UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR QUARTERLY PERIOD ENDED SEPTEMBER 30, 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 0-11331
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PERFORMANCE INDUSTRIES, INC. AND SUBSIDIARIES
------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 34-1334199
- ------------------------------- ---------------------------------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
2701 E. CAMELBACK ROAD, SUITE 210
PHOENIX, ARIZONA 85016
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (602) 912-0100
--------------
Indicate by checkmark 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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15d of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES [X] NO [ ]
Number of shares outstanding of each of the issuer's classes of common stock as
of november 10, 1999, is 2,189,133 shares.
<PAGE>
PERFORMANCE INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
Part I Financial Information (Unaudited) Page
----
Consolidated Balance Sheets -
September 30, 1999 and December 31, 1998 3
Consolidated Statements of Operations (Unaudited) - 4
Nine Month Period Ended September 30, 1999 and 1998
Consolidated Statement of Operations (Unaudited)
Three Month Period Ended September 30, 1999 and 1998 5
Consolidated Statements of Cash Flows (Unaudited) - 6
Nine Month Period Ended September 30, 1999 and 1998
Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
Part II Other Information 8
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
2
<PAGE>
PERFORMANCE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
ASSETS 30-SEP-99 31-DEC-98
--------- ---------
Current assets:
Cash and equivalents, unrestricted $ 1,245 $ 1,486
Accounts and other receivables 392 333
less allowance for doubtful accounts
Notes Receivable 725 0
Current Portion of Receivables from sale of
businesses, net of allowance 0 125
Factored receivables, net of allowance for
doubtful accounts 0 150
Inventories 204 289
Prepaid expenses and other current assets 120 212
Deferred income taxes 24 24
Real estate held for sale 785 785
-------- --------
Total current assets 3,495 3,404
Deferred income taxes 1,278 1,278
Property and equipment, net 3,022 3,770
Other assets 862 945
-------- --------
TOTAL ASSETS $ 8,657 $ 9,397
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital
lease obligations 1,062 1,205
Accounts payable 572 579
Accrued employment costs 423 530
Accrued expenses and other current liabilities 578 764
Liabilities subject to compromise 797 797
Foreign Tax Liability 250 250
-------- --------
Total current liabilities 3,682 4,125
Long-term debt and capital lease obligations, less
current portion 16 58
Shareholders' equity:
Preferred Stock, par value $1.00 per share:
authorized 100,000 shares; none issued 0 0
Common stock, no par value; authorized 5,000,000
shares; issued 3,157,332 shares; outstanding
2,189,133 and 2,226,263, respectively 31,202 31,202
Accumulated deficit (22,460) (22,228)
-------- --------
8,742 8,974
Treasury stock at cost (3,783) (3,760)
-------- --------
Total shareholders' equity 4,959 5,214
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,657 $ 9,397
======== ========
3
<PAGE>
PERFORMANCE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30
------------------------------
1999 1998
----------- -----------
Revenues $ 14,528 $ 13,664
Cost of revenues (13,785) (12,801)
Selling, general and administrative expenses (942) (1,291)
Interest expense (3) (22)
Other income (expenses), net (30) 37
Income (loss) from continuing operations before
income taxes (232) (413)
Provision for income taxes (1) 0
----------- -----------
Income (loss) from continuing operations (233) (413)
Income (loss) from discontinued operations 0 135
----------- -----------
Net income (loss) $ (233) $ (278)
=========== ===========
Net income (loss) per common share
Continuing operations $ (0.11) $ (0.18)
Discontinued operations $ 0.00 $ 0.06
----------- -----------
Net income (loss) per common share $ (0.11) $ (0.12)
=========== ===========
Average number of shares outstanding 2,201,405 2,339,416
=========== ===========
4
<PAGE>
PERFORMANCE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30
30-SEP-99 30-SEP-98
--------- ---------
Revenues $ 4,210 $ 4,209
Cost of revenues $ (4,243) (4,188)
Selling, general and administrative expenses $ (294) (474)
Interest expense $ 0 (5)
Other income (expenses), net $ 61 3
Income (loss) from continuing operations before
income taxes (266) (455)
Provision for income taxes 0 0
----------- -----------
Income (loss) from continuing operations (266) (455)
Income (loss) from discontinued operations $ 0 25
----------- -----------
Net income (loss) $ (266) $ (430)
=========== ===========
Net income (loss) per common share
Continuing operations $ (0.12) $ (0.20)
Discontinued operations $ 0.00 $ 0.01
----------- -----------
Net income (loss) per common share $ (0.12) $ (0.19)
=========== ===========
Average number of shares outstanding 2,191,733 2,273,388
=========== ===========
5
<PAGE>
PERFORMANCE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30
-------------------
1999 1998
------- -------
Net cash provided by (used in) operating activities $ 286 $ 448
Cash flows from investing activities:
Decrease (increase) in receivables from sales
of businesses, net 125 0
Purchase of property and equipment (387) (124)
Proceeds from sale of property and equipment 667 0
Issuance of Notes Receivable (725) (359)
------- -------
Net cash provided by (used in) investing
activities (320) (483)
Cash flows from financing activities:
Proceeds from borrowings 0 0
Repayment of borrowings (183) (171)
(Increase) decrease in treasury stock (22) (18)
------- -------
Net cash provided by (used in) financing
activities (205) (189)
Net increase (decrease) in cash and cash equivalents (241) (224)
Cash and cash equivalents at beginning of period 1,486 2,815
------- -------
Cash and cash equivalents at end of period $ 1,245 $ 2,591
======= =======
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
During 1997, the Company sold two of its operating companies, Funding and
Development. As a result, there has been a reclassification of income and
expenses related to these businesses as set forth in the Company's Report on
Form 10-Q for the period ending September 30, 1999. Management's Discussion and
Analysis shall be limited to continuing operations.
In the first quarter of 1999 the company sold its Las Vegas and La Mesa
locations and closed its LaJolla location. In the second quarter, the company
sold its San Bernardino location. The company currently owns and operates four
restaurants in California and two in Arizona.
Revenues for the company were flat for the third quarter and up for the nine
month period versus last year. The increase is attributable to the addition of
Steamers versus those restaurants closed.
The net loss for the three months ending September 30, 1999 was $266,000 versus
a loss of $430,000 for the same period last year. Most of the reduction was in
SG&A expenses. For the nine months ending September 30, 1999, the net loss was
$233,000 versus $278,000 for the same period last year. The loss for last years
period was reduced by a gain of $135,000 from discontinued operations.
LIQUIDITY AND CAPITAL RESOURCES
The company has sufficient cash reserves to meet operational needs for the
upcoming year. Management believes, but there can be no assurance, that it will
be able to finance any future expansion through cash flow, loans or leases of
equipment.
7
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
8
<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.
Performance Industries, Inc.
and Subsidiaries
Dated: November 10, 1999 /s/ Joe Hrudka
---------------------------------------
Joe Hrudka
Chairman of the Board
(Principal Executive Officer)
/s/ Ed Fochtman
---------------------------------------
Ed Fochtman
Chief Financial Officer
(Principal Accounting Officer)
9
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<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,245
<SECURITIES> 0
<RECEIVABLES> 1,117
<ALLOWANCES> 0
<INVENTORY> 204
<CURRENT-ASSETS> 3,495
<PP&E> 5,469
<DEPRECIATION> 2,447
<TOTAL-ASSETS> 8,657
<CURRENT-LIABILITIES> 3,682
<BONDS> 0
0
0
<COMMON> 31,202
<OTHER-SE> (26,243)
<TOTAL-LIABILITY-AND-EQUITY> 8,657
<SALES> 14,528
<TOTAL-REVENUES> 14,528
<CGS> 13,785
<TOTAL-COSTS> 14,727
<OTHER-EXPENSES> 30
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3
<INCOME-PRETAX> (232)
<INCOME-TAX> 1
<INCOME-CONTINUING> (233)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (233)
<EPS-BASIC> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
