of its only
operating subsidiary, Krystal Fountain Water Company Limited. The selling price
was approximately $1,600,000 resulting in a gain of approximately $378,000.
Subsequent to the sale the Company liquidated substantially all of its
liabilities. The net cash proceeds from the sale after the liquidation of the
Company's liabilities should be sufficient to support the Company's operations
for the next twelve (12) months. As of this date, the Company has no operations
to generate any cash flows. The Company will continue to pursue other investment
opportunities.
On May 19, 1997, the Company entered into a letter of intent with Canal
Jean Co., Inc. ("Canal"), a retail clothing department store located in New York
City's Soho district. Canal will operate as a wholly-owned subsidiary of the
Company after the acquisition.
The Company has entered into an agreement with Brokerage Services
Management Inc. ("BSM") whereby BSM has assigned its right, title and interest
in four contracts to purchase various entities and their respective rights. The
Company will issue BSM 1,000,000 shares of NMC common stock as consideration for
the assignment subject to the completion of the Company's due diligence and the
consummation of the contemplated transactions.
In connection with the agreement with Microplastics, Inc.
("Microplastics"), the Company advanced BSM $150,000 as initial funding to
purchase equipment for the Liquid Nitrogen Injection Molding Process. The
Company is obligated to pay by June 30, 1997 the balance of up to a maximum of
$3,500,000 when the molds are ready and the machine has been subject to test
runs. Should the Company not be able to finance the equipment, the Company would
lose its rights to acquire Microplastic's rights. At that time BSM will be
obligated to repay the $150,000 advance.
The Company has also agreed to obtain approximately $3,000,000 in funding
to finance the golf course community project in Thomaston, Georgia. The Company
has entered negotiations for the financing, but as of this date no financing has
been consummated and there is no assurance that it ever will be.
Finally, the Company has agreed to purchase Universal Vinyl Corporation, a
plastics recycling and manufacturing company in Florida, that manufactures
PVC-Vinyl Blinds from recycled plastic, for $1,500,000, of which $1,000,000
shall be in cash payable from the proceeds of a contemplated securities offering
by NMC and $500,000 shall be in the form of NMC common stock equivalent to that
sum based on the then average price of NMC shares based on the bid and ask
average at the date of the closing of the contemplated transactions.
As of this date no financing has been consummated and there is no assurance
that it ever will be.
On April 4, 1997, the Company issued to Marvin E. Greenfield, the Company's
President and Chief Executive Officer, seventy-five thousand (75,000) options
without expiry to purchase seventy-five thousand (75,000) shares of the
Company's common stock at a purchase of $.0001 per share in lieu of accrued
compensation and compensation to be accrued for the period August 1, 1996
through July 31, 1997 as required under the terms and conditions of his
employment agreement in the amount of $150,000. As of this date the options have
not been exercised.
-11-
<PAGE>
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS
NINE MONTHS ENDED APRIL 30, 1997 VS.
NINE MONTHS ENDED APRIL 30, 1996
On February 21, 1997, the Company sold its only operating business,
Krystal. On November 1, 1995, Krystal had acquired substantially all the net
assets of Water Express. The operating results of Krystal and Water Express have
been included in the consolidated statement of operations from the date of
acquisition through February 21, 1997.
Revenues from sales increased 36.3% to $1,203,229 during the nine months
ended April 30, 1997 from $882,839 for the nine months ended April 30, 1996. The
increase is primarily due to the inclusion of Water Express in the statement of
operations, an increase in the number of customers and more demand for the
Company's product, through February 21, 1997.
Cost of sales increased 37.9% to $228,236 during the nine months ended
April 30, 1997 from $165,488 for the nine months ended April 30, 1996 due to the
reasons explained above.
Selling, general and administrative expenses increased 54.5% to $1,377,541
for the nine months ended April 30, 1997 from $891,830 for the nine months ended
April 30, 1996. The increase is primarily due to the inclusion of Water Express
in the statement of operations, an expansion of the Company's marketing program,
and increases in depreciation of equipment and amortization of goodwill in
connection with the Water Express acquisition, through February 21, 1997.
Interest expense decreased to $96,506 for the nine months ended April 30,
1997 from $102,614 for the nine months ended April 30, 1996. The decrease is
attributable to the decrease in debt by the Company in the nine months ended
April 30, 1997, as a result of funds becoming available from the sale of
Krystal.
The net loss decreased 63.4% to $98,415 for the nine months ended April 30,
1997 from $269,188 for the nine months ended April 30, 1996. The Company
attributes the decrease primarily to the gain from the sale of Krystal.
THREE MONTHS ENDED APRIL 30, 1997 VS.
THREE MONTHS ENDED APRIL 30, 1996
Revenue from sales decreased 59.2% to $150,743 during the three months
ended April 30, 1997 from $369,494 for the three months ended April 30, 1996.
The decrease is due to the sale of Krystal on February 21, 1997.
Cost of sales decreased 51.5% to $29,327 during the three months ended
April 30, 1997 from $60,451 for the three months ended April 30, 1996 due to the
reasons explained above.
Selling, general and administrative expenses decreased 18.7% to $279,122
for the three months ended April 30, 1997 from $343,247 for the three months
ended April 30, 1996. The decrease is due to the sale of Krystal.
Interest expense decreased to $10,588 for the three months ended April 30,
1997 from $32,300 for the three months ended April 30, 1996. The decrease is
attributable to the repayment of debt made by the Company as a result of funds
becoming available due to the sale of Krystal.
-12-
<PAGE>
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
THREE MONTHS ENDED APRIL 30, 1997 VS.
THREE MONTHS ENDED APRIL 30, 1996 (Continued)
The net income increased 396.6% to $203,512 for the three months ended
April 30, 1997 from a net loss of $68,616 for the three months ended April 30,
1996. The Company attributes the increase to gain on the sale of Krystal.
-13-
<PAGE>
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: Exhibit 27.1 Financial Data Schedule.
(b) On May 17, 1997 the registrant filed a Current Report on Form 8-K
describing the sale of the Company's fifty (50%) percent owned
subsidiary, Krystal Fountain Water Company Limited ("Krystal") to
Matthew Mitchison, the owner of the balance of the equity
interest in Krystal. The Registrant received $1,623,000 from Mr.
Mitchison after deduction of professional fees associated with
the transaction. Krystal, which contributed to Registrant's only
operating business, rents water dispensers and sells bottled
mineral water, cups and ancillary items to businesses in the
Greater London area.
-14-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
NMC CORP.
----------------------------------------
(Registrant)
Date: June 18, 1997 By: /s/ MARVIN E. GREENFIELD
----------------------------------------
Marvin E. Greenfield, President and
Treasurer Duly Authorized Officer of the
Registrant (Principal Financial Officer)
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NMC CORP.
AND SUBSIDIARY FINANCIAL STATEMENTS AT APRIL 30, 1997 AND THE NINE MONTHS THEN
ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> APR-30-1997
<CASH> 140,129
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 340,129
<PP&E> 48,908
<DEPRECIATION> 39,449
<TOTAL-ASSETS> 463,046
<CURRENT-LIABILITIES> 81,023
<BONDS> 0
0
195,045
<COMMON> 75,816
<OTHER-SE> 111,162
<TOTAL-LIABILITY-AND-EQUITY> 463,046
<SALES> 1,203,229
<TOTAL-REVENUES> 1,203,229
<CGS> 228,236
<TOTAL-COSTS> 1,605,777
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 96,506
<INCOME-PRETAX> (98,415)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (98,415)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> 0
</TABLE>
