SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15D
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended July 31, 1997
Commission file number 0-12195
THERMWOOD CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 35-1169185
(State of incorporation) (IRS Employer Identification number)
Old Buffaloville Road
P.O. Box 436
Dale, Indiana 47523
(Address of principal executive offices) (Zip Code)
(812) 937-4476
(Registrant's telephone number including area code)
______________
Securities registered pursuant to Section 12 (b) and 12 (g) of the
Act:
Shares of Common Stock without par value
Indicate by check mark 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 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 [ ]
Indicate by mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-
affiliates of the Registrant at October 28, 1997 based upon the
closing price of the Registrant's Common Stock as reported on the
American Stock Exchange was approximately $10,847,723.
The number of the Registrant's shares of Common Stock outstanding as
of October 20, 1997 was 7,077,546 shares.
Documents Incorporated by Reference :
Exhibits to Registrant's Registration Statement on Form S-1 (No. 2-
87641) filed under the Securities Act of 1933 and effective April
12, 1984, its Registration Statement on Form 8-A filed under the
Securities Act of 1934 and Current Reports filed on Form 8-K dated
February and April, 1987, and its Registration Statement on Form 8-A
filed under the Securities Act of 1934 dated November, 1989, its
Registration Statement on Form SB-2 (No. 33-54756) which became
effective on February 22, 1993, and amended as of July 14, 1995, and
its Forms 10-K for the years ended July 31, 1993, July 31, 1994,
July 31, 1995 and July 31, 1996.
PART I
Item 1. Business
Marketing
One dealer accounted for approximately 18% of the Company's sales for
the fiscal year ended July 31, 1997. See Item 13. "Certain
Relationships and Related Transactions" for information relating to
the Company's agreement with Automated Associates which is owned by
the Company's president and his wife who is also an officer and
director. The 18% of the Company's sales was the result of selling
to 27 different customers. None of these customers accounted for 10%
or more of the Company's sales in the fiscal year ended July 31,
1997.
Two other dealers, Index, Inc. and Process and Production Equipment,
Inc., accounted for approximately 12% each of the Company's business
during the 1997 fiscal year. Index, Inc. sold to 17 different
customers, and Process and Production Equipment, Inc. sold to 16
different customers. None of these customers accounted for 10% or
more of the Company's sales in the fiscal year ended July 31, 1997.
No other dealer accounted for 10% or more of the Company's business
for the fiscal year. The loss of any large dealer could have a
materially adverse effect on the Company's business. Thermwood's
business is not seasonal.
THERMWOOD CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years ended July 31, 1997, 1996 and 1995
<TABLE>
PREFERRED STOCK COMMON STOCK
---------------------- ---------------------- Subscrip-
tions Accumu-
Recei- lated
Shares Amount Shares Amount vable Deficit)
----------- ---------- ---------- ----------- ------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balances at
July 31, 1994 1,000,000 $3,437,120 5,149,546 $8,988,897 $0 $(10,970,419)
Preferred
dividends paid 0 0 0 0 0 (367,910)
---------- ---------- ---------- ----------- ------- --------------
Net earnings 2,349,794
Balances at
July 31, 1995 1,000,000 3,437,120 5,149,546 8,988,897 0 (8,988,535)
Preferred
dividends paid 0 0 0 0 0 (330,055)
Redemption of
preferred
stock (100,000) (340,000) 0 0 0
Conversion of 12%
debentures, net
of related bond
issuance costs
and unamortized
discount 0 0 1,307,000 1,115,507 0
Exercise of qualified
stock options 0 0 52,000 56,000 (28,125)
Exercise of other
stock options 0 0 30,000 30,000 0
Net earnings 0 0 0 0 0 2,334,428
------- ---------- --------- ----------- -------- -------------
Balances at
July 31, 1996 900,000 $3,097,120 6,538,546 10,190,404 (28,125) (6,984,162)
Subscriptions
received 3,375
Preferred
dividends paid 0 0 0 0 0 (285,204)
Redemption of
preferred
stock (162,000) (550,800) 0 0 0 0
Conversion of 12%
debentures, net of
related bond
issuance costs and
unamortized discount 0 0 462,000 408,881 0
Net earnings 0 0 0 0 0 1,235,824
------- ---------- --------- ----------- --------- ------------
Balances at
July 31, 1997 738,000 $2,546,320 7,000,546 $10,599,285 $(24,750) $(6,033,542)
======= ========== ========= =========== ========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES :
General :
The consolidated financial statements include the accounts of
Thermwood Corporation and its wholly-owned subsidiary, Thermwood
Europe Limited, a United Kingdom company. The term "Company" refers
to the consolidated operations of Thermwood Corporation and its
subsidiary.
The Company operates within a single business segment called
industrial automation equipment, and manufactures high technology
machining systems. The Company sells its products primarily through
the assistance of dealer networks established throughout the United
States and Europe. Three dealers accounted for approximately 42% of
the Company's business. These dealers assisted in selling machines
to a total of 60 different customers. None of these customers
accounted for more than 10% of the Company's sales in the fiscal
year ended July 31, 1997. The loss of any large customer or dealer
could have a materially adverse effect on the Company's business.
Use of Estimates and Assumptions:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities,
and the reported amounts of revenues and expenses. Actual results
could differ from those estimates.
Even though the balance in accounts receivable has more than doubled
for the fiscal year ended July 31, 1997, the allowance for doubtful
accounts was unchanged. Historically, the Company has never had bad
debt write-offs of more than .1% of annual sales. Individual
customer balances in accounts receivable are generally a maximum of
30% of the sales price of a machine. At least 70% of the amount a
customer would owe is collected before the equipment is shipped. If
a customer has a broken machine and is not paying for their machine
or parts, service is discontinued until payment is made. It is
management's opinion that this policy and collection methods, along
with careful credit approval for new customers, is strong enough to
not warrant increasing the allowance account.
Revenues and Warranties:
The manufacturing process may extend over several months and advance
cash deposits are normally required from customers. Sales are
recorded when machines are shipped. Revenues of technical services
are recognized when the service is performed. Estimated costs of
product warranties are charged to cost of sales at the time of sale.
Two customers in fiscal years ended July 31, 1995 and 1996 requested
that their machines be held at Thermwood's plant so that the
customers could send their people for training on the machines they
purchased rather than Thermwood's training machines. In these
cases, the customers signed documents accepting the machines, thus
passing title to the customers. The machines were not counted in
Thermwood's ending inventories, the entire revenues for these
machines were included in sales figures, and the machines were
shipped after the customers' training. There were no transactions
of this nature during fiscal year 1997.
NOTE B -- INVENTORIES:
Inventories at July 31 consist of:
<TABLE>
1997 1996
--------- ----------
<S> <C> <C>
Finished goods $ 644,477 $ 508,910
Work-in-process 1,171,484 903,447
Raw materials 2,802,040 1,916,980
------------ ----------
$ 4,618,001 $3,329,337
============ ==========
</TABLE>
