UNITED STATES
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 quarter period ended: January 31, 1995
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:# 0-14754
ELECTRIC & GAS TECHNOLOGY, INC.
(Exact Name of Registrant as specified in its Charter)
TEXAS 75-2059193
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13636 Neutron Road, Dallas, Texas 75244-4410
(Address of Principal Executive Offices) (Zip Code)
(214) 934-8797
(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
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
The number of shares outstanding of each of the Issuer's Classes of
Common Stock, as of the close of the period covered by this report:
Common - $0.01 Par Value - 7,905,416 shares at March 6, 1995.
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
Index to Form 10-Q
For the Quarter Ended January 31, 1995
Page
Part I - Financial Information
1. Condensed Consolidated Financial Statements:
(a) Condensed Consolidated Balance Sheets as
of January 31, 1995 and July 31, 1994 3
(b) Condensed Consolidated Statements of
Operations for the three and six months
ended January 31, 1995 and 1994 4
(c) Condensed Consolidated Statements of
Cash Flows for the six months ended
January 31, 1995 and 1994 5
(d) Notes to Condensed Consolidated
Financial Statements 6-9
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-14
Part II - Other Information
Item 1 - Legal Proceedings 15
Item 6 - Exhibits and Reports on Form 8-K 15
Signature (pursuant to General Instruction E) 16
All other items called for by the instructions are
omitted as they are either inapplicable, not required,
or the information is included in the Condensed
Financial Statements or Notes thereto.
2
<PAGE>
<TABLE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
January 31, 1995 and July 31, 1994
ASSETS
January 31, July 31,
1995 1994
<S> <C> <C>
CURRENT ASSETS (Unaudited)
Cash and cash equivalents $ 592,730 $ 638,245
Accounts receivable 5,597,015 6,541,832
Inventories 11,051,503 11,902,684
Prepaid expenses 83,282 222,815
Total current assets 17,324,530 19,305,576
PROPERTY, PLANT AND EQUIPMENT, net 10,017,654 10,223,493
OTHER ASSETS
Discontinued operations 479,775 508,914
Other assets 1,850,111 1,042,125
Total other assets 2,329,886 1,551,039
TOTAL ASSETS $29,672,070 $31,080,108
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 5,890,796 $ 6,605,442
Accounts payable 3,972,285 4,815,477
Accrued liabilities 1,588,444 2,152,330
Current maturities of long-term
obligations 1,802,271 1,482,163
Total current liabilities 13,253,796 15,055,412
LONG-TERM OBLIGATIONS
Long-term obligations, less current
maturities 5,904,105 6,014,513
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 30,000,000
shares authorized and issued 7,905,416 79,054 79,054
Additional paid-in capital 9,843,734 9,843,734
Retained earnings 2,520,503 1,961,482
Pension liability adjustment (473,823) (473,823)
Cumulative translation adjustment (498,382) (460,847)
11,471,086 10,949,600
Less treasury stock, 294,992 shares in
1995 and 289,992 shares in 1994,
at cost (956,917) (939,417)
Total stockholders' equity 10,514,169 10,010,183
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $29,672,070 $31,080,108
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Six Months Ended January 31, 1995 and 1994
(Unaudited)
Three months ended Six months ended
January 31, January 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Sales $10,534,145 $11,059,274 $22,617,950 $23,121,938
Cost of goods sold 8,256,593 7,945,093 17,010,110 16,814,383
Gross profit 2,277,552 3,114,181 5,607,840 6,307,555
Selling, general and
administrative expenses 2,529,333 2,755,858 5,253,559 5,457,087
Operating profit (loss) (251,781) 358,323 354,281 850,468
Other income and (expenses)
Interest, net (252,907) (259,396) (495,656) (510,351)
Other, net 637,699 81,923 660,385 32,102
384,792 (177,473) 164,729 (478,249)
Earning before income taxes 133,011 180,850 519,010 372,219
Provision (credit) for
income taxes (31,976) 10,477 (40,011) 33,198
NET EARNINGS $ 164,987 $ 170,373 $ 559,021 $ 339,021
Earnings per common share:
Net earnings $ 0.02 $ 0.02 $ 0.07 $ 0.05
Weighted average number of
common shares outstanding 7,610,424 7,446,637 7,610,424 7,446,637
</TABLE>
See accompanying notes.
4
<PAGE>
<TABLE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended January 31, 1995 and 1994
(Unaudited)
Six months ended
January
1995 1994
<S> <C> <C>
Increase (decrease) in cash:
Cash flows from operating activities:
Net earnings $ 559,021 $ 339,021
Adjustments to reconcile net earnings ( loss)
to net cash provided by operating activities:
Depreciation and amortization 566,190 554,430
Gain on sale of assets (614,579) -
Changes in assets and liabilities:
Accounts receivable 944,817 (430,871)
Inventories (56,342) (1,056,193)
Prepaid expenses 139,533 (171,408)
Other assets (778,847) (313,144)
Accounts payable (880,727) (358,802)
Accrued liabilities (563,886) 176,832
Net cash provided by (used in) operating activities (684,820) (1,260,135)
Cash flows from investing activities:
Proceeds from sale of assets 1,688,963 -
Purchase of property, plant and equipment (527,212) (1,147,967)
Net cash provided by (used in) investing activities 1,161,751 (1,147,967)
Cash flows from financing activities:
Purchase of treasury stock (17,500) -
Increase (decrease) in notes payable and
long-term obligations (504,946) 948,304
Proceeds from issuance of common stock - 97,237
Net cash provided by (used in) financing activities (522,446) 1,045,541
NET INCREASE (DECREASE) IN CASH (45,515) (1,362,561)
Cash - beginning of period 638,245 2,240,075
Cash - end of period $ 592,730 $ 877,514
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 557,372 $ 543,904
</TABLE>
See accompanying notes.
5
<PAGE>
ELECTRIC $ GAS TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1995
(Unaudited)
NOTE A - GENERAL
Electric & Gas Technology, Inc., (the "Company") was organized
under the laws of the State of Texas on March 18, 1985, to serve as a
holding company for operating subsidiary corporations. The Company
presently is the owner of Superior (100%), which currently owns 80% of
ABI and Stelpro (100%), which currently owns 100% of Hydel; and the
Company owns Logic (100%), Reynolds (100%), Fridcorp (100%) and SMI
(100%), and, through such subsidiaries, operates in five distinct
business segments: (1) the manufacture and sale of electrical
switching devices, electric meter enclosures, electric heaters, and
pole-line hardware for the electric utility industry and the general
public (Superior, Stelpro and Hydel); (2) the design and manufacture
of defense electronic components (SMI); (3) the manufacture and sale
of natural gas measurement, metering and odorization equipment
(Reynolds); (4) the manufacture and sale of precision metal enclosures
for telecommunication and computer equipment (Logic); and (5) the
manufacture of vacuum-form and injection-mold products (Fridcorp).
Effective January 31, 1993, the Company discontinued the operations
of its 80% owned ABI which previously was engaged in the manufacture
and sale of brass and bronze ingots.
The accompanying condensed financial statements have been prepared
in accordance with the regulations of the Securities and Exchange
Commission (SEC) for inclusion in the Company's Quarterly Report on
Form 10-Q. They are subject to year-end audit adjustments; however,
they reflect all adjustments of a normal recurring nature which are,
in the opinion of Management, necessary for a fair statement of the
results of operations for the interim periods.
The statements were prepared using generally accepted accounting
principles. As permitted by the SEC, the statements depart from
generally accepted accounting disclosure principles in that certain
data is combined, condensed or summarized that would otherwise be
reported separately and certain disclosures of the type that were made
in the Notes to Financial Statements for the year ended July 31, 1994
have been omitted, even though they are necessary for a fair
presentation of the financial position at January 31, 1995 and 1994
and the results of operations and cash flows for the periods then
ended.
6
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 1995
(Unaudited)
NOTE B - INVENTORIES
Inventories are comprised as follows:
<TABLE>
January 31, 1995 July 31, 1994
<S> <C> <C>
Raw Materials $ 5,598,592 $ 5,668,279
Work in process 1,664,771 2,598,930
Finished Goods 3,788,140 3,635,475
$11,051,503 $11,902,684
NOTE C - COMMON STOCK AND EARNINGS PER COMMON SHARE
Earnings per common share is based on the average weighted shares
outstanding during the periods reported on.
NOTE D - SALE OF ASSETS
The Company sold inventory, machinery and equipment and the
business operations of the heating division of its Canadian
subsidiary, Stelpro for cash. The sale was closed on December 30,
1994. Proceeds from the sale amounted to $1,688,963 which resulted in
a gain of approximately $610,000 and is included in other income.
Sales for the heating division amounted to approximately $2,268,000
and $2,490,000 for the six months ended January 31, 1995 and 1994,
respectively. Stelpro will continue its electrical division
operations.
7
<PAGE>
NOTE E - INDUSTRY SEGMENT DATA:
The Company's business is primarily comprised of five industry
segments: i. electrical components and enclosures (Superior, Stelpro
and Hydel); ii. defense electronics (SMI); iii. natural gas
measurement and recording devices and odorization (Reynolds); iv.
customized metal fabrication (Logic); and v. injection molding and
thermoforming plastic components (Fridcorp) as set forth below.
Operating profits represent total sales less cost of sales and general
and administrative expenses.
</TABLE>
<TABLE>
Three Months Ended January 31, 1995
Defense Metal General
Electrical Electronics Gas Fabrication Plastics Corporate Consolidated
<S> <C> <C> <C> <C> <C> <C> <C>
Sales $ 4,403,991 $1,507,793 $ 895,340 $3,417,964 $309,057 $ - $10,534,145
Cost of goods sold 3,592,004 956,756 480,296 2,951,069 276,468 - 8,256,593
Selling, gen. & adm. 852,607 786,431 358,952 134,852 74,567 321,924 2,529,333
Operating profit(loss) (40,620) (235,394) 56,092 332,043 (41,978) (321,924) (251,781)
Interest, net (95,383) (72,547) (15,803) (76,715) (992) 8,533 (252,907)
Other income(expense) 607,082 - 13 - (2,332) 32,936 637,699
Net earnings (loss)
before income taxes $ 471,079 $ (307,941) $ 40,302 $ 255,328 $(45,302) $(280,455) $ 133,011
Assets:
Receivables $2,771,486 $506,948 $547,323 $1,617,377 $151,524 $2,357 $5,597,015
Inventory $6,074,864 $2,103,837 $1,009,635 $1,805,314 $57,853 $ - $11,051,503
Total assets $11,113,261 $3,881,910 $2,583,880 $9,160,418 $777,259 $2,155,342 $29,672,070
Depreciation $62,085 $72,564 $36,830 $88,145 $17,082 $3,924 $280,630
Additions PP&E $5,332 $72,241 $36,004 $269,504 $18,368 $ - $401,449
</TABLE>
8
<PAGE>
NOTE E - INDUSTRY SEGMENT DATA, Continued:
<TABLE>
Six Months Ended January 31, 1995
Defense Metal General
Electrical Electronics Gas Fabrication Plastics Corporate Consolidated
<S> <C> <C> <C> <C> <C> <C> <C>
Sales $10,090,048 $3,298,075 $1,563,254 $7,007,426 $659,147 $ - $22,617,950
Cost of goods sold 8,019,147 1,894,149 857,037 5,678,816 560,961 - 17,010,110
Selling, gen. & adm. 1,805,587 1,542,722 684,639 509,017 138,529 573,065 5,253,559
Operating profit(loss) 265,314 (138,796) 21,578 819,593 (40,343) (573,065) 354,281
Interest, net (206,519) (126,190) (29,248) (145,963) (4,674) 16,938 (495,956)
Other income(expense) 614,318 - 200 - 12,931 32,936 660,385
Net earnings (loss)
before income taxes $ 673,113 $ (264,986) $ (7,470) $ 673,630 $(32,086) $(523,191) $ 519,010
Depreciation $129,986 $145,129 $73,144 $176,290 $33,792 $7,849 $566,190
Additions PP&E $46,380 $89,541 $70,559 $277,004 $43,728 $ - $527,212
</TABLE>
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company, through its subsidiaries, operates within five
separate industries. These are: (i)the manufacture and sale of
electrical switching devices, electric heaters and metal enclosures
for use in the electric utility industry, (ii)the manufacture and sale
of defense electronics, (iii)the manufacture of natural gas
measurement and gas odorization products, (iv)the manufacture and sale
of precision, customized metal enclosures for electronic equipment;
and (v)the manufacture and sale of vacuum-form and injection-mold
plastic products. The Company's former metal extraction segment has
been treated as a discontinued operation.
Results of Operations
Summary. The Company reported net earnings of $164,987 and
$559,021 for the three and six months ended January 31, 1995 compared
to $170,373 and $339,021 for the three and six months ended January
31, 1994, respectively. Operating income decreased by $610,104 and
$496,187 for the three and six months periods, when compared to the
same prior periods. However, net earnings only decreased for the
three month period by $47,839, primarily the result of a gain on the
sale of inventory and machinery and equipment constituting the heating
division of Stelpro Limited part of the electrical segment. Net
earnings for the six months was $559,021 an increase of $146,791 over
the prior period. Revenues for the three and six months periods
declined in the Electrical, Gas, Metal fabrication and Plastic
segments by $682,373 and $729,162, respectively, offset by the only
revenue gain in the Defense segment of $157,244 and $225,174,
respectively. Overall gross margins declined by 6.54% and 2.49% to
21.62% and 24.79% for the three and six month periods, respectively.
Increases(decreases) for the six and three months period ended
January 31, 1995, as compared with the similar period of 1994, for key
operating data were as follows:
<TABLE>
Three Months Ended Six Months Ended
January 31, 1995 January 31,1995
Increase Percent Increase Percent
(Decrease) Change (Decrease) Change
<S> <C> <C> <C> <C>
Operating Revenues $(525,129) (4.75) $(503,988) (2.18)
Operating Income (610,104) (170.27) (496,187) (58.34)
Earnings (Loss) from
continuing operations
before income taxes (47,839) (26.45) 146,791 39.44
Net Earnings Per Share - - .02 40.00
</TABLE>
10
<PAGE>
The following table represents the changes [increase/(decrease)]
in operating revenues, operating income and earnings from continuing
operations before income taxes by the respective industry segments
when compared to the previous period:
<TABLE>
Three Months Ended Six Months Ended
January 31, 1995 January 31,1995
Increase Increase
(Decrease) Percent (Decrease) Percent
Operating Revenues:
<S> <C> <C> <C> <C>
Electric $(103,830) (19.77) $ 225,174 44.68
Defense electronics 157,244 29.94 (189,444) (37.59)
Gas (80,641) (15.36) (150,466) (29.85)
Metal fabrication (386,280) (73.56) (396,922) (78.76)
Plastics (111,622) (21.25) 7,670 1.52
$(525,129) 100.00 $(503,988) 100.00
Operating Income (Loss):
Electric $(228,380) (43.19) $(132,354) (43.87)
Defense electronics (17,642) (3.34) (246,729) (81.78)
Gas (128,484) (24.30) (154,434) (51.19)
Metal fabrication 40,396 7.64 400,741 132.83
Plastics (194,610) (36.81) (168,906) (55.99)
(528,720) 100.00 (301,682) 100.00
General Corporate (81,384) (194,505)
Other Income (Expense) 562,265 642,978
Earnings from Continuing
Operations Before Income
Taxes $ (47,839) $ 146,791
</TABLE>
11
<PAGE>
Electrical revenues were down slightly for the three months ended
January 31, 1995 by $103,830, however, remained up by $225,174 for the
six months ended January 31, 1995. Gross margins for the three months
declined significantly by 5.22% to 18.44% as result of the sale of the
heating division with the additional costs associated with lay-offs
and other operating costs. For the six months, the gross margins
decline was 3.22% to 20.52%, which was partially offset by a decline
of 1.82% in selling, general and administrative expenses. Gross
margins and operating income should improve during the third quarter
reflecting the changes made as result of the sale of the heating
division of Stelpro. A gain of approximately $615,000 is reflected in
other income from this sale for the three and six months ended January
31, 1995.
Defense electronics revenues for the quarter ended January 31,
1995 amounted to $1,507,793 with operating losses of $235,394. This
compares with revenues of $1,350,549 and operating losses of $217,752
for the quarter ended January 31, 1994. Revenues for the six months
ended January 31, 1995 amounted to $3,298,075 with operating losses of
$138,796. This compares with revenues of $3,487,519 and operating
income of $107,933 for the six months ended January 31, 1994. Gross
margins declined for the current six month period by 5.33% to 42.57%,
reflecting the more competitive nature of current defense work.
Selling, general and administrative expenses as a percentage of the
declining revenues grew by 1.98% to 46.78%. During February 1995
steps were taken to reduce the aggregate selling, general and
administrative expenses to better match the lower than anticipated
revenues. With the declining defense market this segment is actively
seeking to expand its customer base and build on its foundation of
business with Texas Instruements Incorporated.
Gas revenues declined by $80,641 and $150,466 for the three and
six months ended January 31, 1995. Operating income declined by
$128,484 and $154,434 for the three and six months ended January 31,
1995, resulting in operating income of $56,092 and $21,578,
respectively. This decline in operating income was the result of
poorer margins of 46.36% and 45.18% and increases in selling, general
and administrative expenses of 7.28% to 40.09% and 5.67% to 43.80% of
revenues, respectively. The declining gross margins were the result
of changes in product mix, between odorization systems and lower
margin chart drives. Selling, general and administrative expenses
increased substantially due to additions to technical staff and salary
increases based on higher expected revenues which have not yet
materialized. The warmer than usual winter 1995 conditions have also
had an unfavorable effect on revenues do to declining gas company
purchases.
Metal fabrication revenues after remaining relatively unchanged
for the first quarter of fiscal 1995, decreased by $386,280 or 10.15%,
netting to a decrease of $396,922 or $7,007,426 for the six months
ended January 31, 1995. Gross margins after having improved
substantially during the first quarter of fiscal 1995 were adjusted
backwards by a decrease of 2.66% to 18.96% for the six months ended
January 31, 1995. Selling, general and administrative expenses
declined substantially due to an one time adjustment of approximately
$280,000 in commission owed to its manufacturer representative.
Overall operating profits improved by $400,747 to $819,593 for the six
months ended January 31, 1995. In February 1995, a new painting
operation was purchased for this segment.
12
<PAGE>
Plastics revenues decreased by $111,622 and increased by $7,670
for the three and six months ended January 31, 1995, respectively.
With revenues remaining relatively unchanged for the six months ended
January 31, 1995, operating profits declined substantially by $194,610
and $168,906 for the three and six months then ended. The major
decreases in operating profits are due to declining margins, changes
in sales product mix, and production problems with one of the molding
machines. Selling, general and administrative expenses increased due
to personnel changes requiring some duplicate personnel during
training for the transition. The product mix has shifted to the
molding side which has lower margins than the forming business.
With the exception of expense relationships discussed above in
the specific segment discussion, such other relationships remain
consistent. Operating profits decreased by 1.22%, the effect of lower
margins, 2.49%, discussed above and improved selling, general and
administrative expense, 1.27%, for the six months ended January 31,
1995. Net earning increased by 64.89% due to gain included in other
income (See electrical segment discussion) for the six months ended
January 31, 1995.
Liquidity and Capital Resources
Liquidity. Current assets of the Company totaled $17,324,530 at
January 31, 1995, down from current assets of $19,305,576 at July 31,
1994, or a decrease of $1,981,046, primarily reflecting the sale of
heating inventory. Current liabilities decreased by $1,801,616,
resulting in a slight decrease in working capital (current assets less
current liabilities) to $4,070,734 at January 31, 1995, from
$4,250,164 at July 31, 1994. The Company believes that is operations
will generate cash sufficient to meet its working capital requirements
and debt obligations.
As result of the sale of the heating division assets of Stelpro,
Stelpro and Hydel renegotiate its working capital line-of-credit with
a Canadian bank in the amount of $3,000,000. The Canadian credit
facility is secured by the remaining receivables, inventories and
equipment of Stelpro and Hydel.
The Company received $1,000,000 in proceeds from an SBA mortgage
loan which was funded on September 23, 1994. Such proceeds were added
to working capital.
On January 3, 1995, the Company closed the purchase of its new
building for Logic with a $2,000,000 ten year, twenty year amortization,
mortgage loan from a institutional investor.
The Company has repaid approximately $720,000 in advances made by
its affiliates since August 1, 1994.
Substantially all of the Company's assets, including certificates
of deposit are pledged as collateral for the Company's long-term and
short-term indebtedness.
13
<PAGE>
Capital Expenditures
For Fiscal 1995, the Company (and its subsidiaries) does not
anticipate any significant capital expenditures, other than in the
ordinary course of replacing worn-out or obsolete machinery and
equipment utilized by its subsidiaries.
Dividend Policy
No cash dividends have been declared by the Company's Board of
Directors since the Company's inception. The Company does not
contemplate paying cash dividends on its common stock in the
foreseeable future since it intends to utilize it cash flow to invest
in its businesses.
Other Business Matters
Accounting for Post-Retirement Benefits. The Company provides no
post-retirement benefits; therefore, FASB No. 106 will have no impact
on the Company's financial position or result of operations.
Inflation. The Company does not expect the current effects of
inflation to have any effect on its operations in the foreseeable
future. The largest single impact affecting the Company's overall
operations is the general state of the economy and principally the
home construction sector.
14
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
American Brass, Inc. (ABI) discontinued its operation in January
1993 and is involved in several lawsuits arising principally out of
secured and unsecured creditors' claims against ABI. Under most of
these cases the courts have awarded judgements against ABI for the
amounts owed such creditors plus costs. Although ABI has not declared
bankruptcy, there are insufficient assets to satisfy any of the
unsecured creditor claims. The secured creditor currently is owed
approximately $1,450,000; however, there are remaining assets which
could be sufficient enough to satisfy its claim. Superior is the
guarantor of this debt to the secured creditor. Accordingly, if there
were insufficient assets to satisfy its claim, the Company could be
liable for this deficiency. Effective March 23, 1995, the United
States District Court for the Northern District of Georgia will enter
a summary judgement in the amount of approximately $1,449,000 in favor
of the secured lender against Superior Technology, Inc., a wholly-
owned subsidiary of the Company and which is now being appealed prior
to the effective date. In addition, ABI is suing the lender and
others for interfering with the Environmental Protection Agency
agreement made by ABI relating to its inventory of "Ball Mill Residue"
and claiming damages in excess of $2,000,000 which could offset said
judgement. This summary judgement is not reflected on the books of
the Company. The Company believes that a settlement can be achieved
with the secured lender for an amount less than the judgement.
Further, that there are assets available which if sold could reduce
the exposure of the guarantor, Superior. We are currently unable to
reasonable estimate the effect of the judgement on the Company.
The Company and its subsidiaries are involved in various routine
litigation incident to its business operations. Management does not
believe that any of such litigation will have a material adverse
effect on the consolidated financial position of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) None
(b) Reports on Form 8-K.
None
15
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
ELECTRIC & GAS TECHNOLOGY, INC.
/s/ Edmund W. Bailey
Edmund W. Bailey
Vice President and
Chief Financial Officer
Dated: March 15, 1995
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JAN-31-1995
<CASH> 592730
<SECURITIES> 0
<RECEIVABLES> 5597015
<ALLOWANCES> 0
<INVENTORY> 11051503
<CURRENT-ASSETS> 17324530
<PP&E> 10017654
<DEPRECIATION> 0
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