U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Amendment No. 1)
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
[ ] 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: 1-9083
POLYPHASE CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 23-2708876
(State or other jurisdiction
of (I.R.S. Employer
incorporation Identification Number)
or organization)
16885 Dallas Parkway, Suite 400
Dallas, Texas 75248
(Address of principal executive offices)
(214) 732-0010
(Registrants'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 Exchange Act during the past 12 months ( or for such shorter
period 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 the number of shares outstanding of each of
the issuer's classes of common stock, as of the latest
practicable date.
Common Stock, $.01 par value
13,121,966
Outstanding at February 13, 1996
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
Revenues for the three months ended December 31, 1995 increased
$24,886,000 (197%) to $37,497,000 from $12,611,000 during the
three months ended December 31, 1994. Operating income also
increased $2,078,000 (236%) over the comparable period, primarily
attributable to the inclusion of the operations of Overhill
Farms, Inc which were acquired by the Company in May 1995.
Net income for the three months ended December 31, 1995 increased
$186,000 (32%) to $760,000 from $574,000 during the three months
ended December 31, 1994. Net income while up substantially from
the comparable prior year period was effected by increased
interest expense from the acquisition of Overhill Farms and the
reduction of tax benefits available during the period. The
Company is currently reviewing several alternatives to increase
earnings by refinancing existing debt, streamlining operations,
and continuing its program of strategic acquisitions.
The Food Group's revenues and operating income for the three
month's ended December 31, 1995 were $22,571,000 and $1,929,000,
respectively. Since the food operations were acquired during
fiscal 1995, no comparative amounts are available for the prior
year. As compared to the prior quarter, revenues were down
approximately $1,250,000, primarily due to lower sales to the
airline and restaurant industries. Management expects these
revenues to be restored to historical levels.
Revenues for the Forestry Group for the three months ended
December 31, 1995 increased $2,782,000 (35 %) to $10,814,000 from
$8,032,000 for the three months ended December 31, 1994.
Operating income for the comparable period also increased
$292,000 or 30 %. The increases in revenue and operating income
were primarily due to the strong demand for lumber and favorable
weather conditions in Eastern Texas during the fiscal 1996
period. Consequently, logging companies have upgraded or
purchased new equipment to satisfy the lumber mills' demand.
Management expects the demand to stabilize over the remainder of
the fiscal year as the mills begin to fulfill their timber
requirements.
During fiscal 1996 management combined the Computer Group and
Transformer Group in order to achieve operating efficiencies
through potential purchasing economies and management
supervision. During the three months ended December 31, 1995
revenues for the Computer and Electronics Group decreased
$467,000 (10%) to $4,112,000 from $4,579,000 for the three months
ended December 31, 1994. Operating income also decreased to a
loss for the comparable period. The decreases are primarily
CORPDAL:47492.2 20702-00012 -1-
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attributable to increased competition and lower gross profit
margins. Management has taken steps to increase marketing and
offer expanded services to computer customers as well as begin
identifying additional markets for transformers and electronic
filters.
Liquidity and Capital Resources
During the three months ended December 31, 1995, the Company
generated cash of approximately $ 2,261,000 in its operating
activities compared to a use of cash in the amount of $1,341,000
during the comparable period in fiscal 1995. The cash was
provided primarily from increases in depreciation and
amortization expenses associated with the acquisition of Overhill
Farms and decreases in trade receivables at TTI. This was
partially offset by to increased inventories, primarily at TTI,
during the period.
During the three months ended December 31, 1995, the Company's
investing activities used cash of approximately $2,887,000
compared to a use of cash in the amount of $1,620,000 in fiscal
1995. The Company's use of cash consisted primarily of advances
with Mr. Tanner in the amount of $2,000,000 and advances to the
Pyrenees Group of approximately $1,514,000.
During the three months ended December 31, 1995 the Company's
financing activities used cash of approximately $1,698,000 as
compared to $2,429,000 of cash provided in the comparable period
in fiscal 1995. During the period the Company placed $2,500,000
of Series A-3 Preferred Stock and sold an additional
$1,500,000 of 12% convertible debentures. The funds from these
transactions were used, in part, in the repayment of advances of
$1,153,000 from related parties in connection with the
acquisition of Overhill Farms and prepaying approximately
$750,000 on existing Overhill term loans.
The Company plans to continue its program of expansion and
diversification through the acquisition of additional operating
companies. Funding for these acquisitions is anticipated to come
from a combination of internally generated funds, proceeds from
the exercise of options, the issuance of shares of preferred
stock and from additional borrowings. The Company's management
believes that cash generated from operations, together with
available lines of credit and contemplated debt and/or equity
placements, will be sufficient to meet the Company's liquidity
requirements for the next 12 months.
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SIGNATURE
In accordance with the requirements of the Exchange Act, the
registrant caused this amended report to be signed on its behalf
by the undersigned, thereunto duly authorized.
POLYPHASE CORPORATION
(Registrant)
Date: May 6, 1996 By: /s/ Paul A. Tanner
Paul A. Tanner
President and
Chief Executive Officer
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SIGNATURE
In accordance with the requirements of the Exchange Act, the
registrant caused this amended report to be signed on its behalf
by the undersigned, thereunto duly authorized.
POLYPHASE CORPORATION
(Registrant)
Date: May 6, 1996 By:
Paul A. Tanner
President and Chief
Executive Officer
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