UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly period ended September 30, 1995.
Commission File Number: 0-12661
Exact Name of Registrant as Specified in its Charter: IMTEC, Inc.
State of Incorporation: Delaware
I.R.S. Employer Identification Number: 03-0283466
Address of Principal Executive Offices: One Imtec Lane
Bellows Falls, VT 05101
Registrant's Telephone Number: 802-463-9502
Indicate by check mark whether the registrant (1) has filled 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 shorted period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] YES [ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common shares outstanding as of November 10, 1995: 1,478,888
<PAGE>
IMTEC, INC.
INDEX
Page #
Part I Financial Information
Condensed Balance Sheets -
September 30, 1995 and June 30, 1995 3 - 4
Condensed Statements of Income -
Three Months Ended
September 30, 1995 and 1994 5
Condensed Statements of Cash Flows
Three Months Ended
September 30, 1995 and 1994 6
Notes to Condensed Financial Statements 7 - 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II Other Information
Item 2 Changes in Securities 11
Item 4 Submission of Matters to a Vote of
Security Holders 11
Item 6 Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
IMTEC, INC.
CONDENSED BALANCE SHEETS
September 30, June 30,
1995 1995 .
(Unaudited) *
ASSETS
Current Assets:
<S> <C> <C>
Cash $ 571,599 $ 285,727
Marketable Securities 400,000 400,000
Accounts and notes receivable: Trade, less allowance for doubtful accounts:
September 30, 1995 - $103,951
June 30, 1995 - $101,042 1,086,731 1,640,008
Inventories 1,278,372 1,241,964
Prepaid expenses and deferred charges 112,614 78,683
Deferred income tax 148,489 148,489
Total Current Assets 3,597,805 3,794,871
Plant and equipment 3,452,762 2,266,232
Less: Accumulated depreciation 2,318,812 2,237,151
1,133,950 1,029,081
Other Assets:
Deposits 16,485 28,205
Computer software less accumulated amortization
of $335,987 in 1995 and $317,718 in 1995, 142,891 161,160
Other intangibles less accumulated amortization of,
$384,730 in 1995 and $362,535 in 1995 242,641 254,859
385,532 444,224
$ 5,133,772 $ 5,268,176
========= =========
</TABLE>
* From audited financial statements.
The accompanying notes are an integral part of these
condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
IMTEC, INC.
CONDENSED BALANCE SHEETS (CONTINUED)
September 30, June 30,
1995 1995 .
(Unaudited) *
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
<S> <C> <C>
Notes payable - bank $ 0 $ 0
Current installments of long term debt 0 0
Current capital lease obligations 0 0
Accounts payable 378,125 636,721
Income tax payable 95,780 4,161
Accrued liabilities
Salaries and wages 103,564 358,750
Commissions 235,906 67,113
Other 697,704 801,872
Total Current Liabilities 1,511,079 1,868,617
Long term debt less current installments - -
Long term capital lease obligations - -
1,511,079 1,868,617
Stockholder's equity:
Common stock - $.01 par value;
authorized 5,000,000 shares, issued and outstanding:
1,478,888 shares September 30, 1995
1,470,138 shares June 30, 1995 14,789 14,701
Additional paid-in capital 2,227,102 2,199,689
Retained Earnings 1,308,802 1,185,169
Total Stockholder's Equity 3,622,693 3,399,559
$ 5,133,772 $ 5,268,176
======== ========
</TABLE>
* From audited financial statements.
The accompanying notes are an integral part of these
condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
IMTEC, INC.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
September 30,
1995 1994
<S> <C> <C>
Net Sales $2,580,110 $1,853,568
Cost of Sales 1,426,444 1,029,984
Gross Profit 1,153,666 823,584
Selling, general and
administrative expenses 686,739 474,441
Research and development
expenses 154,091 113,526
Operating Profit 312,836 235,617
Other Income (Expenses):
Miscellaneous income
and other expenses 11,410 25
Interest Expense (10,484)
Income (Loss) Before
Income Taxes 324,246 225,158
Income Tax Expense 128,613 82,870
Net Income $ 195,633 $ 142,288
======= =======
Weighted average number of
common shares and common
shares equivalents outstanding 1,547,735 1,446,642
Earnings per common share and
common share equivalents $ .13 $ .10
======= =======
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
IMTEC, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
September 30,
1995 1994
Cash flows from operating activities:
<S> <C> <C>
Net Earnings $195,633 $142,288
Adjust, to reconcile net earnings to,
net cash provided by operating activities:
Depreciation & amortization of
property plant, equipment
and other assets 122,125 122,058
Decrease(inc.) in accounts receivable 553,277 (403,848)
Decrease(inc.) income tax refundable 0 112,686
Decrease (inc.) in inventory (36,408) (47,248)
(Inc.) in prepaid expenses
and other assets (22,211) (15,672)
Increase (dec.) in accounts payable (258,596) 14,794
Increase (dec.) in income tax payable 91,619 0
Increase (dec.) in accrued liabilities (190,561) 101,467
Net cash provided by operating 454,878 26,525
Cash flows from (used in) investment activities:
Expenditures for property & equipment,
computer software and other
intangible assets (196,507) (74,747)
Net cash used in invest. activities (196,507) (74,747)
Cash flows from (used in) financing activities:
Proceeds form issuance of notes 104,230
Principal notes payable to bank
Principal payments on long term debt (34,378)
Principal payments under capital
lease obligations (2,477)
Proceeds from issuance of stock 27,501 2,003
Net cash provided by finance
activities 27,501 69,378
Net increase (decrease) in cash 285,872 21,155
Cash at the beginning of period 285,727 3,627
Cash at the end of period $ 571,599 $ 24,782
======= ======
Supplemental Information Disclosures:
Interest paid $ 10,484
Income tax paid $ 36,994 $ 1,378
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
IMTEC, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1 - Basis of Presentation
The financial information included herein is unaudited: however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of results for the interim periods.
The results of operations for the three month period ended September
30, 1995 are not necessarily indicative of the results to be expected for the
full year.
2 - Inventories
<TABLE>
Inventories consist of:
September 30, June 30,
1995 1995
<S> <C> <C>
Finished Products $ 25,844 $ 403,512
Work in Process 59,700 121,200
Purchased Components 1,192,828 1,046,906
1,278,372 1,571,618
Less: Progress billing -- (329,654)
$ 1,278,372 $ 1,241,964
======== ========
</TABLE>
Inventory cost consisted of the cost of purchased components and
supplies, manufacturing labor and manufacturing overhead.
3 - Liability for Estimated Product Warranty
On September 30, 1995 and June 30, 1995, the Company had provided
$277,268 and $289,906 respectively, against future product warranties based on
its experience with customer claims. Warranty expenses charged to income
amounted to approximately $32,812 for the three month period ended September 30,
1995 and $13,924 for the three month period ended September 30, 1994.
<PAGE>
4 - Earnings (Loss) per Common Share
Primary earnings per share were computed by dividing net earnings
(loss) by the weighted average number of shares of common stock equivalents
outstanding during the year, if dilutive. Common stock equivalents (stock
options and warrants) are assumed to be exercised when they are issued and the
proceeds used to repurchase outstanding shares of the Company's common stock at
the average price during the period.
The fully-diluted computation is performed using the same method as for
the primary computation, except that the proceeds from exercised stock options
and warrants are assumed to be used to repurchase outstanding shares of the
Company's common stock at the higher of the average or September 30, market
price.
The average number of common share and common share equivalents
entering into the calculation of primary and fully-diluted earnings per share
are as follows:
<TABLE>
Three months ended September 30,
1995 1994
<S> <C> <C>
Common shares 1,475,355 1,332,642
Options 72,380 59,797
Warrants -- 41,013
Total for primary calculation 1,547,735 1,433,452
Options -- 9,780
Warrants -- 3,410
Total for fully-diluted calculation 1,547,735 1,446,642
======= =======
</TABLE>
<PAGE>
IMTEC, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Three Months Ended September 30, 1995
as compared to Three Months Ended September 30, 1994
Revenues for the three months ended September 30, 1995 increased
approximately 39.2% over the corresponding period in 1994.
Revenues from the sales of Industrial Bar Code Equipment were
$1,405,171 for the three months ended September 30, 1995 compared to $713,120
for the same period in 1994. Industrial Bar Code Equipment sales represented
54.5% of total revenue for the three months ended September 30, 1995 compared to
38.5% for the same period last year. Approximately $732,000 represented sales to
a single customer compared to approximately $350,000 for the same period last
year to the same customer. Management believes that the upward trend in
Industrial Bar Code Equipment sales will continue due to additions to the
machine sales force, expanded partnering and distribution relationships and new
product offerings. The machine backlog, exclusive of the single customer
mentioned above, has increased from $396,616 at September 30, 1994 to $560,560
at September 30, 1995.
Revenues from Bar Code labels and printing supplies were $1,174,939 for
the quarter ended September 30, 1995 compared to $1,140,309 for the same period
last year. Bar Code labels and printing supplies represented 45.5% of total
revenue for the three months ended September 30, 1995 compared to 61.5% for the
same period last year. Management believes that the relatively stable revenues
are related to the installation of a new coater at the Company's Media
production facility during this quarter and attendant delays in production and
shipping schedules.
Cost of sales for the three months ended September 30, 1995 were 55.3%,
down slightly from 55.6% for the same period in 1994.
Selling, general and administrative expenses were $686,739 for the
quarter ended September 30, 1995 as compared to $474,441 for the quarter ended
September 30, 1994. This increase is the result of several steps taken: 1) to
reopen the Company's sales office in Dallas, TX., 2) increase attendance at
various industry trade shows, 3) increased paid advertising in industry trade
magazines and 4) investment in product support materials. Total backlog as of
September 30, 1995 was approximately $1,425,000, all of which is expected to be
shipped by June 30, 1996, compared to approximately $3,400,000 (approximately
$911,000 of which was not related to a single customer's long standing order) as
of September 30, 1994. While overall backlog decreased, there was an increase in
backlog of orders exclusive of the single customer mentioned above from
approximately $911,000 as of September 30, 1994 to approximately $1,425,000 as
of September 30, 1995.
Development and engineering expenses for the quarter ended September
30, 1995 were $154,091 (6.0% of sales) compared to $113,526 (6.1% of sales) for
the same period last year. This increase reflects ongoing commitment to
advancing the Company's technology and the efforts to bring several new products
to the market.
Income tax expense is a direct result of the Company's net income or
loss before taxes.
Net income for the quarter ended September 30, 1995 was $198,633
compared to $142,288 for the quarter ended September 30, 1994. The major reason
for this increase is the increase in product sales.
As of September 30, 1995, the Company's principal available sources of
liquidity were, respectively, from operations and a $700,000 bank line of
credit, all of which was available as of September 30, 1995.
Accounts receivable decreased from $1,640,008 at June 30, 1995 to
$1,086,731 at September 30, 1995, a direct result of the increase in efforts to
encourage customers to pay within terms. The average aged receivable dropped
from 74.3 days for the quarter ended September 30, 1994 to 42 days for the
quarter ended September 30, 1995.
Inventories increased slightly, from $1,241,964 at June 30, 1995 to
$1,278,372 at September 30, 1995.
The Company's capital commitments for fiscal 1996 are expected to be at
the same level as fiscal 1995.
The Company believes that it will be able to offset the effects of
inflation by selected price increases in its products, although it can give no
assurances in this regard.
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
Not applicable
Item 3 - Defaults Upon Senior Securities
None
Item 4 - Submission if Matters to a Vote of Security Holders
Not applicable
Item 5 - Information
None
Item 6 - Exhibits and Reports on Form 8-K
None
<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 hereunto duly authorized.
IMTEC, INC.
BY:____/s/ Richard L. Kalich___________
Richard L. Kalich
President & Chief Executive Officer
BY:____/s/ George S. Norfleet III_____
George S. Norfleet III
Secretary / Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
IMTEC, Inc., EX-27, FDS for 10-Q, September 30, 1995
</LEGEND>
<CIK> 0000730045
<NAME> IMTEC, INC.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 571599
<SECURITIES> 400000
<RECEIVABLES> 1190682
<ALLOWANCES> 103951
<INVENTORY> 1278372
<CURRENT-ASSETS> 3597805
<PP&E> 3452762
<DEPRECIATION> 2318812
<TOTAL-ASSETS> 5133772
<CURRENT-LIABILITIES> 1511079
<BONDS> 0
<COMMON> 14789
0
0
<OTHER-SE> 2227102
<TOTAL-LIABILITY-AND-EQUITY> 5133772
<SALES> 2580110
<TOTAL-REVENUES> 2580110
<CGS> 932031
<TOTAL-COSTS> 1426444
<OTHER-EXPENSES> 840830
<LOSS-PROVISION> 1500
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 324246
<INCOME-TAX> 128613
<INCOME-CONTINUING> 195633
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 195633
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.13
</TABLE>
