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 MARCH 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 __________________
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 May 21, 1999, is 2,206,083 shares.
<PAGE>
PERFORMANCE INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
PART I FINANCIAL INFORMATION (Unaudited) Page
----
Consolidated Balance Sheets -
March 31, 1999 and December 31, 1998 3
Consolidated Statements of Operations (Unaudited) - 4
Three Month Period Ended March 31, 1999 and 1998
Consolidated Statements of Cash Flows (Unaudited)
Three Month Period Ended March 31, 1999 and 1998 5
Management's Discussion and Analysis of Financial 6
Condition and Results of Operations
PART II OTHER INFORMATION 7
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports On Form 8-K
Signatures 8
2
<PAGE>
PERFORMANCE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
ASSETS 31-MAR-99 31-DEC-98
--------- ---------
Current assets:
Cash and equivalents, unrestricted $ 2,394 $ 1,486
Accounts and other receivables 378 333
less allowance for doubtful accounts
Notes Receivable 325 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 218 289
Prepaid expenses and other current assets 163 212
Deferred income taxes 24 24
Real estate held for sale 785 785
-------- --------
Total current assets 4,287 3,404
Deferred income taxes 1,278 1,278
Property and equipment, net 3,334 3,770
Other assets 901 945
-------- --------
TOTAL ASSETS $ 9,800 $ 9,397
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt 1,136 1,205
Accounts payable 886 579
Accrued employment costs 473 530
Accrued expenses and other current liabilities 764 764
Liabilities subject to compromise 797 797
Foreign Tax Liability 250 250
-------- --------
Total current liabilities 4,306 4,125
Long-term debt, less current portion 41 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
2,211,083 and 2,211,183, respectively 31,202 31,202
Accumulated deficit (21,989) (22,228)
-------- --------
9,213 8,974
Treasury stock at cost (3,760) (3,760)
-------- --------
Total shareholders' equity 5,453 5,214
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 9,800 $ 9,397
======== ========
3
<PAGE>
PERFORMANCE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1999 AND 1998
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1999 1998
----------- -----------
Revenues $ 5,560 $ 4,900
Cost of revenues (5,012) (4,377)
Selling, general and administrative expenses (328) (396)
Interest expense (2) (8)
Other income (expenses), net 21 (29)
Income (loss) from continuing operations before
income taxes 239 90
Provision for income taxes (1) 0
----------- -----------
Income (loss) from continuing operations 238 90
Income (loss) from discontinued operations 0 72
----------- -----------
Net income (loss) $ 238 $ 162
=========== ===========
Net income (loss) per common share
Continuing operations $ 0.11 $ 0.04
Discontinued operations $ 0.00 $ 0.03
----------- -----------
Net income (loss) per common share $ 0.11 $ 0.07
=========== ===========
Average number of shares outstanding 2,211,083 2,377,556
=========== ===========
4
<PAGE>
PERFORMANCE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1999 AND 1998
(DOLLARS IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1999 1998
------- -------
Net cash provided by (used in) operating activities $ 770 $ 84
Cash flows from investing activities:
Decrease (increase) in receivables from sales
of businesses, net 125 0
Purchase of property and equipment (187) (75)
Proceeds from sale of property and equipment 610 0
Issuance of Notes Receivable (325) (350)
------- -------
Net cash provided by (used in) investing
activities 223 (425)
Cash flows from financing activities:
Proceeds from borrowings 0 0
Repayment of borrowings (86) (86)
(Increase) decrease in treasury stock (0) (1)
------- -------
Net cash provided by (used in) financing
activities (86) (87)
Net increase (decrease) in cash and cash equivalents 908 (428)
Cash and cash equivalents at beginning of period 1,486 2,815
------- -------
Cash and cash equivalents at end of period $ 2,394 $ 2,387
======= =======
5
<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 March 31, 1998. 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. On April 13, 1999 the company sold
its San Bernardino location. The company currently owns and operates four
restaurants in California and two in Arizona.
Revenue for the company increased from $4,900,000 to $5,560,000 or by 13% for
the first quarter of 1999 as compared to the same period last year. Net income
from restaurant operations increased from $90,000 to $238,000 for the first
quarter of 1999.
Net income which reflected a gain of $72,000 from discontinued operations in
1998 increased from $162,000 to $238,000 for the first quarter of 1999 as
compared to the same period last year.
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.
6
<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
7
<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: May 21, 1999 /s/ Joe Hrudka
---------------------------------
Joe Hrudka
Chairman of the Board
(Principal Executive Officer)
/s/ Ed Fochtman
---------------------------------
Ed Fochtman
Chief Financial Officer
(Principal Accounting Officer)
8
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<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 2,394
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<CURRENT-ASSETS> 4,287
<PP&E> 5,933
<DEPRECIATION> 2,599
<TOTAL-ASSETS> 9,800
<CURRENT-LIABILITIES> 4,306
<BONDS> 0
0
0
<COMMON> 31,202
<OTHER-SE> (25,749)
<TOTAL-LIABILITY-AND-EQUITY> 9,800
<SALES> 5,560
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<INCOME-PRETAX> 239
<INCOME-TAX> 1
<INCOME-CONTINUING> 238
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
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