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 June 30, 1995
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-12117
VENTURIAN CORP.
(Exact name of registrant as specified in its charter)
Minnesota 41-1460782
(State or other jurisdication of IRS Employer ID Number
incorporation or organziation)
1600 Second Street South, Hopkins, MN 55343
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (612) 931-2500
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding twelve months and (2) has been subject to the filing requirements for
at least the past 90 days.
Yes _X_ No __
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practical date:
Outstanding at August 11, 1995
$1.00 par value common shares 747,789
VENTURIAN CORP. AND SUBSIDIARIES
FORM 10-Q
INDEX
PART I. Financial Information
Item 1.
Consolidated Condensed Balance Sheets
June 30, 1995 and December 31, 1994 3
Consolidated Condensed Statements of Operations
Three and six months ended June 30, 1995 and 1994 4
Consolidated Condensed Statements of Cash Flows
Six months ended June 30, 1995 and 1994 5
Notes to Consolidated Condensed Financial
Statements 6
Item 2.
Management's Discussion and Analysis of
the Results of Operations and Financial Condition 11
PART II. Other information
Item 6. Exhibits and Reports on Form 8-K 17
Venturian Corp. and Subsidiaries
Consolidated Condensed Balance Sheets
(Dollars in thousands)
(Unaudited)
June 30, December 31,
1995 1994
Current assets
Cash and cash equivalents $ 844 $ 825
Accounts receivable, less allowance
for doubtful accounts of $175 in June
1995 and $271 in December 1994 4,858 3,598
Inventories 3,582 4,404
Restricted cash 655 2,103
Real estate held for sale 2,583 2,678
Prepaid expenses 226 279
Total current assets 12,748 13,887
Property and equipment - at cost
Buildings and improvements 1,674 1,659
Equipment 5,132 5,070
6,806 6,729
Less accumulated depreciation and amortization 5,373 5,199
1,433 1,530
Land 529 529
1,962 2,059
Other assets 3,147 3,165
$ 17,857 $ 19,111
Liabilities and Stockholders' Equity
Current liabilities
Bank overdraft $ 369 $ 317
Current maturities of long-term debt 118 118
Accounts payable 1,527 1,846
Advances from customers 446 407
Accrued liabilities 1,085 1,120
Rental real estate mortgage and related costs 1,698 1,825
Net liabilities of discontinued operations 942 227
Total current liabilities 6,185 5,860
Long-term debt, less current maturities 242 322
Deferred compensation and postretirement benefits 2,470 2,483
Commitments and contingencies -- --
Stockholders' equity
Common stock - $1 par value 748 748
Additional contributed capital 14,661 14,661
Accumulated deficit (6,449) (4,963)
8,960 10,446
$ 17,857 $ 19,111
The accompanying notes are an integral part of these statements.
Venturian Corp. and Subsidiaries
Consolidated Condensed Statements of Operations
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $ 5,470 $ 5,565 $ 11,288 $ 12,518
Cost of products sold 3,926 4,017 7,822 9,077
Gross profit 1,544 1,548 3,466 3,441
Operating expenses
Sales and marketing 682 673 1,275 1,330
Administrative 639 675 1,270 1,369
Warehousing 371 354 733 717
Total operating expenses 1,692 1,702 3,278 3,416
Operating profit (loss) (148) (154) 188 25
Other income
Investment income 24 28 53 68
Interest expense (75) (96) (170) (170)
Rental income 103 156 194 205
Other 64 (2) 67 22
Total 116 86 144 125
Earnings (loss) from continuing
operations before income taxes (32) (68) 332 150
Income taxes -- -- 50 --
Earnings (loss) from
continuing operations (32) (68) 282 150
Discontinued operations
Loss from discontinued operations,
net of $50,000 tax benefit (1,520) (238) (1,768) (278)
Net loss ($ 1,552) ($ 306) ($ 1,486) ($ 128)
Net earnings (loss) per share
Continuing operations ($ 0.04) ($ 0.09) $ 0.38 $ 0.20
Loss from discontinued operations (2.03) (0.32) (2.37) (0.37)
Net loss per common share ($ 2.07) ($ 0.41) ($ 1.99) ($ 0.17)
</TABLE>
The accompanying notes are an integral part of these statements.
Venturian Corp. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Six months ended
June 30,
1995 1994
Cash flows from operating activities:
Net loss ($1,486) ($ 128)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 286 290
Gain on sale of real estate (64) --
Discontinued operations 715 110
Change in assets and liabilities:
Accounts receivable (1,260) 1,271
Inventories 822 (857)
Restricted cash 1,448 439
Prepaid expenses 53 11
Other assets (161) (186)
Bank overdraft 52 (121)
Accounts payable (319) (577)
Advances from customers 39 (2,220)
Accrued liabilities (35) 13
Deferred compensation and
postretirement benefits 66 113
Payments on deferred compensation (79) (99)
Total adjustments 1,563 (1,813)
Net cash provided by (used in) operating activities 77 (1,941)
Cash flows from investing activities:
Purchase of property and equipment (77) (228)
Purchase of real estate -- (400)
Proceeds from sale of real estate 102 --
Payments received on notes receivable 7 7
Net cash provided by (used in) investing activities 32 (621)
Cash flows from financing activities
Payments on long-term debt (207) (105)
Proceeds from long-term debt -- 72
Proceeds from life insurance loan 117 --
Net cash used in financing activities (90) (33)
Net increase (decrease) in cash and cash equivalents 19 (2,595)
Beginning cash and cash equivalents 825 3,874
Ending cash and cash equivalents $ 844 $ 1,279
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 188 $ 190
Income taxes 8 92
The accompanying notes are an integral part of these statements.
VENTURIAN CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with the instructions in Regulation S-X pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although management believes that the
disclosures are adequate to make the information presented not misleading.
In the opinion of management, the unaudited condensed financial statements
reflect all adjustments, which consist of only normal recurring accruals,
necessary to present a fair statement of the results of operations and financial
position for the periods presented. Results of operations for the interim
periods are not necessarily indicative of results for the full year.
On July 31, 1995, the company announced that it had discontinued operations of
PC Express (see Note D). The accompanying financial statements and notes have
been restated for all periods to reflect the effects of discontinued operations.
NOTE B - INVENTORIES
Inventories are stated at the lower of cost or market, principally using the
specific identification method for Napco. Inventories consisted of the following
at June 30, 1995:
Napco $3,562,000
Venturian Software 20,000
$3,582,000
A portion of Napco's inventory is acquired when it becomes available for sale.
Napco's sales of this inventory may vary from the current period to several
years. It is the company's practice to classify this inventory, which totaled
$1,933,000 at June 30, 1995, with current assets. The company's obsolescence
policy requires that purchases of this inventory be written off if not sold
after four years. The four year period was selected after a review of customers'
historical buying patterns and is reviewed annually to determine whether the
period continues to be appropriate.
NOTE C - GOODWILL
In connection with the 1992 acquisition of PC Express, Inc., the company had
recorded goodwill based upon an analysis of the estimated benefits of the future
net income expected to be generated by PC Express. In the fourth quarter of
1994, the company recorded a $1,500,000 charge to operations to write-down
goodwill to an estimated net realizable value of $600,000. The write-down was
based on updated forecasts which showed that an impairment of goodwill had
occurred, due mainly to a decline in gross profit margins realized by PC Express
since its acquisition. Management reviews the valuation and amortization of
goodwill on an ongoing basis.
At the end of 1994, management had forecasted sales to increase by approximately
3 percent in 1995, however, factors such as problems related to the introduction
of newer complex technology over the latter half of 1994 and turnover at the
management level in early 1995 contributed to a decline in sales that continued
into the second quarter. Management had revised its sales projections downward
at the end of the first quarter based on experience during the quarter. At the
same time, management revised its forecast upwards with respect to expected
gross profit margins, also based on experience in the first quarter. Assumptions
for operating expenses used in the revised forecast did not change from the
assumptions used at year end, however management was in the process of
implementing cost reduction strategies in response to the lower level of sales.
While actual sales for the second quarter achieved forecasted levels, forecasted
gross profit margins were not realized. In addition, PC Express experienced a
significant decline in sales early in the third quarter which rendered
assumptions with respect to future sales levels unreliable. As a result,
management determined that further impairment of goodwill and remaining
intangible assets has occurred. Accordingly, a $1,012,000 charge was recorded in
the second quarter of 1995 to write-off the remaining goodwill and intangible
assets.
NOTE D - SUBSEQUENT EVENT
On July 31, 1995, the company announced that it had discontinued operations of
PC Express, due to continued losses from this operation. PC Express ceased
operations effective as of that date, and management is proceeding with an
orderly liquidation of the subsidiary, which management expects to complete
within approximately three months. Net losses of PC Express were $1,520,000 and
$1,768,000 for the three and six months ended June 30, 1995 on sales of
$5,198,000 and $10,956,000 for the same periods, respectively. In 1994, PC
Express reported a net loss of $238,000 for the second quarter on sales of
$6,244,000 and a net loss of $278,000 on sales of $13,057,000 for the six month
period. No further net losses are anticipated in 1995 in connection with the
liquidation of the subsidiary. Net liabilities of discontinued operations
reflected in the consolidated balance sheets totaled $942,000 and $227,000 as of
June 30, 1995 and December 31, 1994, respectively.
NOTE E - LINES OF CREDIT
Napco has an agreement with a bank to provide a $2,000,000 line of credit for
international transactions. The agreement requires that letters of credit be
collateralized 100 percent with a restricted cash balance. In 1994, this
agreement was amended to allow for cash advances of up to 90 percent of the cash
surrender value of certain of the company's life insurance policies. Such life
insurance policies were also assigned as collateral on the line of credit.
Advances against the line bear interest at one percent over the bank's base
rate. At June 30, 1995, approximately $1,930,000 was available for cash advances
pursuant to this agreement. There were no cash advances outstanding against this
line of credit at June 30, 1995.
Napco has additional lines of credit available for international transactions
such as letters of credit and bid, performance and advance payment guarantees on
a transaction basis for which restricted cash balances are required. Letters of
credit issued by financial institutions under all lines of credit totaled
$655,000 as of June 30, 1995, and are collateralized by a restricted cash
balance.
In 1994, PC Express established an agreement with a bank to provide the company
with a $1,500,000 line of credit, which was due May 1, 1995. As of December 31,
1994, PC Express was not in compliance with certain covenants pursuant to the
line of credit and the bank did not waive the violations. Effective March 31,
1995, PC Express refinanced advances under the line of credit through a
subsidiary of its former lender, which provided for advances of up to $2,000,000
based upon levels of eligible accounts receivable. Advances under the agreement
are collateralized by substantially all of the assets of PC Express, are payable
on demand and bear interest at the bank's reference rate plus five percent. At
June 30, 1995, outstanding advances on the line of credit totaled $1,407,000.
Management expects that the proceeds of the liquidation of PC Express will be
sufficient to repay amounts outstanding under the line of credit.
NOTE F - CONTINGENCIES
At June 30, 1995, the company had performance and advance payment guarantees
outstanding on various sales contracts totaling $1,120,000. These guarantees
were backed by insurance bonds, which do not require cash collateral.
The company has guaranteed certain indebtedness of Mass Merchandisers, Inc., a
former affiliate of Venturian Corp. At June 30, 1995, this indebtedness was
$662,000. This indebtedness is secured by a first mortgage lien against certain
real estate owned and operated by Mass Merchandisers, Inc., a wholly-owned
subsidiary of McKesson Corp.
The company also owns rental real estate that contains industrial contaminants
and must be remediated. In February 1995, a Phase II Investigation Report and
remedial alternatives were submitted for approval to the Minnesota Pollution
Control Agency (MPCA). In connection with the report, management retained a
consultant to prepare cost estimates with respect to remediation of the
property. Two remedial alternatives were prepared and the range of associated
costs were estimated based on each alternative. The first alternative, which
includes groundwater monitoring and soil remediation, is considered to be the
most likely alternative by the consultant. This alternative includes remediation
efforts over a period of five years and has a range of estimated costs from
$332,000 to $1,257,000. Within this range, the consultant believes approximately
$600,000 represents the most likely cost of remediation. The second alternative
includes costs associated with groundwater extraction and treatment along with
groundwater monitoring and soil remediation. This alternative includes
remediation efforts over a period of five years and has a range of estimated
costs from $625,000 to $1,709,000. The cost estimates are contingent upon MPCA
approval of the remedial alternatives or unforeseen circumstances which could
affect the technologies implemented or the magnitude of the remediation
required.
Estimated remediation costs include capital costs associated with the remedial
activity as well as annual costs over a period of five years. Annual costs
included in the previous cost estimates were calculated using a ten percent
discount rate. Not discounted, the estimated cost of remediation has a range
from $348,000 to $1,290,000 under the first alternative and a range of $695,000
to $1,824,000 under the second alternative. The company accrued approximately
$600,000 for estimated costs of remediation at the time the property was
acquired in March 1994. At June 30, 1995, a liability of approximately $523,000
for remediation costs is included under the caption "Rental real estate mortgage
and related costs" as a current liability.
Because a remediation plan has not been agreed to, management cannot reasonably
estimate the timing of expected payments towards the cost of remediation.
However, depending on the final remediation options approved by the MPCA, the
remediation could commence in the Fall of 1995 and, with the exception of annual
cost items, be completed during the year.
The company is involved in an environmental investigation related to its former
office headquarters location. Management has retained a consultant to determine
what, if any, remedial action is required at this site. Based upon a 1993 study,
the consultant has recommended that no further investigation or remediation at
the site is needed. This recommendation is subject to the approval of the MPCA
property transfer unit. Management believes that the ultimate liability to be
incurred as a result of this investigation, if any, will not have a material
adverse effect on the company's financial position or results of operations.
NOTE G - NET EARNINGS (LOSS) PER SHARE
Net earnings (loss) per common share is computed based on the weighted average
outstanding common shares and common share equivalents, when dilutive. Weighted
average shares outstanding were 747,789 for the three and six months ended June
30, 1995 and 1994, respectively.
NOTE H - RECLASSIFICATIONS
Certain reclassifications have been made to the 1994 financial statements to
conform with the 1995 presentation.
VENTURIAN CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION
June 30, 1995
Prior to June 30, 1995, the company's consolidated condensed financial
statements included the results of PC Express, Inc. On July 31, 1995, the
company announced that it had discontinued operations of PC Express. The results
of operations for PC Express are reflected as discontinued operations in the
consolidated condensed financial statements (see Discontinued Operations).
RESULTS OF OPERATIONS
Net Sales
Consolidated net sales were $5,470,000 for the second quarter of 1995, compared
with $5,565,000 in the second quarter of 1994. For the first six months of the
year, consolidated net sales were $11,288,000, down 9.8 percent from $12,518,000
for the same period a year ago.
Napco sales of $5,239,000 in this year's second quarter declined slightly from
$5,521,000 in the second quarter of 1994. Management had expected lower sales in
1995 based on the level of backlog at the start of the year, which generally
provides a good indication of future sales.
Napco's backlog was $15,025,000 at the beginning of 1995, compared with a
beginning backlog of $19,916,000 at the beginning of 1994. Backlog at June 30,
1995 was $12,891,000. However, in July 1995, Napco booked orders that totaled
approximately $7.5 million. These new order bookings could favorably affect
sales, in particular during the fourth quarter of 1995.
Napco sales were $10,915,000 for the six months ended June 30, 1995, compared
with $12,413,000 for the same period in 1994.
Venturian Software sales were strong in the second quarter of 1995, increasing
to $247,000 compared with $68,000 for the quarter ended June 30, 1994.
Year-to-date sales also are ahead of last year's levels, totaling $397,000 for
the first six months of 1995 compared with $139,000 for the first six months a
year ago. Management had expected sales to increase over prior year levels due
to Venturian Software's designation as a Value-Added Dealer of MagicTM products
and to the addition of MulticallTM to the company's product line.
Costs and Expenses
Cost of products sold was 71.8 percent of net sales in the second quarter of
1995 compared with 72.2 percent of net sales for the same period last year.
Year-to-date, cost of products sold was 69.3 percent of net sales for the six
month period compared with 72.5 percent a year ago.
Cost of products sold for Napco sales was 74.0 percent of net sales in the
second quarter of 1995 compared with 72.6 percent a year ago. Second quarter
sales in 1995 included a larger proportion of sales to the U.S. Government than
a year ago, contributing to the increase in cost of products sold as these sales
typically are at a lower profit margin than sales to non-government customers.
Cost of products sold for Napco sales was 71.0 percent and 72.9 percent of net
sales for the six months ended June 30, 1995 and 1994, respectively.
Venturian Software cost of products sold was 8.7 percent of net sales in the
second quarter of 1995 compared with 14.7 percent for the same period last year.
Year-to-date, cost of products sold for Venturian Software sales was 17.4
percent of net sales, compared with 21.6 percent of net sales last year.
Venturian Software cost of products sold is low because a significant portion of
its revenues are generated by consulting services, which do not have an
associated product cost.
Consolidated operating expenses totaled $1,692,000 for the second quarter of
1995, compared with operating expenses of $1,702,000 for the same period a year
ago. For the six months, consolidated operating expenses were $3,278,000 and
$3,416,000 in 1995 and 1994, respectively.
Napco operating expenses totaled $1,367,000 for the second quarter of 1995,
compared with $1,482,000 for the same period last year. Operating expenses were
down, primarily in the administrative area, due to cost containment efforts.
Year-to-date, Napco operating expenses totaled $2,715,000 and $3,009,000 for the
six months ended June 30, 1995 and 1994, respectively.
Operating expenses for Venturian Software were $178,000 in the second quarter of
1995, up significantly from $87,000 for the same period a year ago. Venturian
Software operating expenses also increased for the comparable six month periods,
totaling $333,000 in 1995 compared with $179,000 in 1994. Expenses increased due
to the addition of programming staff and to the addition of marketing personnel
for the introduction of the Multicall product.
Corporate overhead expenses were $163,000 in the second quarter of 1995 compared
with $157,000 for the same period last year. Year-to-date corporate overhead was
$254,000 in 1995 and $262,000 in 1994.
Operating Profit (Loss)
Napco reported an operating loss of $3,000 for the quarter ended June 30, 1995
on sales of $5,239,000. Year-to-date, Napco reported an operating profit of
$447,000 on sales of $10,915,000. Last year, Napco reported an operating profit
of $32,000 for the second quarter and a year-to-date operating profit of
$357,000.
Venturian Software reported an operating profit of $18,000 in the second quarter
of 1995, reducing its year-to-date operating loss to $5,000 for the six month
period. A year ago, Venturian Software reported operating losses of $29,000 and
$70,000 for the three and six months periods, respectively.
Other Income (Expense)
Other income (expense) included rental income, net of expenses, of $103,000 and
$156,000 for the second quarters of 1995 and 1994, respectively, and $194,000
and $205,000 year-to-date in 1995 and 1994, respectively. This income was
derived from the acquisition of rental real estate in March 1994 (see Note F).
Income Taxes
The company has recorded income tax expense of $50,000 for the six months ended
June 30, 1995 relating to continuing operations. This tax expense, attributable
to alternative minimum tax, has been fully offset by a tax benefit relating to
discontinued operations.
The company did not record tax expense for the three and six month periods ended
June 30, 1994 because the company had net operating loss carryforwards
sufficient to offset the current tax expense.
Discontinued Operations
On July 31, 1995, the company announced that it had discontinued operations of
PC Express, due to continued losses from this operation. PC Express ceased
operations effective as of that date, and management is proceeding with an
orderly liquidation of the subsidiary, which management expects to complete
within approximately three months. Net losses of PC Express were $1,520,000 and
$1,768,000 for the three and six months ended June 30, 1995 on sales of
$5,198,000 and $10,956,000 for the same periods, respectively. In 1994, PC
Express reported a net loss of $238,000 for the second quarter on sales of
$6,244,000 and a net loss of $278,000 on sales of $13,057,000 for the six month
period. No further net losses are anticipated in 1995 in connection with the
liquidation of the subsidiary. Net liabilities of discontinued operations
reflected in the consolidated balance sheets totaled $942,000 and $227,000 as of
June 30, 1995 and December 31, 1994, respectively.
Prior to the decision to discontinue the operations of PC Express, management
reviewed the valuation and amortization of goodwill on an ongoing basis based
upon an analysis of the estimated benefits of the future net income expected to
be generated by PC Express. In the fourth quarter of 1994, the company recorded
a $1,500,000 charge to operations to write-down goodwill to an estimated net
realizable value of $600,000. The write-down was based on updated forecasts
which showed that an impairment of goodwill had occurred, due mainly to a
decline in gross profit margins realized by PC Express since its acquisition.
At the end of 1994, management forecasted sales to increase by approximately
3 percent in 1995, however, factors such as problems related to the introduction
of newer complex technology over the latter half of 1994 and turnover at the
management level in early 1995 contributed to a decline in sales that continued
into the second quarter. Management revised its sales projections downward
at the end of the first quarter based on experience during the quarter. At the
same time, management revised its forecast upwards with respect to expected
gross profit margins, also based on experience in the first quarter. Assumptions
for operating expenses used in the revised forecast did not change from the
assumptions used at year end, however management was in the process of
implementing cost reduction strategies in response to the lower level of sales.
While actual sales for the second quarter achieved forecasted levels, forecasted
gross profit margins were not realized. In addition, PC Express experienced a
significant decline in sales early in the third quarter which rendered
assumptions with respect to future sales levels unreliable. As a result,
management determined that further impairment of goodwill and remaining
intangible assets has occurred. Accordingly, a $1,012,000 charge was recorded in
the second quarter of 1995 to write-off the remaining goodwill and intangible
assets.
FINANCIAL CONDITION
Liquidity and Capital Resources - Current assets totaled $12,748,000 and
exceeded current liabilities by $6,563,000 at June 30, 1995. The current ratio
was 2.1 to one at the end of the second quarter, compared with 2.4 to one at
December 31, 1994. Cash and cash equivalents of $844,000 at June 30, 1995 were
essentially unchanged compared with December 31, 1994.
Napco has an agreement with a bank to provide a $2,000,000 line of credit for
international transactions provided that letters of credit be collateralized 100
percent with a restricted cash balance. In 1994, this agreement was amended to
allow for cash advances of up to 90 percent of the cash surrender value of
certain of the company's life insurance policies. Such life insurance policies
were also assigned as collateral on the line of credit. Advances against the
line bear interest at one percent over the bank's base rate. At June 30, 1995,
approximately $1,930,000 was available for cash advances pursuant to this
agreement. There were no cash advances outstanding on this line of credit at
June 30, 1995.
Napco has additional lines of credit available for international letters of
credit and bid and performance guarantees on a transaction basis for which
restricted cash balances are be required. Letters of credit issued by financial
institutions under all lines of credit totaled $655,000 at June 30, 1995 and are
collateralized by a restricted cash balance.
In 1994, PC Express established an agreement with a bank to provide the company
with a $1,500,000 line of credit, which was due May 1, 1995. As of December 31,
1994, PC Express was not in compliance with certain covenants pursuant to the
line of credit and the bank did not waive the violations. Effective March 31,
1995, PC Express refinanced advances under the line of credit through a
subsidiary of its former lender, which provided for advances of up to $2,000,000
based upon levels of eligible accounts receivable. Advances under the agreement
are collateralized by substantially all of the assets of PC Express, are payable
on demand and bear interest at the bank's reference rate plus five percent.
Advances under the line of credit totaled $1,407,000 at June 30, 1995.
Management expects that the proceeds of the liquidation of PC Express will be
sufficient to repay amounts outstanding under the line of credit.
Management believes that its present cash reserves should be sufficient to fund
its operations and to collateralize all international transactions as required.
Management has been successful in obtaining insurance bonds with no collateral
requirements for certain of its international transactions rather than utilizing
its traditional bank lines of credit. The company has additional sources of
funds in the form of borrowing against life insurance policies or other
non-current assets.
VENTURIAN CORP. AND SUBSIDIARIES
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit 27. Financial Data Schedule (for SEC use only)
b) No report on Form 8-K was filed during the quarter for which this
report is filed.
In a report on Form 8-K dated July 31, 1995, the company reported that,
effective July 31, 1995, it had discontinued operations of its subsidiary, PC
Express, Inc., due to continued losses from operations.
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, thereunto duly authorized.
VENTURIAN CORP.
(Registrant)
By: /s/ Mary F. Jensen
Mary F. Jensen
Chief Financial Officer
Date: August 14, 1995
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 844
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<ALLOWANCES> 175
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<NET-INCOME> (1,486)
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</TABLE>
