SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A-1
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended March 31, 1997 Commission File Number 0-14840
BERES INDUSTRIES, INC.
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(Name of Small Business Issuer in its charter)
New Jersey 22-1661772
___________________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1785 Swarthmore Avenue, Lakewood, New Jersey 08701
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (908) 367-5700
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.02 Par Value
___________________________________________________________________________
(Title of Class)
Check whether the issuer: (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 theRegistrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days. Yes X No __ .
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of Registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB X
The issuer's revenues for its most recent fiscal year were
$3,681,000.
The aggregate market value of the voting stock held by
non-affiliates of the Registrant was approximately $873,908 on
July 14, 1997 based on the last available bid quotation ($.10) at
the close of the market on that day. For the purposes of the
foregoing sentence, the term "affiliate" includes each director
and officer of the Registrant.
The number of shares outstanding of the Registrant's common stock
on July 14, 1997 was 12,411,934. Documents Incorporated By
Reference - See Item 14(c) to this Form 10-KSB.
Note: This Form 10-KSB/A-1 has been filed to correct a typographical error in
Item 6, Management's Discussion & Analysis of Financial Condition and Results
of Operations. The table summarizing net sales and operating income (loss)
by segment for the year ended March 31, 1997 should have indicated Net Income
(Loss) of $ (40,000) and not $40,000, as previously reported.<PAGE>
Item 6. Management's Discussion & Analysis of Financial
Condition and Results of Operations:
This analysis of the Company's financial condition, capital
resources and operating results should be reviewed in conjunction
with the accompanying Financial Statements, including the notes
thereto.
The Company believes that an understanding of its operating
results requires an analysis into its business segments.
Athenia designs, manufactures and assembles precision
engineered injection molds for the manufacture of molded plastic
products and parts for both its internal operations as well as
for sale to outside customers.
Custom Molding consists of the Company's injection molding
operations, including ribbon cartridge kits or components, both
to outside customers in the ribbon industry and to the Company's
finished ribbon cartridge segment, and custom contract molded
products to plastic product manufacturers.
The Finished Ribbon cartridge segment manufactures computer
printer and electronic typewriter ribbon cartridges for sale
primarily to OEM printer manufacturers and ribbon industry co-
manufacturers.
The following tables summarize net sales and operating
income (loss) by segment.
Year Ended March 31,
1997 1996
(Dollars in Thousands)
Sales
Athenia $ 519 $ 351
Custom Molding 2,433 2,507
Finished Ribbons 729 1,125
Discontinued Segment
(Audio Cassettes) 0 4
Total Sales $3,681 $3,987
Operating Income (Loss)
Athenia $ (135) $(179)
Custom Molding 342 290
Finished Ribbons (161) (146)
Discontinued Segment (Audio
Cassettes) (79) (47)
Total Operating Income (Loss) $ (33) $ (82)
Investment Expense $ (111) $ (122)
Interest and Other Income 101 53
Gain on Sale of Joint Venture 0 22
Gain on Sale of Equipment ( 5) 26
Discontinued Segment (Audio
Cassettes) 8 0
Net Income (Loss) $ (40) $ (103)
The Company's total net sales for the fiscal year ended March 31,
1997 were $3,681,000, a decrease of $306,000 or 7.7% from the
year ended March 31, 1996. For the 1997 fiscal year, the Company
posted a net loss of $(40,000), as compared to net loss of
$(103,000) for the fiscal year ended March 31, 1996.
Athenia's sales increased $168,000 to $519,000 for the
fiscal year ended March 31, 1997, as compared to the 1996 fiscal
year. During the 1997 period, Athenia incurred an operating loss
of $(135,000) as compared to an operating loss of $(179,000) for
the fiscal year ended March 31, 1996. The increase in sales is
the result of an increase in demand and orders realized for the
Company's tooling services during 1997. The decrease in
operating loss for this segment is primarily the result of the
increase in gross profit dollars realized as a result of the
sales increase. The Company has recently employed additional
commissioned sales representatives in this area, resulting in an
increase in quotation requests and firm orders received for
tooling from new customers. Management is hopeful that sales for
Athenia will remain at current levels or higher and result in a
lowering of the operating loss during the current fiscal year.
Custom Molding sales decreased $74,000 or 3.0% to $2,433,000
during the fiscal year ended March 31, 1997, as compared to the
year ended March 31, 1996. This segment produced operating
income of $342,000 for the 1997 period, as increase of $52,000 or
17.9% over that for the fiscal year ended March 31, 1996. The
decease in sales is primarily the result of a key customer
electing to bring its molding work in-house. The increase in
operating income is the result of both product mix and improved
manufacturing efficiencies in this area. During the current
quarter, the Company is experiencing a further slowdown in sales
for custom molding services due to a decrease in demand from
certain customers. Management is intensifying its efforts to
secure additional customers and increase sales and remains
hopeful that higher sales levels for custom molded products will
be attained. In the interim, Management is attempting to control
costs in order to minimize any affect a decrease in sales may
have on opeating income.
Finished Ribbon cartridge sales decreased $396,000 or 35.2%
during fiscal year ended March 31, 1997 as compared to the prior
year. This segment produced an operating loss of $(161,000)
during the most recent fiscal year as compared to an operating
loss of $(146,000) during the year ended March 31, 1996. The
decrease in sales is primarily the result of a shrinking market
for impact printer ribbon products which are losing market share
to the newer ink jet and laser printers that do not use ribbons.
The increase in loss is the result of the lower sales level and
lower selling prices caused by increased competition. Management
is now concentrating its efforts on controlling costs in this
segment to improve profit margins and concentrating its sales
efforts on certain niche markets in the industry. It is not
possible at this time to determine if these efforts will reverse
the trend of this segment during the current fiscal year.
Discontinued Segment - Audio Cassette sales were $0 during
the fiscal year ended March 31, 1997. As discussed in previous
filings, Audio Cassette production was suspended during 1994 due
to losses resulting from low selling prices caused by an industry
over supply situation and intense foreign competition. On August
1, 1996, the Company adopted a plan to withdraw from the
production of Audio Cassettes and discontinue operations. This
resulted in a net loss from discontinued operations of $(71,000)
for the fiscal year ended March 31, 1997. See Notes 2 and 4 to
the Consolidated Financial Statements for further explanation.
Contract Costs and Costs of Goods Sold varies based upon
sales volume and product mix. Cost of sales decreased to 77%
during the year ended March 31, 1997 from 80.2% during fiscal
year 1996. This cost decrease and resultant increase in gross
profit is primarily the result of better margins in the custom
molding segment and the decrease in the depreciation expense
during fiscal year 1997 as well as Management's continued efforts
to control manufacturing costs and improve production
efficiencies.
Selling, General and Administrative Expenses decreased
$23,000 to $800,000 during fiscal year ended March 31, 1997 as
compared to 1996. This decrease is primarily the result of an
decrease in legal fees associated with the bank litigation which
was settled last year, lower freight changes as a result of the
lower sales level and a decrease in insurance premiums during
1997.
Interest and Other Income increased approximately $30,000 to
$101,000 during fiscal year ended March 31, 1997 as compared to
1996. This increase is primarily the result of a settlement of
$50,000 which was received in January 1997 from a customer who
breached a custom molding contract.
Interest Expense decreased approximately $11,000 to $111,000
during 1997 fiscal year as compared to fiscal 1996. This
decrease is primarily the result of the repayments of net
borrowings.
Gain on Sale of Equipment for fiscal 1997 was a loss of
approximately $(5,000) which was the net effect of selling
certain assets relative to their net book value.
Net Income (Loss) for the fiscal year ended March 31, 1997
was $(40,000) as compared to $(103,000) during the similar 1996
period. Operationally, the Company provided income of $46,000
for the fiscal year ended March 31, 1997 as compared to an
operating loss of $(36,000) for fiscal 1996. This improvement in
both the operating income and net income results for fiscal 1997
despite the 7.7% decrease in sales is due primarily to the
improvement in gross margin in the custom molding segment and
Management's continued efforts to control costs and improve
production efficiencies.
LIQUIDITY AND CAPITAL RESOURCES AND MATERIAL CHANGES IN FINANCIAL
CONDITION
Operating Activities
For the fiscal year ended March 31, 1997 the Company
generated/income from continuing operations of $31,000.
Additionally, the Company provided net cash from operating
activities of $337,000 which more than covered the principal
payments on long term debt of $(219,000) and capital leases of
$(61,000). Included in the long term debt payments was a one
time lump sum payment of $107,000 on the building mortgage which
was made in July 1996 as part of the settlement of the lawsuit
against the Company's lender. Management is of the opinion that
operations during the coming year will generate sufficient cash
flows to service scheduled debt repayments.
Financing Activities and Liquidity
The Company had a working capital of approximately $909,000 at
March 31, 1997 as compared to a working capital of $850,000 at
March 31, 1996. The Company's cash and cash equivalents
increased to $701,000 at March 31, 1997 from $377,000 at March
31, 1996. Approximately $268,000 of this improvement is the
result of the freeing up of restricted cash as part of the bank
lawsuit settlement with the Company's lender. The balance was
the result of the improvement in operations for fiscal 1997 as
compared to 1996. The Company's current ratio is approximately
2.97 and the Company is within term on all of its obligations.
Additionally, the Company has significant free assets on which to
borrow if the need should arise.
Scheduled debt repayments are expected to be met by operating
cash flows. If necessary additional cost cutting measures will
also be instituted.
Achieving a return to growth and profitability will require the
Company to overcome uncertainties which it now faces, namely, the
weakening markets for the Company's proprietary impact ribbon
product line and the strenghthening of its sales and marketing
clout in the custom molding industry. Management is continuing
to evaluate the possibility of raising capital to invest in new
products and/or markets and also seeking out strategic partners
that could align with the Conpany and utilize the Company's
capabilities. The success of accomplishing either of these
avenues is not determinable at this time. Management will
continue its efforts to increase sales and improve cost controls.
Absent any unanticipated operating expenses or a significant
downturn in the economy, Management is hopeful for an improvement
in long term operating results.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BERES INDUSTRIES, INC (Registrant)
By: /s/ Charles Beres, Jr.
CHARLES BERES, JR., Chief
Executive Officer, President,
Treasurer, Chief Financial
Officer, Director
Date: July 31, 1997
