<PAGE> 1
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 28, 1998
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)
1801 East Ninth Street, Cleveland OH 44114
- --------------------------------------- ---------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 687-9133
(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 [ ]
1
<PAGE> 2
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: 78,919,762
2
<PAGE> 3
SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
NOVEMBER 30, 1997 AND FEBRUARY 28, 1988
<TABLE>
<CAPTION>
NOVEMBER 30, FEBRUARY 28,
1997 1998
(AUDITED) (UNAUDITED)
--------- -----------
ASSETS
------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $1,331,981 $1,279,823
Accounts receivable 1,248,187 898,433
Inventories 1,399,944 1,441,284
Other current assets 164,920 238,311
Income tax refunds 16,000 16,000
----------- ----------
TOTAL CURRENT ASSETS 4,161,032 3,873,851
EQUIPMENT AND IMPROVEMENTS - [Net of
Accumulated Depreciation and Amortization] 242,647 236,762
OTHER ASSETS
Goodwill 238,833 235,691
Deposits and other assets 33,360 29,685
----------- ----------
TOTAL ASSETS $4,675,872 $4,375,989
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE> 4
SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (CONT'D)
NOVEMBER 30, 1997 AND FEBRUARY 28, 1988
<TABLE>
<CAPTION>
NOVEMBER 30, FEBRUARY 28,
1997 1998
(AUDITED) (UNAUDITED)
--------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Bank loans $ 2,100,000 $ 2,180,400
Accounts payable 857,937 1,171,517
Accrued expenses and other current liabilities 861,935 648,853
Due to related party 33,333 33,333
----------- -----------
TOTAL CURRENT LIABILITIES 3,853,205 4,034,103
----------- -----------
LONG-TERM DEBT
Convertible subordinated notes payable 515,000 527,750
----------- -----------
TOTAL LONG-TERM DEBT 515,000 527,750
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock, no par value, authorized
200,000,000 shares, issued 87,865,762 shares,
outstanding 78,919,762 shares 2,153,489 2,153,489
Accumulated deficit (1,554,555) (2,051,858)
Treasury shares at cost (313,218) (313,218)
Cumulative translation adjustment 21,951 25,723
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 307,667 (185,864)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,675,872 $ 4,375,989
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE> 5
SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE
MONTHS ENDED FEBRUARY 28, 1998 AND FEBRUARY 28, 1997
[UNAUDITED]
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
FEBRUARY 28 FEBRUARY 28
----------- -----------
1 9 9 8 1 9 9 7
----------- -----------
<S> <C> <C>
Net sales $ 1,350,272 $ 1,809,898
Cost of sales 707,954 858,302
------------ ------------
Gross profit 642,318 951,596
Selling, General and Administrative 1,024,313 1,257,892
Research and Development 72,504 89,140
------------ ------------
Operating loss (454,499) (395,436)
------------ ------------
Other income (expense)
Interest income 15,092 18,361
Other income 2,317 13,020
Interest expense (52,428) (16,057)
Foreign currency transaction loss (7,785) (63,830)
------------ ------------
Loss before income tax expense (497,303) (443,942)
Provision for income taxes 0 0
------------ ------------
Net loss $ (497,303) $ (443,942)
============ ============
Net loss per share $ (0.01) $ (0.01)
============ ============
Weighted Average Number of
Shares Outstanding 78,919,762 78,919,762
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE> 6
SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE
MONTHS ENDED FEBRUARY 28, 1998 AND FEBRUARY 28, 1987
[UNAUDITED]
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FEBRUARY 28 FEBRUARY 28
----------- -----------
1998 1997
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (497,303) $ (443,942)
Adjustments to reconcile net [loss] income to net cash
Provided by [used in] operating activities:
Depreciation and amortization 15,041 31,879
Provision for bad debt 0 7,251
Change in assets and liabilities:
[Increase] decrease in:
Accounts receivable 349,754 (43,628)
Inventories (41,340) 75,000
Other current assets (73,391) 15,073
Other assets 1,684 0
Increase [decrease] in:
Accounts payable 313,580 (248,077)
Accrued expenses and other current liabilities (200,332) (133,872)
Income taxes payable 0 0
Currency translation adjustment 3,772 18,914
----------- -----------
TOTAL ADJUSTMENTS 368,768 (277,460)
----------- -----------
NET CASH USED BY OPERATING ACTIVITIES (128,535) (721,402)
----------- -----------
INVESTING ACTIVITIES:
Acquisition of equipment and improvements (4,023) (1,980)
----------- -----------
NET CASH USED BY INVESTING ACTIVITIES (4,023) (1,980)
----------- -----------
FINANCING ACTIVITIES:
Net proceeds on note payable - bank 80,400 745,000
Net decrease in factoring of accounts receivable 0 (76,948)
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 80,400 668,052
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (52,158) (55,330)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIODS 1,331,981 1,697,767
----------- -----------
CASH AND CASH EQUIVALENTS - END OF PERIODS $ 1,279,823 $ 1,642,437
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
6
<PAGE> 7
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 prepayments]
necessary to present fairly the financial position at February 28, 1998 and the
results of operations and cash flows for the three months ended February 28,
1998 and February 28, 1997.
These interim statements should be read in conjunction with the audited
financial statements and notes thereto included in the Company's Annual Report
on Form 10-KSB for the fiscal year ended November 30, 1997 (Commission File No.
2-13328).
[2] The results of operations for the three months ended February 28, 1998 and
February 28, 1997 are not necessarily indicative of the results to be expected
for the full year.
[3] INVENTORY
Inventories consist of:
<TABLE>
<CAPTION>
February 28,
------------
1998
------------
<S> <C>
Raw Materials $ 532,488
Work-in-Process 193,452
Finished Goods 715,344
------------
Total $ 1,441,284
</TABLE>
[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.
7
<PAGE> 8
SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
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.
Effective November 30, 1996, Monitek Technologies, Inc., a Delaware corporation
("Monitek") became a wholly owned subsidiary of the Company, pursuant to a
merger (the "Merger") of Sentex Merger Corp., a Delaware corporation and wholly
owned subsidiary of the Company ("Subcorp"), with and into Monitek. Monitek will
now be operated as a wholly owned subsidiary of the Company. Monitek also
operates a portion of its business through a wholly owned German subsidiary of
Monitek named Monitek GmbH, which over the last three years has accounted for
over 60% of Monitek's total revenues. The Company has begun to integrate the
operations of Monitek with the operations of the Company.
Hereinafter the "Company" shall refer to Sentex Sensing Technology, Inc. and its
three wholly owned subsidiaries, Sentex Acquisition Corp., Sentex Systems, Inc.
("Sentex") and Monitek.
Sentex 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. Sentex 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.
Sentex 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 Sentex's products employ gas chromatography as the method of analysis.
Monitek designs, develops, assembles and markets instruments for the measurement
of clarity (turbidity), suspended solids content, color, purity, flow, level and
volume of liquids in industrial and waste water environments.
In March 1998, the Company purchased Cypress Instruments, Inc. ("Cypress") for
the purpose of acquiring a new product line that is currently under development
and, upon completion, is intended to be folded into the Monitek product line.
The acquisition is not material to the overall business of the Company.
The Company also intends to acquire other businesses that may be unrelated to
its present activities and is presently investigating such opportunities. As of
March 31, 1998 the Company had not entered into a firm commitment for any such
transaction.
8
<PAGE> 9
SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D)
FINANCIAL CONDITION
CAUTIONARY STATEMENT FOR PURPOSES OF THE
"SAFE HARBOUR" OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995.
Certain statements in the Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Financial Statements included in
this Quarterly Report on Form 10-QSB, in the Company's press releases and in
oral statements made by or with the approval of an authorized executive officer
of the Company constitute "forward-looking statements" as that term is defined
under the Private Securities Litigation Reform Act of 1995. These may include
statements projecting, forecasting or estimating Company performance and
industry trends. The achievement of the projections, forecasts or estimates is
subject to certain risks and uncertainties. Actual results and events may differ
materially from those projected, forecasted or estimated. The applicable risks
and uncertainties include general economic and industry conditions that affect
all businesses, as well as matters that are specific to the Company and the
markets it serves.
General risks that may impact the achievement of such forecasts include
compliance with new laws and regulations; significant raw material price
fluctuations; currency exchange rate fluctuations; business cycles; and
political uncertainties. Specific risks to the Company include an inability of
the Company to finance its working capital needs; an inability of the Company to
successfully integrate the business of Sentex and Monitek; a risk of recession
in the economies in which its products are sold, such as the Chemical or
Petroleum industries; and new or emerging products from current competitors. In
light of these and other uncertainties, the inclusion of a forward-looking
statement herein should not be regarded as a representation by the Company that
the Company's plans and objectives will be achieved.
Working capital decreased to a negative $160,000 at February 28, 1998 as
compared to $1,595,000 as of February 28, 1997. Current liabilities as of
February 28, 1998, include $260,000 owed to CPS for management fees and the
Company and CPS have agreed that such fees are not payable in the short term and
that they may be paid at some future time in the form of Common Shares rather
than cash, to the extent permitted under the New Jersey Shareholder Protection
Act. The decrease in working capital is primarily due to the losses sustained by
the Company during the last three quarters of Fiscal 1997 and the first quarter
of Fiscal 1998. Cash and cash equivalents equaled approximately $1,280,000 as of
February 28, 1998, $1,252,000 of which has been pledged to secure current
borrowings on a line of credit. As set forth in the independent auditors' report
and notes to consolidated financial statements that accompanied the Company's
Form 10-KSB for the fiscal year ended November 30, 1997, the Company's recurring
losses from operations and the
9
<PAGE> 10
SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONT'D)
resulting effect on cash flow have reduced the Company's liquidity to its
current level, which raises substantial doubt about the Company's ability to
continue as a going concern.
To address the Company's immediate working capital needs, the Company has
established two bank lines of credit and has borrowed an aggregate of $2,180,400
as of February 28, 1998 as compared to $1,315,000 in borrowings as of February
28, 1997. The primary use of the additional proceeds was to fund operating
losses incurred during the past year. As of February 28, 1998, borrowings under
one bank line of credit were $1,200,000, and were secured by cash balances of
the Company. The other bank line of credit is for a maximum of $1,000,000 and is
secured by the personal guarantee of Robert S. Kendall, the Chairman of the
Company. Borrowings under this line of credit totaled $980,400 as of February
28, 1998. From time to time, CPS has provided the Company with temporary working
capital loans and, as of March 31, 1998, there was an outstanding borrowing of
$300,000 on such loans. The Company anticipates the need to raise additional
funds during fiscal 1998 to fund its working capital needs that presently cannot
be funded through the operations of the Company. In this regard, the Company
will probably seek to expand its borrowings through increased asset based lines
of credit, which the Company cannot be assured it will be able to obtain. In the
event that additional sources of outside financing cannot be attained, CPS has
indicated to the Company that it will continue to fund the operations of the
Company through additional working capital loans to the Company. The acquisition
of Cypress by the Company will result in the Company being obligated to make
payments to the shareholders of Cypress (for payment of shares and performing
future consulting services) of approximately $530,000 over the next four fiscal
years, with over $250,000 of such amounts potentially being payable in fiscal
1998. CPS has assured the Company that it will arrange or provide the financing
required to fund the acquisition of Cypress. Although CPS and Mr. Kendall have
expressed their commitment to provide the financial resources necessary to fund
the Company's operations until a turnaround occurs, there are no formal
agreements in place pertaining to the financial commitment of CPS and Mr.
Kendall. Consequently, there can be no assurance that CPS or Mr. Kendall will
continue to provide loans to the Company or security for future lines of credit.
There are currently no material commitments anticipated for capital expenditures
during fiscal 1998. The Company will continue to seek growth through internal
means as well as further acquisitions. In the event an acquisition candidate
were identified, the Company may need to seek additional financing.
To address the Company's working capital needs on a more long-term basis, the
Company will attempt to generate cash from internal operations of the Company.
As anticipated in the Registration Statement containing the Joint
Proxy/Prospectus that was filed in connection with the Merger, however, the
Company has been unable to generate a profit during its first fiscal year of
operating the Sentex and Monitek as a combined company and there can be no
assurance that the Company will generate a
10
<PAGE> 11
SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D)
positive cash flow in fiscal 1998. The Company has, however, combined certain
aspects of the two companies during fiscal 1997 such as, realigning and
restaffing management and achieving some economies of scale that have resulted
in a modest reduction in selling, general and administrative expenses. Despite
these achievements, the ultimate profitability of the Company still depends, in
large part, on further reducing expenses and combining certain other aspects of
Sentex's and Monitek's businesses. One aspect of combining the companies that
was not achieved as well as anticipated by management during fiscal 1997 was the
attempt to integrate the sale of Sentex products into Monitek's distribution
channels. In order to rectify this situation, the Company has determined that it
will have to provide the Monitek sales representatives, who are independent
agents, additional and more specific training about the Sentex products, which
are very technical in nature and tend to be rather difficult to describe. While
no assurances can be made that the Merger will result in the Company becoming
profitable again, the Company believes that it is now, and upon the completion
of additional training of the Monitek representatives will be, in a much better
position to take advantage of the established manufacturer representative
relationships and expanded industry and market exposure, which were considered
to be Monitek's primary strengths prior to the Merger.
In addition to the effects of the Merger, the Company also intends to offer four
new products during fiscal 1998 (two of which are product offerings that were
originally scheduled for offering in fiscal 1997, but were rescheduled for
offering in fiscal 1998). These products are anticipated to increase both sales
and gross margin percentage, because they will be less expensive to produce.
Net Operating Losses; IC-DISC
The Company has approximately $8,942,000 in net operating losses as of fiscal
1997, which will expire at various dates through the year 2012 that are mainly
attributable to losses incurred by Monitek. Federal tax law imposes restrictions
on the use of net operating loss carry-forwards in the event of a change in
ownership, such as a merger. Due to the Merger, approximately $6,265,000 of the
$8,942,000 net operating losses may be subject to these limitations and
potentially may not be able to provide any economic benefit to the Company.
As of April 1, 1991, Monitek's IC-DISC, Monitek International, Inc., was
effectively terminated. As a result, Monitek had begun repatriation of the
undistributed earnings of the IC-DISC as of April 1, 1991. The undistributed
earnings of approximately $780,000 has been and will continue to be recognized
as income, for tax return purposes, over the 10-year period ending March 31,
2001.
11
<PAGE> 12
SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONT'D)
RESULTS OF OPERATIONS
Quarter Ended February 28, 1998 Compared to Quarter Ended February 28, 1997
The Company's net sales decreased by 25%, to $1,350,000 for the three months
ended February 28, 1998 ("Fiscal 1998 Three Months") from $1,810,000 for the
three months ended February 28, 1997 ("Fiscal 1997 Three Months"). Sales of
Sentex products decreased by $15,000, or 9%, primarily as a result of the
Company's inability to effectively integrate the sale of Sentex products into
Monitek's distribution channels, as noted above. Monitek's domestic sales
decreased by $129,000, or 26% and export sales from the United States decreased
by $30,000, or 19%, primarily as a result of the nature of incoming customer
orders during the periods. Under normal circumstances, Monitek is able to
provide delivery of the majority of its products within four to six weeks from
the date of order. However, during the Fiscal 1998 Three Months, several large
orders were received for product configurations that required special components
and/or handling, which added considerably to the lead time. As a result,
Monitek's backlog of unshipped customer orders increased from $233,000 at the
beginning of the Fiscal 1998 Three Months to $425,000 at the end of the period.
Sales to Continental Europe by Monitek GmbH decreased by $370,000 from the
Fiscal 1997 Three Months to the Fiscal 1998 Three Months, primarily as a result
of weakness in the European economy and an increase in the value of the U.S.
Dollar relative to the German Deutsche Mark (the "DM"). The actual decrease in
sales in Monitek GmbH's native currency, the DM, was 23% but the decrease in
U.S. Dollars, after converting the sales figures by the average exchange rate
for each period, amounted to 31%.
Cost of goods sold, as a percentage of sales, increased to 52% for the Fiscal
1998 Three Months from 47% for the Fiscal 1997 Three Months, primarily as a
result of the decrease in sales without a corresponding reduction in direct
labor and factory overhead. Direct material costs increased to 37% for the
Fiscal 1998 Three Months from 36% for the comparable Fiscal 1997 period,
primarily as a result of a change in product mix, while labor and overhead
increased to 15% from 11%.
Selling, general and administrative expenses decreased to $1,024,000 for the
Fiscal 1998 Three Months from $1,258,000 for the Fiscal 1997 Three Months. Sales
commissions decreased to $210,000 from $272,000 as a direct result of the
decrease in net sales. Cost reduction measures in the U.S., which were
implemented by management during the second half of Fiscal 1997, resulted in a
decrease of approximately $90,000 for the Fiscal 1998 Three Months as compared
to the Fiscal 1997 Three Months. Expenses at Monitek GmbH decreased by $83,000,
of which $43,000 can be attributed to the fluctuation in currency exchange rates
during the two periods.
Research and development expenses decreased to $73,000 for the Fiscal 1998 Three
Months to $89,000 for the Fiscal 1997 Three Months, primarily as a result of a
decrease in activities by outside consultants.
12
<PAGE> 13
SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONT'D)
Operating losses increased to $454,000 for the Fiscal 1998 Three Months from
$395,000 for the Fiscal 1997 Three Months, primarily as a result of the decrease
in sales and the increase in cost of goods sold, as a percentage of sales,
partially offset by the decreases in selling, general and administrative
expenses and research and development expenses.
Interest expense increased to $52,000 for the Fiscal 1998 Three Months from
$16,000 for the Fiscal 1997 Three Months as a result of increased bank and other
borrowings.
Foreign currency transactions between Monitek and its German subsidiary resulted
in losses of $8,000 for the Fiscal 1998 Three Months and $64,000 for the Fiscal
1997 Three Months as a result of fluctuations in the value of the U.S. Dollar
relative to the DM.
Net losses increased to $497,000 for the Fiscal 1998 Three Months to $444,000
for the Fiscal 1997 Three Months, primarily as a result of the increases in
operating losses and interest expense, partially offset by the decrease in
foreign currency exchange losses.
CHANGES IN ACCOUNTING STANDARDS
In February 1997, SFAS 128, Earnings per Share and SFAS 129, Disclosure of
Information About Capital Structure, were issued. SFAS 128 establishes new
standards for computing and reporting earnings per share. SFAS 129 requires an
entity to explain the pertinent rights and privileges of outstanding securities.
The Company has adopted these new standards in the current fiscal year and the
affect of the adoption was not material.
In June 1997, SFAS 130, Reporting Comprehensive Income, was issued. SFAS 130
establishes new standards for reporting comprehensive income and its components
and is effective for fiscal years beginning after December 15, 1997. The Company
expects that comprehensive income (loss) will not differ materially from net
income (loss).
In June 1997, SFAS No. 131, Disclosures About Segments of an Enterprise and
Related Information, was issued. SFAS No. 131 changes the standards for
reporting financial results by operating segments, related products and
services, geographic areas and major customers. The Company must adopt the new
standard no later that November 30, 1999.
13
<PAGE> 14
OTHER INFORMATION
Exhibits and Reports on Form 8-K
(a) No exhibits are filed herewith.
(b) During the quarter ended February 28, 1998, the Company filed no reports
on Form 8-K.
SIGNATURE
Pursuant to the requirements of section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized:
Date: April 10, 1998 SENTEX SENSING TECHNOLOGY, INC.
By: s/ Robert S. Kendall
-------------------------------------------
Robert S. Kendall, Chief Executive Officer
s/ James S. O'Leary
-------------------------------------------
James S. O'Leary, Chief Financial Officer
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit # Description
- --------- -----------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM(A) THE
CONSOLIDATED FINANCIAL STATEMENTS OF SENTEX SENSING TECHNOLOGY, INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) QUARTERLY REPORT, FILED ON
FORM 10-QSB, FOR THE PERIOD ENDING FEBRUARY 29, 1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> FEB-28-1998
<CASH> 1,279,823
<SECURITIES> 0
<RECEIVABLES> 929,426
<ALLOWANCES> 30,993
<INVENTORY> 1,441,284
<CURRENT-ASSETS> 3,873,851
<PP&E> 481,689
<DEPRECIATION> 244,927
<TOTAL-ASSETS> 4,375,989
<CURRENT-LIABILITIES> 4,034,103
<BONDS> 527,750
0
0
<COMMON> 2,153,489
<OTHER-SE> (2,339,353)
<TOTAL-LIABILITY-AND-EQUITY> 4,375,989
<SALES> 1,350,272
<TOTAL-REVENUES> 1,367,681
<CGS> 707,954
<TOTAL-COSTS> 707,954
<OTHER-EXPENSES> 1,104,602
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,428
<INCOME-PRETAX> (497,303)
<INCOME-TAX> 0
<INCOME-CONTINUING> (497,303)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (497,303)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
