FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1998
OR
[ ] 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: 0-14617
RHEOMETRIC SCIENTIFIC,INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
New Jersey 61-0708419
______________________________ ________________________
(State or other jurisdiction of (I.R.S. Employer Identi-
incorporation or organization) fication Number)
One Possumtown Road, Piscataway, NJ 08854-2103
_______________________________________ _____________
(Address of principal executive offices) (Zip Code)
(732) 560-8550
____________________________________________________
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
_____ _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 1, 1998
__________________________ _______________________________
Common Stock, no par value 13,161,739
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RHEOMETRIC SCIENTIFIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
<CAPTION>
September December
30, 1998 31, 1997
___________ __________
<S> <C> <C>
ASSETS
Current Assets
Cash $ 343 $ 297
Accounts receivable, net 10,842 14,916
Inventories, net
Finished goods 3,831 5,659
Work in process 1,807 2,650
Assembled components, materials, and parts 6,625 3,550
______ ______
12,263 11,859
Prepaid expenses and other assets 995 813
______ ______
Total current assets 24,443 27,885
______ ______
Property, plant, and equipment 16,058 15,904
Less accumulated depreciation and
Amortization 10,072 9,475
______ ______
Property, plant, and equipment, net 5,986 6,429
Other assets 938 1,120
_______ ______
Total Assets $31,367 $35,434
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term bank borrowings $ 7,157 $ 8,769
Current maturities of long-term debt 229 227
Accounts payable 2,119 3,931
Borrowings against accounts receivable 548 958
Payable to affiliate 1,710 1,064
Accrued liabilities 4,485 5,360
______ ______
Total current liabilities 16,248 20,309
______ ______
Long-term note payable 15 79
Long-term debt lease obligation 4,702 4,718
Long-term debt - affiliate 6,258 6,258
Other long-term liabilities 1,459 1,240
______ ______
Total liabilities 28,682 32,604
______ ______
Commitments and Contingencies
Shareholders' Equity
Common stock, stated value of $.001,
authorized 20,000 shares; issued and
outstanding 13,162 shares 13 13
Additional paid-in capital 25,523 25,492
Accumulated deficit (22,586) (22,547)
Cumulative translation adjustment (265) (128)
______ ______
Total shareholders' equity 2,685 2,830
______ ______
Total Liabilities & Shareholders' Equity $31,367 $35,434
====== ======
See Notes to Condensed Consolidated Financial Statements.
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RHEOMETRIC SCIENTIFIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
_______ _______ _______ _______
<S> <C> <C> <C> <C>
Sales $ 7,580 $ 8,008 $23,077 $26,716
Cost of sales 3,952 5,396 11,949 15,474
______ ______ ______ ______
Gross profit 3,628 2,612 11,128 11,242
______ ______ ______ ______
General and administrative expenses 324 708 994 2,267
Marketing and selling expenses 1,959 2,154 6,559 6,697
Research and development expenses 583 706 1,677 2,183
Restructuring expense -- 1,624 -- 1,624
Goodwill and intangible amortization 58 103 179 237
______ ______ ______ ______
Total Operating Expenses 2,924 5,295 9,409 13,008
______ ______ ______ ______
Operating income/(loss) 704 (2,683) 1,719 (1,766)
Interest expense (366) (357) (1,131) (1,119)
Interest expense - Affiliate (231) (211) (667) (621)
Interest income -- 1 -- 21
Foreign currency gain/(loss) 179 (136) 46 (244)
______ ______ ______ ______
Income/(loss) before income taxes 286 (3,386) (33) (3,729)
Income tax expense (1) (40) (6) (48)
______ ______ ______ ______
Net income/(loss) $ 285 $(3,426) $ (39) $(3,777)
Net income/(loss) per share
Basic $ 0.02 $(0.26) $ (0.00) $ (0.29)
Diluted $ 0.02 $(0.26) $ (0.00) $ (0.29)
Average number of shares Outstanding
Basic 13,162 13,162 13,162 13,162
====== ====== ====== ======
Diluted 13,162 13,162 13,162 13,162
====== ====== ====== ======
See Notes to Condensed Consolidated Financial Statements.
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RHEOMETRIC SCIENTIFIC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
<CAPTION>
Nine Months Ended
September 30,
1998 1997
________ ________
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (39) $(3,777)
Adjustments to reconcile net loss to net cash
(used in)/provided by operating activities:
Depreciation and amortization of plant and
Equipment 576 585
Amortization of goodwill and intangibles 179 238
Provision for inventory reserves 373 1,089
Unrealized currency (gain)/loss (150) 20
Loss on sale/retirement of plant and equipment 2 --
Warrants issued 31 --
Changes in assets and liabilities:
Accounts receivable 4,055 793
Inventories (666) (3,277)
Prepaid expenses and other current
Assets (51) 111
Restructuring reserve (629) 1,624
Accounts payable and accrued
Liabilities (1,481) (317)
Other assets 1 44
Other non-current liabilities 64 31
______ ______
Net cash provided by/(used in) operating
activities 2,265 (2,836)
______ ______
Cash Flows from Investing Activities:
Purchases of property, plant, and equipment (43) (109)
______ ______
Net cash used in investing activities (43) (109)
______ ______
Cash Flows from Financing Activities:
Net (repayment)/borrowings under line of
credit agreements (1,596) 689
Net (repayments)/borrowings against accounts
receivables (378) 1,048
Repayment of long-term debt/lease obligation (169) (137)
Mortgage participation -- 861
______ ______
Net cash (used in)/provided by financing
activities (2,143) 2,461
______ ______
Effect of exchange rate changes on cash (33) 317
______ ______
Net increase (decrease) in cash 46 (167)
Cash at beginning of period 297 486
______ ______
Cash at end of period $ 343 $ 319
====== ======
Cash payments for interest $1,224 $1,701
====== ======
Cash payments for income taxes $ 137 $ 35
====== ======
See Notes to Condensed Consolidated Financial Statements.
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RHEOMETRIC SCIENTIFIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
______ _______ ______ _______
<S> <C> <C> <C> <C>
Net income/(loss) $ 285 $(3,426) $ (39) $(3,777)
Other comprehensive loss
Foreign currency translation
Adjustments (48) (29) (137) (116)
______ ______ ______ ______
Other comprehensive loss (48) (29) (137) (116)
______ ______ _______ ______
Comprehensive income/(loss) $ 237 $(3,455) $ (176) $(3,893)
====== ====== ====== ======
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RHEOMETRIC SCIENTIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Accounting Policies
The information included in the foregoing interim financial
statements is unaudited. In the opinion of management, all
adjustments, consisting of normal recurring accruals, necessary
for a fair presentation of financial position and results of
operations for the interim periods presented have been reflected
herein. The results of operations for the interim periods are not
necessarily indicative of the results to be expected for the
entire year.
In June 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No. 131,
"Disclosures about Segments of an Enterprise and Related
Information," for fiscal years beginning after December 15, 1997.
The provisions of SFAS No. 131 establish standards for the way
that enterprises report information about operating segments in
annual financial statements and require that selected information
about operating segments in interim financial statements be
reported. It also establishes standards for related disclosure
about products and services, geographic areas, and major
customers. The Company is reviewing these standards of disclosure
for adoption in 1998.
Effective January 1, 1998, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income." The provisions of SFAS No. 130 establish
standards for reporting and display of comprehensive income and its
components in the financial statements. This
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statement requires all items that are required to be recognized
under accounting standards as components of comprehensive income be
reported in the financial statements and displayed with the same
prominence as other financial statements.
In June 1998, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No. 133,
"Accounting for Derivative Instruments and Hedging Activities,"
for fiscal years beginning after June 15, 1999. The provisions of
SFAS No. 133 require all derivatives to be recognised in the
statement of financial position as either assets or liabilities
and measured at fair value. In addition, all hedging
relationships must be designated, reassessed and documented
pursuant to the provisions of SFAS 133. At present time the
Company is reviewing the potential impact of this standard.
2. Loss Per Share
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS No.
128"). SFAS 128 establishes standards for computing and presenting earnings
per share ("EPS") and supersedes APB Opinion No. 15. "Earnings per Share"
("Opinion 15"). SFAS 128 replaces the presentation of primary EPS with a
presentation of basic EPS which excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of
common shares outstanding during the period. Diluted reflects the potential
dilution that could occur if outstanding options and warrants were exercised.
This statement has no effect on the Company's prior period EPS data.
3. Long-term Debt and Short-term Borrowings
Long-term debt consists of the following:
September 30, 1998 December 31, 1997
______________ ___________
Obligation under sale/leaseback
payable through February 2011,
with interest imputed at a weighted-
average rate of 13.9% for 1998
and 1997, respectively $4,843,000 $4,857,000
Note payable through November
1999 with interest at 9.54% 103,000 167,000
__________ __________
4,946,000 5,024,000
Less current maturities 229,000 227,000
__________ __________
$4,717,000 $4,797,000
========== ==========
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The Company has working capital lines of credit with certain
domestic and foreign banks. The foreign working capital lines of
credit are supported by letters of credit issued under the
Company's Loan and Security Agreement, as amended, (the "Loan
Agreement"). Total borrowings were $7,157,000 with remaining
availability of approximately $1,205,000 as of September 30, 1998.
Interest on the domestic line of credit at September 30, 1998 and
1997 was 10%. Interest rates on the foreign lines of credit
ranged between 1.9% and 8.5% as of September 30, 1998 and between
1.9% and 6.8% as of September 30, 1997.
The Loan Agreement requires the Company to maintain a minimum
tangible net worth and working capital, generate minimum
consolidated and domestic cash flows, and achieve a minimum
adjusted funded debt to adjusted tangible net worth ratio. In
addition, the Loan Agreement prohibits the payment of cash
dividends or cash distributions to shareholders.
The Company's lines and letters of credit are subject to
acceleration in the event that there is a material and adverse
change in the condition or affairs, financial or otherwise, of the
Company which in the reasonable opinion of the lender impairs the
lender's collateral or increases its risk so as to jeopardize the
repayment of the obligations.
The Loan Agreement expires on February 23, 1999, and the lender
notified the Company in August 1998 that the Loan Agreement will
not be extended beyond the expiration date. Following that
notification, the Company commenced discussions with other
prospective lenders to replace the credit facility provided by the
Loan Agreement with a credit facility with a maximum available
credit of $10,000,000. The ability to proceed with a lesser
maximum credit than available under the current Loan Agreement is
based on existing improvements in the management of the Company's
working capital. While the Company believes it will be able to
secure a new credit facility on or prior to the expiration date of
the Loan Agreement, it has not yet received a commitment for such
a facility and there can be no assurance that it will do so.
4. 1997 Restructuring
During the third quarter 1997, the Company undertook several
strategic initiatives designed to improve operational efficiencies
and cash management, as well as to enhance its market position and
customer support. These initiatives included a restructuring of
manufacturing operations, a restructuring of international sales
and marketing activities, and an introduction of new products
targeted to broaden markets for rheology and process control
instrumentation. The restructuring and consolidation efforts
resulted in a one-time write-off of $2,224,000, $600,000 related
to inventory
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obsolescence and a restructuring charge of $1,624,000. These
charges are reflected in the Company's third quarter 1997
financial results. At December 31, 1997 the restructuring reserve
of $1,624,000 was reduced by $684,000 as the result of the
assignment of the UK lease to a third party at more favorable
terms than initially anticipated. The restructuring reserve of
$311,000 as of September 30, 1998 is a component of accrued
liabilities in the Consolidated Balance Sheet. Approximately
$422,000 was charged to the restructuring reserve in the third
quarter, while $629,000 was charged during the nine months ended
September 30, 1998.
The Company's restructuring plan centers on its European
operations. The Company will change the focus of Europe to be
centralized in Germany, while maintaining a strong presence in
both the U.K. and France. This plan is 95% complete.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Results of Operations
Sales for the three- and nine-month period ended September 30, 1998
decreased $428,000 and $3,639,000 (or 5.3% and 13.6%), respectively,
as compared to the corresponding periods in 1997. These figures
include a negative impact of $172,000 and $647,000 on sales for the
three and nine months ended September 30, 1998 due to unfavorable
currency rates in effect. The decline in revenue for the three-month
period represents a decrease in Europe and Japan of $502,000 and
$388,000, respectively, offset by an increase in the Americas of
$462,000. The decline in revenue for the nine-month period resulted
from a decrease in Europe and Japan of $2,717,000 and $1,894,000,
respectively, offset by an increase in the Americas of $972,000. For
the nine-month period, total international sales of $10,742,000
represented 46.5% of total sales compared to 1997 international sales
of $15,353,000, which amounted to 57.5% of total sales. The gross
profit percentages for the three and nine months ended September 30,
1998 were 47.9% and 48.2%, respectively. This compares to 32.6% and
42.1% for the same periods in the prior year. The gross margin
improvement is a result of the full effect of the UK manufacturing
transfer, focused cost reduction, and favorable sales mix. In
addition, the third quarter 1997 was adversely affected by a $600,000
charge related to inventory obsolescence.
Operating expenses for the three and nine months ended September 30,
1998 were down $747,000 and $1,975,000 compared to the corresponding
periods in the prior year, excluding the one-time 1997 restructuring
charge of $1,624,000. For both the three- and nine-month periods,
operating expenses were favorably affected by
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foreign currency trends of $47,000 and $184,000, respectively. The
remaining decline is due to cost reduction measures that the Company
had taken in the third quarter 1997 and second quarter 1998.
Net interest expense for the three and nine months ended September 30,
1998 increased $30,000 and $79,000, respectively, compared to the
corresponding periods in the prior year.
The Company is exposed to foreign currency gains and losses related to
its intercompany payables and another payable to Mettler Toledo AG,
pursuant to the exclusive world-wide property rights agreement between
the Company and Mettler, which is due in Swiss Francs. The Company's
foreign currency exposure policy is to not enter into foreign currency
derivative instruments.
The foreign currency adjustments for the three and nine months ended
September 30, 1998 were a gain of $179,000 and $46,000, respectively.
The year-to-date adjustment was primarily due to transaction losses of
$277,000 resulting from the Japanese Yen and Swiss Franc which were
offset by gains of $323,000 related to the German Mark, British Pound,
and French Franc.
Inherent in the Company's business is the potential for inventory
obsolescence for older products as the Company develops new products.
Obsolescence has historically related to parts inventory. The Company
continuously monitors its exposure relating to excess and obsolete
inventory and establishes what in management's judgment at the time
are appropriate valuation reserves.
Liquidity and Capital Resources
Management believes that cash generated from operations and funds
available under lines of credit should be sufficient to meet the
Company's working capital needs until February 23, 1999, and
thereafter depending on the Company's success in obtaining a new
credit facility. Adequacy of cash flows beyond that period will depend
upon the Company's ability to achieve expected sales volumes to
support profitable operations.
The Company has working capital lines of credit with certain domestic
and foreign banks. The foreign working capital lines of credit are
supported by letters of credit issued under the Company's Loan and
Security Agreement, as amended, (the "Loan Agreement"). Total
borrowings were $7,157,000 with remaining availability of
approximately $1,205,000 at September 30, 1998. Interest on the
domestic line of credit at September 30, 1998 was 10% and 10% at
December 31, 1997. Interest rates on the foreign lines of credit
ranged between 1.9% and 8.5% as of September 30, 1998 and between 1.9%
and 6.8% at December 31, 1997.
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The Loan Agreement expires on February 23, 1999, and the lender
notified the Company in August 1998 that the Loan Agreement will not
be extended beyond the expiration date. Following that notification,
the Company has commenced discussions with other prospective lenders
to replace the credit facility provided by the Loan Agreement with a
credit facility with a maximum available credit of $10,000,000. The
ability to proceed with a lesser maximum credit than available under
the current Loan Agreement is based on existing improvements in the
management of the Company's working capital. While the Company
believes it will be able to secure a new credit facility on or prior
to the expiration date of the Loan Agreement, it has not yet received
a commitment for such a facility and there can be no assurance that it
will do so.
Cash Flows from Operations. Net cash provided by operating activities
during the nine months ended September 30, 1998 was $2,265,000, an
increase of $5,101,000 over the same period last year. Net loss for
the nine months ended September 30, 1998 was $39,000 compared to
$3,777,000 during the same period last year. During the nine months
ended September 30, 1998, accounts receivable decreased by $4,055,000
reflecting lower third quarter 1998 sales as compared to the last
quarter 1997 sales. Inventories increased by $666,000 partially due
to lower than anticipated 1998 sales. Management continuously
monitors inventory levels on a worldwide basis in order to ensure that
excess inventory is kept to a minimum. Accounts payable and accrued
liabilities decreased $1,481,000. Additionally, the restructuring
reserve was charged $629,000 during 1998.
Cash Flows From Investing. Net cash used in investing activities
during the nine months ended September 30, 1998 was $43,000 as
compared to $109,000 during the same period in 1997.
Cash Flows From Financing. Net cash used in financing activities
during the nine-month period ended September 30, 1998 was $2,143,000.
The Company's borrowing against its accounts receivable during the
nine-month period ended September 30, 1998 decreased $378,000 while
its borrowing under line of credit agreements decreased $1,596,000.
Year 2000 Issues
Rheometric Scientific recognizes that its operations, as well as those
of its suppliers and customers are reliant upon computer systems for
many aspects of their business. Computer programs and embedded
computer chips that are not Year 2000 compliant will not be able to
distinguish between the calendar years 1900 and 2000. The Company
acknowledges that the Year 2000 situation could adversely impact its
operations and is implementing a comprehensive plan to address all
known aspects of the Year 2000 problem.
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The Company has completed an inventory of information systems,
production and facilities equipment, products, customers, and
suppliers that may potentially have a Year 2000 problem. The Company
has been formally addressing assessments, conversion plans and
conversion implementation and testing for all internal systems running
on a variety of computer platforms. Approximately 85% of the internal
systems conversions and upgrades are completed. Certain non-compliant
systems are being replaced or retired from service. Converted
programs have been tested, and upgrades, as well as software and
equipment replacements, are scheduled to be completed by the fourth
quarter of 1999 with approximately 90% of all internal systems to be
compliant by the second quarter of 1999.
In addition to these efforts regarding internal systems, the Company
has begun assessing its significant suppliers. These suppliers
include raw material, energy and production supply providers, as well
as suppliers of financial, communication and logistics services. The
Company has communicated with certain key suppliers and intends to
send questionnaires to all critical suppliers in the fourth quarter of
1998.
Rheometric Scientific's manufactured products and systems have been
assessed for Year 2000 compliancy. The majority of instruments are
Year 2000 compliant. Remediation plans for non-compliant products
include software upgrades, as well as instructions to customers
advising how to test and, if applicable, correct products with non-
compliant LCD displays. The Company's software products are being
evaluated for Year 2000 compliancy. A majority of its software
products are currently complaint; however, certain programs are still
being evaluated. Product evaluations and test method instructions are
available for customers to verify their specific instrument's Year
2000 compliancy. The Company anticipates completing its evaluation of
its software products in the fourth quarter of 1998.
Rheometric Scientific expects that its systems will be fully
operational and will not cause any material disruptions because of the
Year 2000 problem. Because of the uncertainties associated with
assessing preparedness of suppliers and customers, there is a risk of
material adverse effect on Rheometric's future results of operations
if these constituencies are not capable of correcting their Year 2000
problems, if any. Contingency plans will be developed to address any
problems that may become known.
The Company's estimate of the total cost for Year 2000 compliance,
based on the assessment to date plus estimates of remediation costs
for customers not yet fully assessed, is approximately $35,000, of
which approximately $22,500 has been incurred through September 30,
1998. Incremental spending has not been and is not expected to be
material because most Year
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2000 compliance costs will be met with amounts that are normally
budgeted for procurement and maintenance of the Company's information
systems and production and facilities equipment. The redirection of
spending from procurement of information systems and production and
facilities equipment to implementation of Year 2000 compliance plans
may in some instances delay productivity improvements. The Company
presently believes that the Year 2000 issue will not cause material
operational problems for the Company. However, if the Company is not
successful in identifying all material Year 2000 problems, or
assessment and remediation of identified Year 2000 problems is not
completed in a timely manner, there may be an interruption in, or
failure of, certain normal business activities or operations. Such
interruptions or failures could have a material adverse impact on the
Company's consolidated results of operations and financial condition,
or on its relationships with customers, suppliers, or others.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a)Exhibits (numbered in accordance with Item 601 of Regulation
S-K).
3.1 Certificate of Incorporation of the Registrant, as
Amended, incorporated by reference to Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q for the period
ended March 31, 1995 (File No. 0-14617).
3.2 By-Laws of the Registrant, as Amended, incorporated
by reference to Exhibit 3.2 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1993 (File
No. 0-14617).
4.1 Specimen Certificate representing Common Stock of the
Registrant, incorporated by reference to the exhibits to
the Company's Registration Statement on Form S-1, File No.
33-807 filed on October 10, 1985.
4.2 Warrant to Purchase 132,617 shares Common Stock of Rheometric
Scientific, Inc. issued to RSI (NJ) QRS 12-13, Inc., incorporated by
reference to Exhibit 1 to the Company's Current Report on Form 8-K
dated February 23, 1996 (File No. 0-14617).
4.3 Warrant to Purchase 331,543 shares of Common Stock of Rheometric
Scientific, Inc. issued to RSI (NJ) QRS 12-13, Inc., incorporated by
reference to Exhibit 2 to the Company's Current Report on Form 8-K
dated February 23, 1996 (File No. 0-14617).
*4.4 Rheometric Scientific, Inc. 1996 Stock Option Plan,
incorporated by reference to Exhibit 4.3 to the Company's
Quarterly Report on Form 10-Q for the period ended June
30, 1996 (File No. 0-14617).
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*10.1 Amended and Restated Employment Agreement between Ronald
F. Garritano and the Company incorporated by reference to
Exhibit 10.3 to the Company's Annual Report on Form 10-K
dated December 31, 1997 (File No. 0-14617).
*10.2 Employment Agreement between Matthew Bilt and the
Company, incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1996 (File No. 0-14617).
*10.3 Employment Agreement between Joseph Musanti and the
Company incorporated by reference to Exhibit 10.4 to the
Company's Annual Report on Form 10-K dated December 31,
1997 (File No. 0-14617).
10.4 Loan and Security Agreement with Fleet Capital Corporation
dated February 23, 1996, incorporated by reference to
Exhibit 1 to the Company's Current Report on Form 8-K
dated February 23, 1996 (File No. 0-14617).
10.5 Lease Agreement by and between RSI (NJ) QRS 12-13, Inc., and
Rheometric Scientific, Inc. dated as of February 23, 1996,
incorporated by reference to Exhibit 5 to the Company's Current
Report on Form 8-K dated February 23, 1996 (File No. 0-14617).
10.6 Revolving Credit Facility Note - Fleet Capital Corporation,
incorporated by reference to Exhibit 6 to the Company's Current
Report on Form 8-K dated February 23, 1996 (File No. 0-14617).
10.7 Subordination Agreement between Axess Corporation and Fleet
Capital Corporation, incorporated by reference to Exhibit 10.26 to
the Company's Annual Report on Form 10-K dated December 31, 1995
(File No. 0-14617).
10.8 Subordination Agreement between Axess Corporation and RSI (NJ)
QRS 12-13, Inc., incorporated by reference to Exhibit 10.27 to the
Company's Annual Report on Form 10-K dated December 31, 1995 (File
No. 0-14617).
10.9 Amended and Restated Subordinated Unsecured Working Capital
Note - Axess Corporation, incorporated by reference to Exhibit
10.28 to the Company's Annual Report on Form 10-K dated
December 31, 1995 (File No. 0-14617).
10.10 First Amendment to Lease Agreement dated June 10, 1996 between
RSI (NJ) QRS 12-13, Inc. and Rheometric Scientific, Inc.
incorporated by reference to Exhibit 10.12 to the Company's Annual
Report on Form 10-K dated December 31, 1996 (File No. 0-14617).
10.11 Second Amendment to Lease Agreement dated February 20, 1997
between RSI (NJ) QRS 12-13, Inc. and Rheometric Scientific, Inc.
incorporated by reference to Exhibit 10.13 to the Company's Annual
Report on Form 10-K dated December 31, 1996 (File No. 0-14617).
10.12 Amendment Letter dated May 2, 1997 by Fleet Capital Corporation,
amending Sections 9.1(J) and 9.3(D) of
13 of 14
<PAGE>
the Loan and Security Agreement dated February 23, 1996,
incorporated by reference to Exhibit 10.14 to the
Company's Annual Report on Form 10-K dated December 31,
1996 (File No. 0-14617).
10.13 Amendment Letter dated May 6, 1997 by RSI (NJ) QRS-12-13, Inc.,
amending paragraphs 7 and 8 of Exhibit D to the Lease Agreement
dated as of February 23, 1996, incorporated by reference to
Exhibit 10.15 to the Company's Annual Report on Form 10-K dated
December 31, 1996 (File No. 0-14617).
10.14 Amendment to Loan and Security Agreement with Fleet Capital
Corporation dated March 31, 1998 incorporated by reference to
Exhibit 10.16 to the Company's Annual Report on Form 10-K dated
December 31, 1997 (File No. 0-14617).
24 Consent of Independent Auditors incorporated by reference
to Exhibit 22 to the Company's Annual Report on Form 10-K
dated December 31, 1997 (File No. 0-14617).
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
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.
RHEOMETRIC SCIENTIFIC, INC.
(Registrant)
November 13, 1998 By /s/ Joseph Musanti
____________________________
Joseph Musanti, Vice President,
Finance & Materials and
Chief Financial Officer
14 of 14
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