<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] 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 or organization) Identification No.)
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 No X
------------ -----------
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 13,644,109
---------------------------
Outstanding at June 5, 1997
<PAGE>
POLYPHASE CORPORATION
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
PART I. FINANCIAL INFORMATION Page No.
- ----------------------------- --------
Item 1. Financial Statements
Consolidated Condensed Balance Sheets as of
March 31, 1997 and September 30, 1996 2
Consolidated Condensed Statements of
Operations for the Three Months Ended
March 31, 1997 and 1996 4
Consolidated Condensed Statements of
Operations for the Six Months Ended
March 31, 1997 and 1996 5
Consolidated Condensed Statements of
Cash Flows for the Six Months Ended
March 31, 1997 and 1996 6
Notes to Consolidated Condensed Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
Signature Page 14
-1-
<PAGE>
POLYPHASE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
March 31, September 30,
----------- ------------
1997 1996
----------- -----------
Current assets:
<S> <C> <C>
Cash $ 1,563,874 $ 280,969
Receivables, net of allowance for doubtful accounts
of $510,808 and $519,104
Trade accounts 10,287,324 12,098,852
Current portion of sales contracts 6,467,619 6,625,727
Notes receivable 821,739 972,422
Receivables from related parties 427,081 367,634
Inventories 26,721,117 28,027,779
Prepaid expenses and other 2,494,958 2,676,336
----------- -----------
Total current assets 48,783,712 51,049,719
----------- -----------
Property and equipment:
Land 765,000 765,000
Buildings and improvements 4,701,041 4,279,917
Machinery, equipment and other 8,595,559 8,575,687
----------- -----------
14,061,600 13,620,604
Less-Accumulated depreciation 5,047,639 4,212,872
----------- -----------
9,013,961 9,407,732
----------- -----------
Other assets:
Noncurrent receivables
Sales contracts 1,324,692 1,333,150
Notes receivable 951,433 1,037,890
Related parties, net allowance of $3,340,000 14,698,032 9,931,054
Excess of cost over fair value of net assets of businesses
acquired, net of accumulated amortization of $1,940,199
and $1,557,165 14,634,929 15,041,574
Other intangible assets 2,081,727 1,402,239
Restricted cash 796,121 882,383
Other 4,144,309 4,092,780
----------- -----------
38,631,243 33,721,070
----------- -----------
$96,428,916 $94,178,521
=========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-2-
<PAGE>
POLYPHASE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, September 30,
----------- ------------
1997 1996
----------- -----------
Current liabilities:
<S> <C> <C>
Notes payable $10,805,495 $ 9,516,219
Accounts payable 7,324,254 8,581,071
Accrued expenses and other 2,928,802 4,415,011
Current maturities of long-term debt 33,285,652 31,573,716
----------- -----------
Total current liabilities 54,344,203 54,086,017
Note payable and accrued interest to related party 13,163,916 12,546,600
Reserve for credit guarantees 796,121 882,383
Deferred income taxes 1,475,897 1,475,897
----------- -----------
Total liabilities 69,780,137 68,990,897
----------- -----------
Warrants to purchase common stock
in subsidiary 1,408,744 1,189,224
Stockholders' equity:
Preferred stock, $.01 par value, authorized
50,000,000 shares, issued and outstanding 125,000
and 250,000 shares, respectively 1,250 2,500
Common stock, $.01 par value, authorized
100,000,000 shares, issued and outstanding
13,664,109 and 13,196,966 shares, respectively 136,641 131,970
Paid-in capital 27,839,392 26,630,714
Accumulated deficit (1,761,933) (1,487,695)
Notes receivable (975,315) (1,279,089)
----------- -----------
Total stockholders' equity 25,240,035 23,998,400
----------- -----------
$96,428,916 $94,178,521
=========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-3-
<PAGE>
POLYPHASE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
Net revenues $38,409,223 $37,749,771
Cost of sales 32,623,184 29,044,520
----------- -----------
Gross profit 5,786,039 8,705,251
Selling, general and administrative
expenses 3,811,186 5,759,733
----------- -----------
Operating income 1,974,853 2,945,518
----------- -----------
Other income (expenses):
Interest expense (1,839,932) (1,570,285)
Interest income and other (115,857) 385,844
----------- -----------
Total other income (expenses) (1,955,789) (1,184,441)
----------- -----------
Income before income taxes and
warrant accretion 19,064 1,761,077
Income taxes 41,418 643,165
----------- -----------
(22,354) 1,117,912
Accretion of common stock purchase warrants
of subsidiary 109,647 99,911
----------- -----------
Net income (loss) (132,001) 1,018,001
Dividends on preferred stock (37,500) (37,500)
----------- -----------
Net income (loss) attributable to common
stockholders $ (169,501) $ 980,501
=========== ===========
Weighted average common and common
equivalent shares 13,664,109 13,974,294
=========== ===========
Net income (loss) per common share $ (.01) $ .07
=========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-4-
<PAGE>
POLYPHASE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months Ended
March 31,
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
Net revenues $74,575,012 $75,247,061
Cost of sales 62,680,099 58,963,580
----------- -----------
Gross profit 11,894,913 16,283,481
Selling, general and administrative
expenses 8,434,856 10,382,323
----------- -----------
Operating income 3,460,057 5,901,158
----------- -----------
Other income (expenses):
Interest expense (3,414,350) (3,144,021)
Interest income and other 95,103 485,540
----------- -----------
Total other income (expenses) (3,319,247) (2,658,481)
----------- -----------
Income before income taxes
and warrant accretion 140,810 3,242,677
Income taxes 120,528 1,169,805
----------- -----------
20,282 2,072,872
Accretion of common stock purchase
warrants of subsidiary 219,520 257,575
----------- -----------
Net income (loss) (199,238) 1,815,297
Dividends on preferred stock (75,000) (75,000)
----------- -----------
Net income (loss) attributable to
common stockholders $ (274,238) $ 1,740,297
=========== ===========
Weighted average common and common
equivalent shares 13,600,432 13,779,389
=========== ===========
Net income (loss) per common share $ (.02) $ .13
=========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-5-
<PAGE>
POLYPHASE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months Ended
March 31,
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
Cash flow provided by (used in)
operating activities:
Net income (loss) $ (199,238) $ 1,815,297
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 1,534,924 1,514,505
Provision for doubtful accounts (8,296) (5,770)
Accretion of warrants to purchase
common stock of subsidiary 219,520 257,575
(Increase) decrease in, net of effects of
acquisitions:
Accounts and sales contracts receivable 1,986,390 2,535,939
Inventories 1,306,662 (4,847,849)
Prepaid expenses and other 129,849 661,209
Increase (decrease) in, net of effects of
acquisitions:
Accounts payable (1,256,817) 125,309
Accrued expenses and other (1,486,209) 887,822
----------- -----------
Net cash provided by (used in)
operating activities 2,226,785 2,944,037
----------- -----------
Cash flows provided by (used in) investing
activities:
Notes and other receivables 237,140 (168,149)
Receivables from related parties (4,826,425) (4,766,022)
Capital expenditures (440,996) (372,048)
Other intangibles (973,000) -
----------- -----------
Net cash used in
investing activities (6,003,281) (5,306,219)
----------- -----------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-6-
<PAGE>
POLYPHASE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months Ended
March 31,
--------------------------
1997 1996
----------- -----------
Cash flows provided by (used in) financing activities:
<S> <C> <C>
Borrowings (principal payments) under line of
credit arrangements, notes payable and
long-term debt, net $3,618,528 $(2,917,542)
Proceeds from the issuance of 12%
subordinated debentures - 1,500,000
Advances from (payments to) related parties - (1,153,000)
Principal collections on Pyrenees note receivable 303,774 379,231
Exercise of common stock options 1,229,599 12,500
Dividends on preferred stock (75,000) (75,000)
Common stock issuance costs (17,500) (17,642)
Proceeds from private placement of
preferred stock - 2,500,000
---------- -----------
Net cash provided by
financing activities 5,059,401 228,547
---------- -----------
Net increase (decrease) in cash 1,282,905 (2,133,635)
Cash - beginning of period 280,969 3,275,068
---------- -----------
Cash - end of period $1,563,874 $ 1,141,433
========== ===========
Supplemental schedule of cash flow information:
Cash paid during the period for :
Interest $2,643,554 $ 2,220,593
Income taxes $1,311,055 $ 189,536
</TABLE>
Supplemental schedule of noncash investing and financing activities:
In October 1996, an unrelated third party exercised an option to purchase
357,143 shares of common stock. As consideration, the Company received 125,000
shares of Series A-3 Preferred Stock having a redemption value of $1,250,000.
The accompanying notes are an integral part
of these consolidated financial statements.
-7-
<PAGE>
POLYPHASE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
1. NATURE OF BUSINESS
The Company is a diversified holding company that, through its subsidiaries,
operates in three industry segments: the forestry segment, which distributes,
leases and provides financing for commercial and industrial timber and logging
equipment; the transformer segment, which manufactures and markets electronic
transformers, inductors and filters; and the food processing segment, which
produces high quality entrees, plated meals, soups, sauces and poultry, meat
and fish specialties.
2. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. All material intercompany accounts and
transactions are eliminated.
The financial statements included herein have been prepared by the Company,
without an audit, 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. The Company believes that the disclosures are
adequate to make the information presented not misleading. The information
presented 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 when read in conjunction with the
financial statements and the notes thereto included in the Company's latest
financial statements filed as part of Form 10-K.
3. LIQUIDITY
The Company has not complied with certain covenants involving most of its loan
agreements, including covenants that restrict transactions with affiliates and
which require the filing of audited financial statements for the Company and
its subsidiaries on a timely basis. (See Note 5) As a result, the Company's
debt has been classified as current as of March 31, 1997.
The Company is in the process of negotiating a transaction involving Overhill
that the Company expects will resolve the Rice lawsuit and improve the
Company's overall debt structure, but there can be no assurances that such
transaction will be consummated. Upon completion of the transaction, the
Company believes it will be able to negotiate with the remaining debt holders
and obtain waivers to the covenant violations that exist. As such, the
Company expects that it will be able to meet its liquidity requirements.
-8-
<PAGE>
4. RELATED PARTY TRANSACTIONS
During January 1996, the Company reached an agreement in principle to manage a
project to develop and build a multi-purpose sports facility in Las Vegas,
Nevada. The project is being developed by PLY Stadium Partners, Inc.
("Stadium Partners"), a private investment firm headed by Mr. Paul A. Tanner,
Chairman and Chief Executive Officer of the Company. As part of the
transaction, the Company is also to participate in the facility's management,
sales of suites and seat options, concessions and events and is to be
compensated for such services. The Company has provided $4 million of debt,
bearing interest at 12%, to Stadium Partners. The debt is (1) convertible
into a 14% economic interest in the project and (2) is guaranteed by Mr.
Tanner and Pyrenees, a private investment firm headed by Mr. Tanner.
On November 15, 1996, Stadium Partners, through a newly-formed partnership,
purchased 62 acres in Las Vegas for the development of the stadium and
adjacent convention facility. Financing was provided by Lehman Brothers
Holdings, Inc. ("Lehman") through a partnership, Nevada Stadium Partners
Limited Partnership ("Nevada Partnership") with Lehman as the lender receiving
an equity interest in the project.
The Company has guaranteed the repayment of the loan from Lehman to the
partnership in the above mentioned transaction, upon the occurrence of certain
events. Such guarantee is effective upon the occurrence of certain
conditions, including without limitation if the Partnership files for
bankruptcy or insolvency, if representation by the Partnership proves to be
fraudulent regarding the financial condition of the Borrower, the land
securing the loan is further encumbered or ownership transferred without the
consent of Lehman.
In January 1997, the Company further advanced Stadium Partners $4.9 million.
The funds advanced consisted of $2.5 million, drawn from an existing line of
credit, and $2.4 million from a six month term note. The term note bears
interest at 16%, is payable monthly and is secured by a second lien on the
Company's headquarters. As additional collateral, the Company agreed to
issue an option on 500,000 shares of Series A-2 preferred stock (convertible
into 1,000,000 shares of common stock) which is exercisable upon default of
certain covenants of the agreement.
In connection with the aforementioned transaction, the Company entered into a
two year consulting agreement with a principal of the lender. In
consideration of the agreement, the Company issued an option to purchase
200,000 shares of common stock at $.01 per share.
During the twelve months ended September 30, 1996, the Company accrued
management and service revenues of $2,550,000 and interest income of $790,000
related to the Company's activities with Stadium Partners, the collectibility
of which is dependent upon the success of the project and/or the guarantees
referred to above. As a result of the financing described above Stadium
Partners is precluded from making any distributions until permanent project
financing is secured. As a consequence of Stadium Partners inability to make
its payment to the Company due March 15,1997, the Company established a
reserve of $3.34 million as of September 30, 1996, which represents the income
accrued. The reserve will be reduced as collections and distributions are made
pursuant to the Stadium Partners loan agreements. The Company no longer
accrues management fees or interest income on the existing advances.
-9-
<PAGE>
As of March 31, 1997, the Company had net additional advances to Stadium
Partners of $4,826,425, which is subject to the above guarantees, and are
currently due and payable.
During the six months ended March 31, 1997, the Company made advances to
Mr. Tanner totalling $70,300 resulting in a balance due of $85,160 as of
that date.
In connection with the TTI acquisition, the Company also issued a non-
interest bearing note to Harold Estes for $10,000,000 due October 31, 1994,
on which the Company imputed interest at 8.0% per annum. The Company has
since modified, extended and renewed the note whereby the note currently
having a balance including accrued interest of $13,163,916 has been extended
to December 1, 1997 bearing interest at 10% through June 30, 1997 and 16%
thereafter. The Company anticipates that it will be required to refinance
this note payable on a long-term basis and is presently in negotiations with
potential lenders to accomplish their goal. There is no certainty that
Company will be able to refinance this note on acceptable terms or at all, by
December 1, 1997. The note holder has no recourse to any of the assets or
capital stock of Polyphase Corporation or any of its other subsidiaries and
no cross-default provisions exist between this note and any other Polyphase
debt.
5. CONTINGENCIES
In January 1997, a suit was filed in District Court of Dallas County against
the Company by Rice Partners II, L.P., subordinated debt holders of the
Overhill Farms subsidiary. The suit claims, among other things, that the
Company breached covenants of the subordinated debt agreement and refused to
cure the defaults within a reasonable period of time. The Company has filed a
counter suit claiming Rice Partners II, L.P. (i) refused to comply with
verbal agreements to the indenture (ii) conspired with the former general
partner of Overhill to force the Company to sell Overhill Farms at a
distressed price in order to benefit Rice Partners II, L.P. and (iii) caused
the halting of trading of the Company's stock.
6. STOCKHOLDERS' EQUITY
In October 1996 a director of the Company exercised options on 75,000 of
common stock at $.75 per share.
In October 1996 an associate of the holders of the Company's Series A-3
Preferred Stock tendered 125,000 shares of preferred stock as consideration
for the exercise of options on 357,143 shares of common stock at $3.50 per
share.
In November 1996 a former executive of the Company exercised options on
35,000 of common stock at $.01 per share. Such options were granted in
consideration for a consulting contract and were valued at $200,000.
-10-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Statements contained in this Form 10-Q that are not historical facts,
including, but not limited to, the projections contained herein, are forward-
looking statements and involve a number of risks and uncertainties. The actual
results of the future events described in such forward-looking statements in
this Form 10-Q could differ materially from those stated in such forward-looking
statements. Among the factors that could cause actual results to differ
materially are: adverse economic conditions, industry competition and other
competitive factors, government regulation and possible future litigation.
RESULTS OF OPERATIONS
Revenues for the six months ended March 31, 1997 decreased $672,000 (1%) to
$74,575,000 from $75,247,000 during the six months ended March 31, 1996. The
decrease in revenue is primarily attributable to the exclusion of the Computer
Group in fiscal 1997 offset by higher revenues in the Timber Group. Operating
income also decreased $2,441,000 (41%) from the comparable period due to
significantly lower gross margins at the Food and Timber Groups.
Net income for the six months ended March 31, 1997 decreased $2,014,000 (111%)
to a loss of $199,000 from net income of $1,815,000 during the six months ended
March 31, 1996. Net income was adversely affected by lower gross margins and
higher operating and interest expense.
The Food Group's revenues increased slightly to $48,732,000 for the six months
ended March 31, 1997 as compared to $47,738,000 for the six months ended March
31, 1996. Operating income decreased $861,000 (25%) to $2,561,000, from
$3,428,000 in the comparable period. Revenues have remained flat primarily due
to slower than anticipated growth in the new business segments of food service
products and Overhill branded items due to the competitive environment. The
slower growth in new segments coupled with mature market of the weight loss and
airline segments have forced gross margins to decrease approximately 2% from the
past year.
Revenues for the Timber Group for the six months ended March 31, 1997 increased
$6,601,000 (38%) to $24,080,000 from $17,479,000 for the six months ended March
31, 1996. Operating income for the comparable period decreased $497,000 (26%) to
$1,412,000 for the six months ended March 31, 1997 from $1,909,000 for the six
months ended March 31, 1996. Increased revenues were primarily due to increased
demand for new equipment in East Texas as the lumber prices stabilized in fiscal
1997 and large operators made capital expenditures. Profit margins decreased
significantly in fiscal 1997 due to a higher percentage of sales in new units
which carries lower profit margins. In the comparable period of 1996 a slowdown
in the timber market resulted in decreased sales of new units and increased
sales of higher margined used units or refurbishment of existing units.
Management expects sales to continue to grow with the lower profit margins in
fiscal 1997.
Revenues in the Transformer Group for the six months ended March 31, 1997
decreased $77,000 to $1,763,000 from $1,840,000 for the comparable period in
fiscal 1996. Operating income also decreased to $43,000 for the six months
ended March 31, 1997 from $71,000 for the comparable period in fiscal 1997.
The decreases are primarily attributable to the competitive market and the lower
profit margins on government contracts.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended March 31, 1997, the Company's operating activities
provided cash of approximately $2,227,000 compared to $2,944,000 of cash
provided in the comparable period of fiscal 1996. The decrease from the
comparable period of cash provided by operating activities were primarily due
from the net loss, and large decreases in accounts payable and accruals. These
were offset by decreases in accounts receivable and inventories in the Food
Group subsidiary.
-11-
<PAGE>
During the six months ended March 31, 1997, the Company's investing activities
used cash of approximately $6,003,000 compared to a use of cash in the amount of
$5,306,000 during the comparable period in fiscal 1996. The Company's use of
cash consisted primarily of advances to PLY Stadium Partners a company
affiliated with Mr. Paul A. Tanner, the Company's Chairman of the Board,
President and Chief Executive Officer.
During the six months ended March 31, 1997, the Company's financing activities
provided cash of approximately $5,059,000 as compared to $229,000 of cash
provided in the comparable period in fiscal 1996. During the period the Company
borrowed approximately $4.9 million consisting of $2.4 million from an existing
line of credit and $2.5 million from a six month term note. The term note
bears interest at 16%, is payable monthly and is secured by a second lien on the
Company's headquarters. As additional collateral, the Company agreed to issue
an option on 500,000 shares of Series A-2 preferred stock (convertible into
1,000,000 shares of common stock) which is exercisable upon default of certain
covenants of the agreement. The funds from these transactions were used in
advances to PLY Stadium Partners, Inc.
The Company has not complied with certain covenants involving substantially
all of the Company's loan agreements, including covenants that restrict
transactions with affiliates and which require the filing of audited financial
statements for the Company and its subsidiaries on a timely basis. As a result,
the Company's debt has been classified as current as of September 30, 1996 and
March 31, 1997.
The Company is in the process of negotiating a transaction involving Overhill
that the Company expects will resolve the Rice lawsuit and improve the Company's
overall debt structure, but there can be no assurance that such transaction will
be consummated.
Accordingly, the Company's management believes that cash generated from the
proposed Overhill transaction and from operations, together with existing lines
of credit, will be sufficient to enable the Company to meet its liquidity
requirements for the next 12 months.
-12-
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In January 1997, a suit was filed in District Court of Dallas County against the
Company by Rice Partners II, L.P., subordinated debt holders of Overhill. The
suit claims, among other things, that the Company breached covenants of the
subordinated debt agreement and refused to cure the defaults within a reasonable
period of time. The Company has filed a counter suit claiming Rice Partners II,
L.P. (i) refused to comply with verbal agreements to the indenture (ii)
conspired with the former general manager of Overhill to force the Company to
sell Overhill Farms at a distressed price in order to benefit Rice Partners, II,
L.P. and (iii) caused the halting of trading of the Company's stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
See "Management's Discussion and Analysis--Liquidity and Captial Resources" for
a description of certain defaults.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K - The following reports were filed on Form 8-K during
the quarter ended March 31, 1997.
NONE
-13-
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
POLYPHASE CORPORATION
(REGISTRANT)
Date: June 9, 1997 By: /s/ Paul A. Tanner
---------------------------------
Paul A. Tanner
President and
Chief Executive Officer
-14-
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
----------------- -----------------------
27 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 18,003,763
<ALLOWANCES> 3,850,808
<INVENTORY> 26,721,117
<CURRENT-ASSETS> 48,783,712
<PP&E> 14,061,600
<DEPRECIATION> 5,047,639
<TOTAL-ASSETS> 96,428,916
<CURRENT-LIABILITIES> 54,344,203
<BONDS> 0
0
1,250
<COMMON> 136,641
<OTHER-SE> 25,102,144
<TOTAL-LIABILITY-AND-EQUITY> 96,428,916
<SALES> 74,575,012
<TOTAL-REVENUES> 74,575,012
<CGS> 62,680,099
<TOTAL-COSTS> 62,680,099
<OTHER-EXPENSES> 8,434,856
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,414,350
<INCOME-PRETAX> 140,810
<INCOME-TAX> 120,528
<INCOME-CONTINUING> (274,238)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (274,238)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
