<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED March 31, 1999 COMMISSION FILE NUMBER 0-14229
-------------- -------
CROWN ANDERSEN INC
------------------
(Exact name of registrant as specified in its charter)
Delaware 58-1653577
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
306 Dividend Drive, Peachtree City, Georgia 30269
------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 486-2000
--------------
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 filing such
requirements for the past 90 days. Yes X No ___
---
===========================================================================
Class Outstanding at March 31,
----- ------------------------
1999 Common Stock, $0.10 Par Value 1,832,939 shares
----
Page 1 of 12
<PAGE>
CROWN ANDERSEN INC
------------------
INDEX
-----
PAGE NO.
--------
Part I. FINANCIAL INFORMATION:
Consolidated Balance Sheets--
March 31, 1999 and September 30, 1998 3
Consolidated Statements of Income--
Three Months and Six Months Ended March 31, 1999
and 1998 4
Consolidated Statements of Cash Flows--
Six Months Ended March 31, 1999 and 1998 5
Notes to Consolidated Financial Information 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a vote of Security
Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 12
2
<PAGE>
CROWN ANDERSEN INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, September 30,
1999 1998
------------ --------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
CURRENT:
Cash and cash equivalents $ 859,943 $ 1,171,097
Receivables:
Trade, less allowance of $158,730 and $99,324 for
possible losses 2,242,877 2,432,605
Other 104,894 63,285
Income taxes 1,009,816 1,354,594
Costs and estimated earnings in excess of billings on
uncompleted contracts 6,188,075 4,686,555
Inventories 2,433,883 2,341,955
Prepaid expenses 186,722 82,819
Current maturities of long-term note receivable 490,000 490,000
Deferred income taxes 184,730 148,730
----------- -----------
TOTAL CURRENT ASSETS 13,700,940 12,771,640
RESTRICTED CASH 1,036,000 1,036,000
EQUIPMENT HELD FOR RESALE 490,000 490,000
PROPERTY AND EQUIPMENT, less accumulated depreciation 2,889,553 1,573,913
DEFERRED INCOME TAXES 601,513 601,513
PROPERTY HELD FOR RESALE 1,500,000 1,500,000
OTHER ASSETS 977,234 111,051
----------- -----------
$21,195,240 $18,084,117
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 993,171 $ 670,000
Accounts payable 3,641,582 2,025,031
Accruals:
Compensation 389,244 254,704
Warranty 160,000 333,000
Miscellaneous 542,257 603,872
Billings on uncompleted contracts in excess of cost
and estimated earnings - 6,113
Current maturities of long-term debt 835,721 775,000
Deferred income taxes 514,739 531,164
----------- -----------
TOTAL CURRENT LIABILITIES 7,076,714 5,198,884
LONG-TERM DEBT, less current maturities 71,781 -
DEFERRED INCOME TAXES 282,790 21,790
----------- -----------
TOTAL LIABILITIES 7,431,285 5,220,674
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, $.10 par; shares authorized 20,000,000;
issued 1,873,635; outstanding 1,832,939 and 1,515,571 187,364 156,164
Additional paid-in capital 3,826,301 2,905,801
Treasury stock; 40,696, at cost (270,235) (295,733)
Retained earnings 9,967,901 9,904,257
Foreign currency translation adjustment 52,624 192,954
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 13,763,955 12,863,443
----------- -----------
$21,195,240 $18,084,117
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
CROWN ANDERSEN INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED MARCH 31, ENDED MARCH 31,
------------------------ -------------------------
1999 1998 1999 1998
--------- ----------- --------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Contracts $ 4,482,346 $ 3,913,819 $ 8,050,459 $ 8,310,060
Sales 530,708 570,654 1,066,387 928,502
Other - - 27,138 16,835
----------- ----------- ----------- -----------
5,013,054 4,484,473 9,143,984 9,255,397
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Cost of contracts and sales 4,070,733 3,778,120 7,444,327 7,552,818
Selling, general and
administrative 888,264 751,636 1,609,072 1,594,935
Interest and other (11,321) (57,466) (7,759) (107,520)
----------- ----------- ----------- -----------
4,947,676 4,472,290 9,045,640 9,040,233
----------- ----------- ----------- -----------
Income from operations before
taxes on income 65,378 12,183 98,344 215,164
TAXES ON INCOME 22,200 3,300 34,700 67,400
----------- ----------- ----------- -----------
NET INCOME $ 43,178 $ 8,883 $ 63,644 $ 147,764
=========== ========== =========== ===========
AVERAGE NUMBER OF SHARES - BASIC 1,825,403 1,515,571 1,707,584 1,513,885
AVERAGE NUMBER OF SHARES - DILUTED 1,882,011 1,515,571 1,761,233 1,513,885
EARNINGS PER SHARE
BASIC $ 0.02 $ 0.01 $ 0.04 $ 0.1O
DILUTED $ 0.02 $ 0.01 $ 0.04 $ 0.1O
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
CROWN ANDERSEN INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended March 31,
--------------------------
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from operations $ 63,644 $ 147,764
Items in income from operations not affecting cash:
Depreciation and amortization 148,232 123,611
Provision for valuation of soil processor unit - 90,000
Deferred income taxes - (500)
Cash provided by (used for)
Trade and other receivables 831,580 (1,747,917)
Refundable income taxes 43,456 (204,656)
Costs and estimated earnings in excess of
billings on uncompleted contracts (1,501,520) 1,375,211
Inventories 338,567 45,562
Prepaid expenses (70,914) (52,819)
Accounts payable 1,339,127 (1,238,674)
Accrued expenses 54,276 (641,641)
Billings on uncompleted contracts in excess of
costs and estimated earnings (6,113) (117,721)
Other 17,802 (33,818)
----------- -----------
Cash provided by (used for) operating activities 1,258,137 (2,255,598)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Collection of note receivable - 150,000
Investment in Griffin Environmental Company Inc. (2,296,010) -
Capital expenditures (66,321) (51,171)
----------- -----------
Cash provided by (used for) investing activities (2,362,331) 98,829
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction in long-term debt (39,279) (444,736)
Decrease in notes payable (134,835) -
Sale of common stock 977,198 24,027
----------- -----------
Cash provided by (used for) financing activities 803,084 (420,709)
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (10,044) (1,820)
----------- -----------
CASH AND CASH EQUIVALENTS:
Net decrease during the period (311,154) (2,579,298)
Balance at beginning of period 1,171,097 4,894,371
----------- -----------
BALANCE AT END OF PERIOD $ 859,943 $ 2,315,073
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
5
<PAGE>
CROWN ANDERSEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
-------------------------------------------
1. Condensed footnotes:
-------------------
As contemplated by the Securities and Exchange Commission instructions to
Form 10-Q, the following footnotes have been condensed and therefore do not
contain all disclosures required in connection with annual financial statements.
Reference should be made to the notes to Crown Andersen Inc.'s annual financial
statements set forth in its Form 10-K for the year ended September 30, 1998.
2. Earnings per share:
------------------
Earnings per share is computed based on the weighted average of common
shares, common stock options and warrants (using the treasury stock method) in
accordance with FAS 128 "Earnings Per Share."
3. Stock options and warrants:
--------------------------
As of March 31, 1999, options to purchase 132,000 shares at an average
price of $4.36 were outstanding under the Company's stock option plan. The
Company also has outstanding warrants to purchase 110,000 shares of common stock
under the Directors Stock Warrant Plan at $4.36 per share.
On April 2, 1999, options to purchase 177,900 common shares at a price of
$4.50 per share were granted to key employees. On April 9, 1999, eligible
directors purchased warrants to purchase 190,000 shares of common stock at $4.50
per share.
4. Revenue recognition:
-------------------
Revenues from contracts are reported on the percentage-of-completion
method. Under this method, the percentage of contract revenue to be recognized
currently is based on the ratio of costs incurred to date to total estimated
contract costs, after giving effect to the most recent estimate of costs to
complete. Revenues other than contracts are recorded when the product is shipped
or the service is rendered to the customers.
5. Inventories:
-----------
Inventories were $2,433,883 and $2,341,955 as of March 31, 1999 and
September 30, 1998. Included in inventories is approximately $1,120,000 related
to incineration equipment purchased from a former competitor.
6. Restricted cash:
---------------
As of March 31, 1999, $1,036,000 of the Company's short-term investments
were held by banks as collateral for an outstanding letter of credit. The letter
of credit expires in December 1999.
7. Equipment held for resale:
-------------------------
On September 30, 1992, the Company sold a soil processor unit under a
financing-type lease arrangement. As a result of the customer's default, the
Company, during 1994, terminated the lease and repossessed the equipment. On
September 30, 1994, the Company reclassified this asset as equipment held for
resale and reduced its carrying value from approximately $2.1 million to $1.8
million. The Company employs an outside appraiser and reviews the carrying value
of this unit on a periodic basis. Through March 31, 1999, the carrying value of
this unit has been reduced to $490,000.
8. Commitments and contingencies:
------------------------------
There are no significant changes to the information discussed in the
Company's annual report on Form 10K for the year ended September 30, 1998 (Note
12 to the Consolidated Financial Statements).
6
<PAGE>
9. Litigation settlement:
---------------------
During fiscal 1998, the Company settled the litigation over principal and
interest for certain Kansas property formerly occupied by Struthers Thermo-Flood
Corporation, a former Crown Andersen subsidiary. Under terms of the settlement,
the Company paid $1,630,000 in cash and issued a one year, non-interest bearing
promissory note and the amount of $670,000. In exchange, the Company received
the rights (without further obligation) to transfer title of this property to a
purchaser or to the Company. The Company is in the process of negotiations with
potential purchasers. The estimated value of these assets is presently
$1,500,000. This transaction was recorded as of June 30, 1998 and the Company
recognized a net loss of approximately $900,000. The Company's March 31, 1999
balance sheet includes these assets as "property held for sale" and the note
payable of $670,000.
10. Acquisition of business:
-----------------------
On December 16, 1998 the Company purchased all the outstanding shares of
stock of Griffin Environmental Company Inc. ("Griffin"). Griffin is a
manufacturer of fabric filter and cartridge dust collector pollution control
equipment. Griffin sells its pollution control equipment to a wide variety of
industries, including concrete, steel, other metals, clays, paper, glass, and
other industries.
The Company purchased Griffin for $2.6 million. This was comprised of cash
of $2.3 million and a one-year promissory note of $271,000 secured by a second
mortgage on the real estate. The note bears annual interest at 4.33%, payable
monthly, and the principal is due on December 16, 1999.
The acquisition includes the purchase of assets comprised primarily of
inventories, accounts receivable, and property, plant, and equipment.
Liabilities assumed in the acquisition consist primarily of trade accounts
payable, customer deposits, long term debt, and other accrued liabilities. The
transaction was accounted for under the purchase method of accounting whereby
all assets and liabilities were valued at their current fair market value at
December 16, 1998.
* * *
The financial information included in this report has not been certified
and should not be relied upon to the same extent as certified financial
statements. The financial information included in this report reflects all
adjustments which are, in the opinion of management, necessary for a fair
presentation of the results for the interim period. Nevertheless, the results
shown are for interim periods and are not necessarily indicative of results to
be expected for the year.
7
<PAGE>
CROWN ANDERSEN INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Introduction:
- ------------
Crown Andersen Inc. (Crown Andersen or the Company) is a publicly-traded
holding company for Andersen 2000 Inc. (Andersen), Griffin Environmental Company
Inc. (Griffin), and, through Andersen, owns all of the outstanding stock of
Montair Andersen bv (Montair). The Company is engaged exclusively in the
pollution control, product recovery and waste processing equipment businesses.
Liquidity and Capital Resources:
- -------------------------------
Cash and cash equivalents at March 31, 1999 decreased $311,154 to $859,943
from the September 30, 1998 balance of $1,171,097. The decrease resulted from
the expenditure of cash to acquire Griffin Environmental Company Inc. Cost and
estimated earnings in excess of billings on uncompleted contracts increased
$1,501,520. However, this increase was offset by an increase in payables and
decreases in receivables and inventories. Cash provided by operating activities
amounted to $1,258,137.
Cash used for investing activities totaled $2,362,331. This amount includes
$2,296,010 for the acquisition of Griffin and capital expenditures of $66,321.
Cash provided by financing activities totaled $803,084. This includes
$977,198 in proceeds from the sale of common stock and debt reduction of
$174,114.
Both Andersen and Montair realized a positive cash flow from operations,
primarily as a result of a decrease in receivables and an increase in payables.
As disclosed in Note 7 to the Consolidated Financial Statements, during
1994 the Company repossessed certain equipment sold under a lease arrangement.
The Company has reduced the carrying value of this asset to $490,000 as of March
31, 1999 and it is reflected as equipment held for resale in the accompanying
consolidated balance sheet. The Company is attempting to market this equipment
for sale and has a number of active negotiations underway for its sale.
As of March 31, 1999, the Company had borrowed $50,000 against its $5.0
million U.S. line of credit, the $0.4 million credit facility available to
Montair, and the $0.5 million credit facility available to Griffin. The amount
of $4.7 million remained available for borrowing under these credit facilities
as $1.2 million in letters of credit are outstanding against the U.S. line of
credit. The U.S. line of credit is up for renewal on June 30, 1999. The Company
expects to utilize its existing credit facility to fund anticipated cash needs
resulting from normal operations.
Under the current loan agreement, the Company is required to obtain the
bank's consent to pay cash dividends, purchase treasury stock, or to sell assets
which constitute collateral. The Company obtained permission to purchase up to
$400,000 of treasury stock. A total of $270,235 of net treasury stock purchases
is reflected in the Company's balance sheet as of March 31, 1999.
As of March 31, 1999, the Company's equity in its Montair operation had
decreased in value by $140,330 from September 30, 1998 as a result of a decrease
in the foreign currency translation adjustment, reflecting a 9% increase in the
U.S. dollar against the Dutch guilder.
The year 2000 issue relates to computer programs and systems that recognize
dates using two digit year data rather than four digit year data. As a result,
such programs and systems may fail or provide incorrect information for dates
after December 31, 1999. If the year 2000 issue were to cause disruption to the
Company's internal information technology systems or to the information
technology systems of entities with whom the Company has commercial
relationships, material adverse effects to the Company's operations could
result.
The Company's internal computer programs and systems consist of programs
and systems relating to virtually all segments of the Company's business,
including customer database management, marketing, order processing, production
budgeting, financial reporting, customer service, investor relations, proposal
generation, cash management and other key information systems.
8
<PAGE>
These systems include a mainframe computer, personal computers, phones,
ancillary sources, internally developed software, and third-party software
programs.
The Company has not yet completed its review of these programs and systems.
The Company does not expect that any required changes to such programs and
systems will cause the Company to incur material costs or present challenges
that cannot be addressed prior to the end of calendar 1999. The Company expects
to complete its reviews of these programs and systems within the next four
months.
The computer programs and operating systems used by entities with whom the
Company has commercial relationships also pose potential problems relating to
the year 2000 issue, which may affect the Company's operations in a variety of
ways. These risks are more difficult to assess than those posed by internal
programs and systems and the Company has not developed a plan for assessing
them.
The Company expects to complete its plan for assessing these programs and
systems and to complete the review by the end of fiscal 1999. Once such
assessment and identification has been completed, the Company intends to resolve
any material risks and uncertainties that are identified by: 1) communicating
further with the relevant vendors and service providers, 2) working internally
to identify alternative sourcing, and 3) formulating contingency plans to deal
with such material risks and uncertainties. The Company expects the resolution
of any such material risks and uncertainties to be an ongoing process until all
year 2000 problems are satisfactorily resolved.
Results of Operations:
- ---------------------
Revenues.
- ---------
Revenues for the first six months of fiscal 1999 were $9,143,984 compared
with $9,255,397 for the first six months of fiscal 1998. For the second quarter
of fiscal 1999, revenues were $5,013,054 compared with $4,484,473 for the
comparable figure in 1998 and $4,130,930 for the first three months of fiscal
1999. Foreign sales (including export sales by Andersen and sales by Montair)
were $2.6 million and $7.3 million for the first six months of 1999 and 1998,
respectively, and accounted for 28.5% and 79.0% of revenues. All changes in
revenues are related to the quantity of products sold, not to pricing changes.
Six months revenues in 1999 decreased $111,413 from fiscal 1998. Revenues
at Andersen declined $1,247,898 (17%) while sales at Montair increased $127,580
(7%). The decrease at Andersen was partially offset by four months sales at the
newly acquired subsidiary, Griffin Environmental Company Inc.
The Company continues to rely on the international market for some of its
revenues. Demand for the Company's products in the domestic market has remained
low over the last five years because of uncertainty in changes in United States
regulations. However, the Company experienced an increase in domestic business
in late 1998 and expects this to continue to increase in 1999. There has been a
substantial slowdown in the Asian markets which the Company has served in the
last five years, and the slowdown is just now being offset by other markets. The
Company expects more uncertainties for the next 2-3 years in the Asian markets
because of currency problems in countries where the Company has been doing
business.
Second quarter 1999 revenues increased $528,581 (12%) from the comparable
period in 1998. The increase increase reflects higher revenues from Montair and
sales from Griffin Environmental Company Inc. (the newly acquired subsidiary)
which offset a decline in revenues at Andersen of $555,815.
Second quarter 1999 revenues increased $882,124 (21%) from the preceding
fiscal quarter, primarily as a result of sales by Griffin Environmental Company
Inc., the newly acquired subsidiary.
Cost of Sales.
- --------------
For the first six months of fiscal 1999, cost of sales totaled $7,444,327
as compared with $7,552,818 for the first six months of fiscal 1998. Second
quarter 1999 cost of sales were $4,070,733 as compared with $3,778,120 for the
second quarter of 1998 and $3,373,594 for the first quarter of 1999.
9
<PAGE>
Cost of sales for the first six months of 1999 decreased $108,491 (1.4%)
from the similar period in 1998 as a result of lower sales. Fiscal 1999 cost of
sales reflects four months operations of Griffin (the recently acquired
subsidiary).
Second quarter 1999 cost of sales increased $697,139 (21%) from the
preceding fiscal year as a result of higher sales by Griffin, the newly acquired
subsidiary.
Selling, General and Administrative Costs.
- ------------------------------------------
Selling, general and administrative costs for the first six months of
fiscal 1999 were $1,609,072 compared with $1,594,935 for the first six months of
1998. For the second quarter of 1999, selling, general and administrative costs
were $888,264, as compared with $751,636 in the comparable period of 1998 and
$720,808 for the first quarter of 1999. As a percentage of revenues, selling,
general and administrative costs were 17.6%, 17.3%, 17.7%, 16.7% and 17.4% and
17.4% of revenues for the first six months of 1999 and 1998, the second quarters
of 1999 and 1998, and the first quarter of 1999, respectively. The current
period increases of $14,137 (1%) and $136,628 (18%) from the comparable six
months and second quarter periods of 1998 are primarily attributable to the
expenses incurred by Griffin (the newly acquired subsidiary), offset by a
reduction in the valuation provision on equipment held for resale.
Second quarter 1999 expenses increased $167,456 (23%), primarily as a
result of expenses incurred by Griffin (the newly acquired subsidiary).
Interest and Other (Income) Expenses.
- -------------------------------------
Interest and other (income) expenses for the first six months of fiscal
1999 totaled $7,759 (credit), compared with a credit of $107,520 for the
comparable period in 1998. For the second quarter of 1999, interest and other
expenses were $11,321 (credit) compared to a credit of $57,466 for the second
quarter of 1998, and an expense of $3,562 for the first quarter of 1999. The
increase in costs of $46,145 and $99,761 in the current six months and second
quarter period reflect a substantial reduction in interest income as cash
available for investment was used to pay down debt and to settle litigation. The
decrease in costs of $14,883 from the preceding fiscal quarter reflect higher
rental income and a gain in disposition of assets realized in the current 1999
quarter.
Taxes on Income.
- ----------------
The effective tax rate for all periods are:
First 6 months of 1999 - 35.3%
First 6 months of 1998 - 31.3%
Second quarter of 1999 - 34.0%
Second quarter of 1998 - 27.1%
First quarter of 1999 - 37.9%
Net Income.
- -----------
Net income for the first six months of fiscal 1999 was $63,644 or $0.04 per
share, compared with $147,764 or $0.10 per share for the first six months of
fiscal 1998. For the second quarter of 1999, net income was $43,178 or $0.02 per
share compared with $8,883 or $0.01 per share for the second quarter of 1998 and
$20,466 or $0.01 per share for the first quarter of 1999.
Net income declined $84,120 in the current six month period, primarily as a
result of higher interest and general and administrative costs. Revenues
declined 1%. The earnings decline was entirely attributable to Andersen. The
Griffin operation reported net income of $6,837, offsetting a loss of $14,274
reported in the preceding quarter. Montair reported net income of $45,899,
compared to a loss of $43,736 in the comparable period of 1998.
In the second quarter of fiscal 1999, Griffin reported net income of
$21,111 or 49% of the net income reported for the quarter. Net income increased
$22,712 from the preceding fiscal quarter, as a result of operations at Griffin.
10
<PAGE>
Shares Outstanding.
- -------------------
The average shares and equivalent shares outstanding for all periods were:
BASIC DILUTED
----- -------
First 6 months of 1999 1,707,584 1,761,233
First 6 months of 1998 1,513,885 1,513,885
Second quarter of 1999 1,825,403 1,882,011
Second quarter of 1998 1,515,571 1,515,571
First Quarter of 1999 1,590,571 1,590,571
Forward-Looking Statements.
- ---------------------------
Certain forward-looking statements are made in this Management's Discussion
and Analysis. The Company's results may differ materially from those in the
forward-looking statements. Forward-looking statements are based on management's
current views and assumptions, and involve risks and uncertainties that
significantly affect expected results. For example, operating results may be
affected by external factors. Such factors include, but are not limited to,
changes in the regulatory environment, general conditions in the environmental
industry, the Company's competitive position, and economic conditions in
international markets.
11
<PAGE>
CROWN ANDERSEN INC AND SUBSIDIARIES
PART II
OTHER INFORMATION
=================
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) The Annual Meeting of Stockholders of the registrant was held on
February 10, 1999. At the Annual Meeting of Stockholders, proxies
were solicited under Regulation 14 of the Exchange Act and all
management nominees for the directors listed in the proxy
statement were elected. There was no solicitation in opposition
to management's nominees. In addition, the following proposals
were approved:
The appointment of BDO Seidman, LLP, as independent
accountants of the Company for the fiscal year ending
September 30, 1999.
The amendment of the Company's 1998 Directors Stock Warrant
Plan.
The amendment of the Company's 1998 Incentive Stock Option
Plan.
The amendment of the Certificate of Incorporation.
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibit 27. Financial Data Schedule
(b) The Company filed a report on Form 8K during the quarter ended
March 31, 1999 (on January 15, 1999).
SIGNATURES
==========
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.
CROWN ANDERSEN INC.
Dated: May 7, 1999 By: /s/ Jack D. Brady
----------- ------------------
Jack D. Brady
Chairman of the Board
(Duly Authorized Officer
Dated: May 7, 1999 By: /s/ Milton Emmanuelli
----------- ----------------------
Milton Emmanuelli
Secretary and Treasurer
(Principal Financial Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 859,943
<SECURITIES> 0
<RECEIVABLES> 2,401,607
<ALLOWANCES> 158,730
<INVENTORY> 2,433,833
<CURRENT-ASSETS> 13,700,940
<PP&E> 2,889,553
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,195,240
<CURRENT-LIABILITIES> 7,076,714
<BONDS> 71,781
0
0
<COMMON> 187,364
<OTHER-SE> 13,576,591
<TOTAL-LIABILITY-AND-EQUITY> 21,195,240
<SALES> 9,116,846
<TOTAL-REVENUES> 9,143,984
<CGS> 7,444,327
<TOTAL-COSTS> 9,045,640
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (7,759)
<INCOME-PRETAX> 98,344
<INCOME-TAX> 34,700
<INCOME-CONTINUING> 63,644
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,644
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.04
</TABLE>
