<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d)
of the Securities Act of 1934
For the quarter ended Commission File No. 0-13403
March 31, 1998
- --------------------------------------------------------------------------------
AMISTAR CORPORATION
(Exact name of registrant as specified in its Charter)
- --------------------------------------------------------------------------------
STATE OF CALIFORNIA 95-2747332
(State or other jurisdiction of Incorporation (I.R.S. Employer
or organization) Identification No.)
237 VIA VERA CRUZ 92069
SAN MARCOS, CALIFORNIA (Zip Code)
(Address of principle executive offices)
(760) 471-1700
(Registrant's telephone number, including area code)
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
--- ---
CLASS OUTSTANDING AT MAY 8, 1998
Common Stock $.01 Par Value 3,236,500
1
<PAGE>
Part 1.
Item 1. Financial Statement
AMISTAR CORPORATION
AND SUBSIDIARIES
Condensed Balance Sheets
(In thousands)
MAR 31,* DEC. 31,
1998 1997
------------ ------------
ASSETS
Current assets:
Cash $ 2,614 $ 2,521
Trade accounts receivable, net 5,784 5,574
Inventories 5,371 5,327
Demonstration equipment 303 531
Prepaid expenses 234 272
Deferred income taxes 695 695
------------ ------------
Total current assets 15,001 14,920
Property & equipment, net 5,377 5,146
Contracts receivable 474 700
Restricted cash 1,329 1,329
Other 209 141
------------ ------------
$ 22,390 $ 22,236
============ ============
LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities:
Accounts payable & accrued liabilities $ 1,976 $ 2,072
Income taxes payable 289 216
------------ ------------
Total current liabilities 2,265 2,288
Industrial development bonds 4,500 4,500
Shareholders' equity
Common stock 32 32
Additional paid in capital 4,843 4,843
Retained earnings 10,750 10,573
------------ ------------
Total shareholders' equity 15,625 15,448
------------ ------------
$ 22,390 $ 22,236
============ ============
* Unaudited
See accompanying notes to financial statements.
2
<PAGE>
AMISTAR CORPORATION
AND SUBSIDIARIES
Condensed Statements of Earnings
(Unaudited and In thousands, except share amounts)
Three months ended March 31, 1998 1997
- --------------------------------------------------------------------------------
Net sales $ 5,306 $ 6,415
Cost of sales 3,575 4,105
-------------- --------------
Gross profit 1,731 2,310
Operating expenses:
Selling 875 1,132
General & administrative 290 266
Research & development 297 388
-------------- --------------
1,462 1,786
-------------- --------------
Earnings from operations 269 524
Other income, net 3 37
-------------- --------------
Earnings before income taxes 272 561
Income taxes 95 225
-------------- --------------
Net earnings $ 177 $ 336
============== ==============
Basic and diluted earnings
per common share $ 0.05 $ 0.10
============== ==============
Weighted average shares
outstanding 3,236,500 3,235,250
============== ==============
See accompanying notes to financial statements.
3
<PAGE>
AMISTAR CORPORATION
AND SUBSIDIARIES
Statements of Cash Flows
(Unaudited and In thousands)
Three months ended March 31, 1998 1997
- -------------------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 177 $ 336
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation & Amortization 169 133
Gain on sale of equipment (12) (39)
Changes in assets & liabilities:
Accounts receivable, net (210) 825
Inventories 297 (602)
Demonstration equipment (113) 52
Prepaid expenses & other assets (30) (120)
Contracts receivable 226 69
Accounts payable & accrued liabilities (96) (97)
Income taxes payable 73 180
--------- ----------
Cash provided by operating activities 481 737
Cash flows from investing activities:
Capital expenditures (400) (358)
Proceeds from sale of equipment 12 39
---------- ----------
(388) (319)
Cash flows from financing activities:
Common stock issued for stock options - 14
---------- ----------
Net increase (decrease) in cash 93 432
Cash at the beginning of the period 2,521 1,892
---------- ----------
Cash at the end of the period $ 2,614 $ 2,324
========== ==========
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 44 $ 42
Income tax $ 22 $ 55
See accompanying noates to financial statements.
4
<PAGE>
AMISTAR CORPORATION
AND SUBSIDIARIES
Notes to Condensed Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
- ---------------------
The Interim Consolidated Condensed Financial Statements of Amistar
Corporation, a California corporation, and subsidiaries (the "Company") have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to such rules and regulations. These Interim Consolidated Condensed
Financial Statements should be read in conjunction with the audited financial
statements and notes thereto included in the Company's 1997 annual report on
Form 10-K as filed with the Securities and Exchange Commission on March 25,
1998.
Inventories
- -----------
Inventories are stated at the lower of cost (first-in, first-out) or market
and include material, labor and manufacturing costs. Inventories consist of the
following (in thousands):
Mar 31, Dec. 31,
1998 1997
------------ ------------
Raw Material $ 913 $ 884
Work In Process 2,686 2,670
Finished Goods 1,772 1,773
============ ============
$ 5,371 $ 5,327
============ ============
Comprehensive Income
- --------------------
As of January 1, 1998, the company adopted Statement of Financial Accounting
Standards No. 130 "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130
establishes new rules for the reporting and display of comprehensive income and
its components. The adoption of SFAS 130 has no impact on the Company's net
income or shareholders' equity. For the three months ended March 31, 1998 and
1997, comprehensive income equaled net income.
5
<PAGE>
AMISTAR CORPORATION
AND SUBSIDIARIES
Notes to Condensed Financial Statements, Continued
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Forward Looking Statements
- --------------------------
This Quarterly Report, contains forward-looking statements within the
meaning of the Private Securities Reform Act of 1995, particularly statements
regarding market opportunities, customer acceptance of products, gross margin
and marketing expenses. These forward-looking statements involve risks and
uncertainties, and the cautionary statements set forth below, identify important
factors that could cause actual results to differ materially from those in any
such forward-looking statements. Such factors include, but are not limited to,
adverse changes in general economic conditions, including changes in the
specific markets for the Company's products, product availability, decreased or
lack of growth in the electronics industry, adverse changes in customer order
patterns, increased competition, lack of acceptance of new products, pricing
pressures, lack of success in technological advancements, risks associated with
foreign operations and other factors.
RESULTS OF OPERATIONS
Net Sales
- ---------
Net sales for the three months ended March 31, 1998, were $5,306,000
compared to $6,415,000 for the same period in the prior year. Machine sales have
been affected by customer delays in accepting additional units while awaiting
newer models, limited acceptance in certain sectors of the contract assembly
market, the effects of oversupply in the memory module industry and the
intensifying of competition.
The first two factors mentioned above are expected to continue until the
third quarter when the Company expects to receive the newest technology pick and
place machine from its offshore supplier. At that time, the Company expects the
new model to appeal to a broader sector of the market and satisfy delayed orders
from its current customer base.
Gross Margin
- ------------
Gross margin for the current quarter decreased as a percentage of sales due
to higher manufacturing variances related to re-costing the Company's line of
machine feeders. In addition, the Company increased management and support
personnel related to expansion of the Manufacturing Services Division.
Sales, General and Administrative
- ---------------------------------
Selling expenses declined in the current quarter primarily due to lower
commission expenses which related to lower sales. Research and development
expenses decreased in the current quarter due to the recent conclusion of
several development projects.
6
<PAGE>
AMISTAR CORPORATION
AND SUBSIDIARIES
Notes to Condensed Financial Statements, Continued
LIQUIDITY AND CAPITAL RESOURCES
The Company generated cash from operating activities totaling $481,000 for
the current quarter. Contracts receivable decreased and accounts receivable
increased primarily due to reclassification of a contract to accounts
receivable. Demonstration equipment decreased $228,000 primarily related to
transfers to inventory from the Company's former European facility. Expenditures
for the current quarter, for property and equipment were $400,000, and primarily
consisted of surface mount machines for the Manufacturing Services Division
expansion.
PART II.
Items 1-6 Non-Applicable
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.
AMISTAR CORPORATION
By:/s/ William W. Holl
-----------------------
William W. Holl
Vice President - Finance
Chief Accounting Officer &
Duly Authorized Officer
7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AS OF MARCH 31, 1998 AND THE RELATED STATEMENT OF OPERATIONS FOR
THE PERIOD ENDED MARCH 31, 1998.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,614
<SECURITIES> 0
<RECEIVABLES> 5,784
<ALLOWANCES> 0
<INVENTORY> 5,371
<CURRENT-ASSETS> 15,001
<PP&E> 5,377
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,390
<CURRENT-LIABILITIES> 2,265
<BONDS> 4,500
32
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 22,390
<SALES> 5,306
<TOTAL-REVENUES> 5,306
<CGS> 3,575
<TOTAL-COSTS> 3,575
<OTHER-EXPENSES> 1,462
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42
<INCOME-PRETAX> 272
<INCOME-TAX> 95
<INCOME-CONTINUING> 177
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 177
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
