<PAGE>
Form 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended February 29, 1996
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 0-13328
SENTEX SENSING TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-2333899
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
553 Broad Avenue, Ridgefield, New Jersey 07657
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 945-3694
(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 of 15(d) of the Securities and 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 ___
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities and Exchange Act of 1934
after the distribution of securities under a plan confirmed by a court.
Yes ___ No ___
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 67,360,081
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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF FEBRUARY 29, 1996 [UNAUDITED]
Assets:
Current Assets:
Cash and Cash Equivalents $ 1,978,055
Certificate of Deposit 90,000
Accounts Receivable 217,862
Inventories 220,681
Prepaid Expense 67,875
Income Tax Refunds 12,400
Note Receivable 63,038
Other Current Assets 15,755
Total Current Assets 2,665,666
Equipment and Improvements - [Net of
Accumulated Depreciation and Amortization] 43,232
Other Assets 8,992
Total Assets $ 2,717,890
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $ 50,516
Accrued Expenses and Other Liabilities 64,358
Total Current Liabilities 114,874
Commitments and Contingencies --
Stockholders' Equity:
Common Stock, No Par Value, Authorized
200,000,000 Shares, Issued 76,206,081 Shares,
Outstanding 67,360,081 Shares 1,955,489
Retained Earnings 960,745
Total 2,916,234
Less: Treasury Stock-At Cost-8,846,000 Shares 313,218
Total Stockholders' Equity 2,603,016
Total Liabilities and Stockholders' Equity $ 2,717,890
See Notes to Consolidated Financial Statements.
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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS [UNAUDITED]
Three months ended
February 29 February 28
1 9 9 6 1 9 9 5
Revenues:
Net Sales $ 309,045 $ 326,100
Interest and Other Income 19,255 96,025
Total Revenues 328,300 422,125
Costs and Expenses:
Cost of Sales 140,282 175,661
Selling, General and Administrative 283,138 140,352
Research and Development 54,433 86,855
Total Costs and Expenses 477,853 402,868
[Loss] Income Before Income Taxes (149,553) 19,257
Provision for Income Tax [Benefit] 0 (39,329)
Net [Loss] Income (149,553) 58,586
Net Income per Share $ 0 $ 0
Weighted Average Number of
Shares Outstanding 67,360,081 72,246,393
See Notes to Consolidated Financial Statements
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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS [UNAUDITED]
THREE MONTHS ENDED
February 29 February 28
1 9 9 6 1 9 9 5
Operating Activities:
Net [Loss] Income $ (149,553) $ 58,586
Adjustments to Reconcile Net [Loss]
Income to Net Cash Provided by [Used in]
Operating Activities:
Depreciation 5,759 3,649
Deferred Income Tax 0 (1,560)
Gain on Sale of Assets (1,500) 0
Gain on Sale of Investments (6,384) 0
Provision for Bad Debt 15,838 0
Change in Assets and Liabilities:
[Increase] Decrease in:
Accounts Receivable 30,253 92,821
Inventories 13,294 (9,891)
Prepaid Expenses (56,252) 0
Other Current Assets 17,990 (22,533)
Income Tax Refund -- (48,068)
Other Assets 1,743 0
Increase [Decrease] in:
Accounts Payable 13,066 (19,837)
Accrued Expenses and Other Current Liabilities (16,031) 813
Total Adjustments 17,466 (4,606)
Net Cash Provided [Used] by Operating
Activities (132,087) 53,980
Investing Activities:
Proceeds on Sale of Equipment 1,500 5,311
Redemption of Short-Term Investments 222,667 1,383,376
Purchase of Treasury Stock 0 (51,511)
Net Cash Provided by - Investing Activities 224,167 1,337,176
Net Increase (Decr) in Cash
and Cash Equivalents 92,080 1,391,156
Cash and Cash Equivalents
- Beginning of Periods 1,885,975 576,157
Cash and Cash Equivalents
- End of Periods $ 1,978,055 $ 1,967,313
See Notes to Consolidated Financial Statements
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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS [UNAUDITED]
[1] In the opinion of management, the unaudited financial statements contain
all adjustments [consisting of only normal recurring accruals and repayments]
necessary to present fairly the financial position at February 29, 1996 and
the results of operations and cash flows for the three months ended February
29, 1996 and February 28, 1995.
[2] The results of operations for the three months ended February 29, 1996
and February 28, 1995 are not necessarily indicative of the results to be
expected for the full year.
[3] Inventory
Inventories consist of:
February 29
1 9 9 6
Raw Materials $ 112,373
Work-in-Process 29,425
Finished Goods 78,883
Total $ 220,681
[4] Earnings per Share
Earnings [loss] per share are based on the weighted average number of common
shares outstanding for the periods presented, after adjustment for the shares
issued in the stock acquisition.
[5] Principles of Consolidation
The consolidated financial statements include the accounts of Sentex Sensing
Technology, Inc. and its wholly-owned subsidiaries [the "Company"]. All
material inter-company accounts and transactions have been eliminated in
consolidation.
[6] Reclassification
Certain items pertianing to the prior year have been reclassified to conform
with the current year's presentation.
. . . . . . . . . . . . . . . .
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SENTEX SENSING TECHNOLOGY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company formed two wholly owned subsidiaries, Sentex Systems, Inc., and
Sentex Acquisitions Corp. on May 31, 1991 to separate the present operations
of the Company into a subsidiary to continue the business of designing,
developing and marketing gas chromatographic devices, and a subsidiary to
develop and acquire new investment opportunities. On November 10, 1992
Sentex Systems, Inc. one of the wholly owned subsidiaries was merged back
into Sentex Sensing Technology, Inc. but was reincorporated, in the State of
Delaware, on August 30, 1994. Hereinafter the "Company" shall refer to
Sentex Sensing Technology, Inc. and its two wholly owned subsidiaries,
Sentex Acquisition Corp. and Sentex Systems, Inc.
RESULTS OF OPERATIONS
The Company is engaged in the business of developing, manufacturing and
selling automated devices designed to identify and measure the concentrations
of certain chemicals in air, water and soil. The Company sells a portable
and walk-through explosives detector, two portable air analyzers, a portable
and fixed-site water monitoring system and a sensor which measures the total
organic content of air. The Company, also, provides technical assistance and
service to its customers and on occasion, performs research and development,
on a contractual basis, to develop instrumentation designed to fulfill
customer-specific analytical requirements. All of the Company's products
employ gas chromatography as the method of analysis.
The Company also intends to develop, acquire or merge with other businesses
which may be unrelated to its present activities and is presently
investigating such opportunities. As of March 31, 1996 the Company has not
entered into a firm commitment to enter such transaction.
QUARTER ENDED FEBRUARY 29, 1996 COMPARED TO QUARTER ENDED
FEBRUARY 28, 1995
Total revenue decreased, at February 29, 1996 to $328,300 as compared
to $422,125 at February 28, 1995, primarily as a result of a significant
decrease in other income, which in 1995 included non-recurring revenues
of $60,000 from a research and development contract. For the three months
ended February 29, 1996 net sales dropped to $309,045 from $326,100 for the
comparative period ended February 28, 1995 in the prior fiscal year. Cost
of goods sold as a percentage of sales decreased to 45% for the three months
ended February 29, 1996 as compared to 54% during the comparable period the
prior year. Gross profit dollars for the three month period ended February
29, 1996 increased to $168,763 from $150,439 during the comparable period
the prior year. The increased margin was generated from a favorable change
in the mix of products sold.
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Orders for the Company's products received but not yet delivered as of
February 29, 1996 amounted to $42,046 which represents a decrease from orders
received but not yet delivered as of February 28, 1995 of $170,611.
Operations resulted in a net loss of $149,553 for the three months ended
February 29, 1996 as compared to income of $58,586 for the comparative period
ended February 28, 1995 in the prior fiscal year. The loss, when compared to
prior year, was caused by lower sales, non-recurring revenue from the prior
year of $60,000 and an increase in Selling, General and Administrative
expenses of $142,786 during the comparable three month period ending February
29, 1996 to February 28, 1995.
Selling, general and administrative expenses increased sharply for the three
months ended February 29, 1996 to $283,138 from $140,352 for the comparable
period the prior year which ended February 28, 1995. This increase was a
result of increases in advertising, legal, consulting and bad debt expenses.
These were one time expenses and are not anticipated to reoccur in the future.
Inventory increased at February 29, 1996 to $220,681 as compared to $199,195
at February 28, 1995 as a result of increases in raw materials and work-in-
process inventory.
FINANCIAL CONDITION
Current liabilities as of February 29, 1996 were $114,874 a decrease from
$173,766 at the end of February 28, 1995. Working capital decreased to
$2,550,792 for the period ended February 29, 1996 as compared to $2,899,001
at February 28, 1995.
The Company's financial condition has declined slightly over the past twelve
months due to a lower than expected sales performance. Total current assets
amounted to $2,665,666 at February 29, 1996 as compared to $3,072,767 as of
February 28, 1995.
Cash and short-term investments and Certificate of Deposit amounted to
approximately $2,100,000 as of February 29, 1996. The Company has no
significant commitments at this time which would require that it expend
a significant portion of its capital. Accordingly, the amount of funds
currently available are expected to be sufficient to fulfill the
Company's anticipated cash requirements and other uses throughout 1996.
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PART II - OTHER INFORMATION - None
SIGNATURE
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 therunto duly authorized.
Sentex Sensing Technology, Inc.
/s/ James G. Few
James G. Few
Chief Financial Officer
Dated: April 15, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet and the consolidated statements of operations and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> FEB-29-1996
<CASH> 1,978,055
<SECURITIES> 0
<RECEIVABLES> 220,862
<ALLOWANCES> 3,000
<INVENTORY> 220,681
<CURRENT-ASSETS> 2,665,666
<PP&E> 43,232
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,717,890
<CURRENT-LIABILITIES> 114,874
<BONDS> 0
<COMMON> 1,955,489
0
0
<OTHER-SE> 647,527
<TOTAL-LIABILITY-AND-EQUITY> 2,717,890
<SALES> 309,045
<TOTAL-REVENUES> 328,300
<CGS> 140,282
<TOTAL-COSTS> 477,853
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (149,553)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (149,553)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
