SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------------------------
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
Commission File No. 0-20097
ADVANCED MACHINE VISION CORPORATION
A California Corporation
IRS Employer Identification No. 33-0256103
3709 Citation Way #102
Medford, OR 97504
Telephone: 541-776-7700
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 |_|
On March 31, 2000, registrant had 12,879,084 shares of Class A Common Stock, and
47,669 shares of Class B Common Stock, all no par value, issued and outstanding.
Exhibit Index at Page 16
<PAGE>
Index
Page Number
-----------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets......................................1
Consolidated Statements of Operations............................2
Consolidated Statement of Shareholders' Equity...................3
Consolidated Statements of Cash Flows............................4
Notes to Unaudited Consolidated Financial Statements.............5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...........................9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K................................16
Signature.......................................................20
<PAGE>
PART I. FINANCIAL INFORMATION
-----------------------------
Item 1. Financial Statements
- --------------------------------------------------------------------------------
Advanced Machine Vision Corporation
Consolidated Balance Sheets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
(unaudited) (audited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,298,000 $ 5,889,000
Accounts receivable, net of allowance for doubtful
accounts of $205,000 at March 31, 2000 and
December 31, 1999 2,687,000 1,601,000
Inventories (Note 6) 8,572,000 8,399,000
Prepaid expenses 218,000 206,000
Current deferred tax asset 870,000 870,000
------------- -------------
Total current assets 14,645,000 16,965,000
Property, plant and equipment - net 4,713,000 4,860,000
Intangible assets, net 3,995,000 4,175,000
Deferred tax asset 1,230,000 1,230,000
Other assets 722,000 790,000
------------- -------------
$ 25,305,000 $ 28,020,000
============= =============
LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK
AND NON-REDEEMABLE SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,375,000 $ 937,000
Short-term borrowings (Note 3) -- 2,000,000
Accrued liabilities 638,000 388,000
Customer deposits 1,917,000 1,569,000
Accrued payroll 665,000 714,000
Warranty reserve 351,000 373,000
Current portion of notes payable (Note 3) 43,000 43,000
------------- -------------
Total current liabilities 4,989,000 6,024,000
------------- -------------
Notes payable to related parties, less current portion 2,500,000 2,500,000
Notes payable, less current portion 3,784,000 3,794,000
------------- -------------
Total notes payable 6,284,000 6,294,000
------------- -------------
Commitments and contingencies Mandatorily redeemable preferred stock:
Series B - No par value; 119,106 shares authorized and outstanding
at March 31, 2000 and December 31, 1999
(aggregate liquidation preference of $2,620,000) 2,579,000 2,579,000
------------- -------------
Non-redeemable shareholders' equity:
Common stock:
Class A and B - No par value; 63,000,000 shares authorized;
12,927,000 and 12,970,000 shares issued and outstanding
at March 31, 2000 and December 31, 1999, respectively 26,053,000 26,103,000
Additional paid in capital 5,020,000 5,020,000
Accumulated deficit (19,596,000) (18,007,000)
Accumulated other comprehensive income (24,000) 7,000
------------- -------------
Total non-redeemable shareholders' equity 11,453,000 13,123,000
------------- -------------
$ 25,305,000 $ 28,020,000
============= =============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
Advanced Machine Vision Corporation
Consolidated Statements of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
---- ----
(unaudited)
<S> <C> <C>
Net sales $ 5,388,000 $ 5,158,000
Cost of sales 2,822,000 2,504,000
------------ ------------
Gross profit 2,566,000 2,654,000
------------ ------------
Operating expenses:
Selling and marketing 1,422,000 947,000
Research and development 1,253,000 1,260,000
General and administrative 1,191,000 794,000
Amortization of intangible assets 180,000 180,000
------------ ------------
4,046,000 3,181,000
Income (loss) from operations before other income and expense (1,480,000) (527,000)
Other income and expense:
Investment and other income 59,000 67,000
Interest expense (168,000) (140,000)
------------ ------------
Income (loss) before income taxes (1,589,000) (600,000)
Provision for (benefit from) income taxes -- (24,000)
------------ ------------
Net income (loss) $ (1,589,000) $ (576,000)
============ ============
Earnings (loss) per share (Note 5):
Basic $ (0.13) $ (0.05)
=========== ============
Diluted $ (0.13) $ (0.05)
=========== ============
Shares used in per-share calculations:
Basic 12,285,000 11,520,000
============ ============
Diluted 12,285,000 11,520,000
============ ============
</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
Advanced Machine Vision Corporation
Consolidated Statements of Mandatorily Redeemable Preferred Stock and
Non-Redeemable Shareholders' Equity (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Non-Redeemable Shareholders' Equity
-----------------------------------------------------------------
Mandatorily Redeemable
Preferred Stock Accumulated
Series B Common Stock Additional Other
---------------------- ------------------- Paid in Accumulated Comprehensive Comprehensive
Shares Amount Shares Amount Capital Deficit Income (Loss) Income (Loss)
------ ------ ------ ------ ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
December 31,
1999 119,106 $ 2,579,000 12,970,000 $ 26,103,000 $ 5,020,000 $(18,007,000) $ 7,000
Repurchase of
Common Stock -- -- (43,000) (50,000) -- -- --
Translation
adjustment -- -- -- -- -- -- (31,000) (31,000)
Net loss -- -- -- -- -- (1,589,000) -- (1,589,000)
--------- ----------- ------------ ------------ ------------ ------------ ------------- -----------
Balance,
March 31, 2000 119,106 $ 2,579,000 12,927,000 $ 26,053,000 $ 5,020,000 $(19,596,000) $ (24,000)
========= =========== ============ ============ ============ ============ =============
Comprehensive loss $(1,620,000)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
Advanced Machine Vision Corporation
Consolidated Statements of Cash Flows
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
---- ----
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (1,589,000) $ (576,000)
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 371,000 373,000
Changes in assets and liabilities:
Accounts receivable (1,086,000) 35,000
Inventories (173,000) (447,000)
Prepaid expenses and other assets 56,000 119,000
Accounts payable, accrued liabilities, customer
deposits, accrued payroll and warranty reserve 965,000 (89,000)
------------ ------------
Net cash used in operating activities (1,456,000) (585,000)
------------ ------------
Cash used in investing activities:
Purchases of property and equipment (55,000) (22,000)
------------ ------------
Net cash used in investing activities (55,000) (22,000)
------------ ------------
Cash used in financing activities:
Notes payable to bank and others, net (2,010,000) (759,000)
Repurchase of common stock (50,000) --
------------ ------------
Net cash used in financing activities (2,060,000) (759,000)
------------ ------------
Effect of exchange rate changes on cash (20,000) --
------------ ------------
Net (decrease) in cash (3,591,000) (1,366,000)
Cash and cash equivalents, beginning of the period 5,889,000 4,423,000
------------ ------------
Cash and cash equivalents, end of period $ 2,298,000 $ 3,057,000
============ ============
</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
<PAGE>
ADVANCED MACHINE VISION CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Note 1. Principles of Consolidation
- ------- ---------------------------
In the opinion of the management of Advanced Machine Vision Corporation (the
"Company" or "AMV"), the accompanying consolidated financial statements, which
have not been audited by independent accountants (except for the balance sheet
as of December 31, 1999), reflect all adjustments (consisting of normal
recurring accruals) necessary to present fairly the Company's financial position
at March 31, 2000, and December 31, 1999, the results of operations for the
three-month period ended March 31, 2000 and cash flows for the three-month
period ended March 31, 2000. The financial statements include the accounts of
the Company and its four wholly-owned subsidiaries, Applied Laser Systems, Inc.,
SRC VISION, Inc. ("SRC"), ARC Netherlands BV and Ventek, Inc. ("Ventek"). The
Company's current operating subsidiaries are SRC and Ventek.
Certain notes and other information are condensed or omitted in the interim
financial statements presented in this Quarterly Report on Form 10-Q. These
financial statements should be read in conjunction with the Company's 1999
annual report on Form 10-K.
Note 2. Nature of Operations
- ------- --------------------
Through its subsidiaries, the Company designs, manufactures and markets
computer-aided vision defect detection and sorting and defect removal equipment
for use in a variety of industries, including food processing, wood products and
recycling. The Company's systems combine optical and mechanical systems
technologies to perform diverse scanning, analytical sensing, measuring and
sorting applications on a variety of products such as food, wood and plastic.
The Company sells its products throughout the world.
Note 3. Financing
- ------- ---------
In April 1996, the Company borrowed $3,400,000 pursuant to a convertible secured
note, $900,000 of which remains outstanding at March 31, 2000. The nominal 6.75%
interest rate may be adjusted upward on each anniversary date (April 13) of the
note if the market price of the Company's Common Stock fails to reach certain
levels. In April 2000, the interest rate was adjusted to 11.25%, the maximum
permitted under the note. The note is secured by 54% of the stock of ARC
Netherlands BV. The note is convertible into the Company's Common Stock at
$2.125 per share.
In July 1996, AMV issued the following notes in connection with the acquisition
of Ventek: (i) a 6.75% $1,000,000 note due July 23, 1999; (ii) a 6.75%
$2,250,000 note due July 23, 1999 convertible into the Company's Common Stock at
$2.25 per share; and (iii) a $1,125,000 note and stock appreciation rights
payable (a) by issuance of up to 1,800,000 shares of Common Stock or at the
Company's option, in cash on July 23, 1999, or (b) solely in cash in the event
AMV Common Stock is delisted from the Nasdaq Stock Market. The $1,125,000 note
and stock appreciation rights payable were valued at $1,529,000 on the
acquisition date based upon an independent appraisal received by the Company.
All three notes are secured by all of the issued and outstanding shares of
Ventek.
In February 1999, the Ventek notes were restructured. $750,000 of the $1,000,000
note was prepaid. The maturity dates of the remaining $250,000 and the
$2,250,000 note were extended to July 23, 2000. The $1,125,000 note was paid in
full by delivery of 1,800,000 restricted shares and the stock appreciation
rights were cancelled.
In December 1999, the Ventek notes were again restructured by extending the due
dates to July 23, 2001 and increasing the interest rate by 1% to 7.75%.
As of December 31, 1999 and March 31, 2000, the Company had a borrowing facility
with a commercial bank that provided for a secured operating line of credit up
to $2,000,000. At the option of the Company, interest is stated at the prime
rate plus .50% or at an "offshore rate" plus 2.35%. The Business Loan Agreement
governing the line of credit contains covenants requiring certain levels of cash
flow, tangible equity and working capital. At December 31, 1999, the Company had
borrowed the entire $2,000,000 under the line and was not in compliance with the
cash flow covenant. The bank waived compliance with the covenant subject to an
amendment being executed by the Company, which would require that security for
the line be changed from receivables, inventory and machinery and equipment to
cash instruments. On February 29, 2000, the Company executed the amendment and
paid back the entire amount borrowed. On April 25, 2000, the expiration date of
the line was extended from April 30, 2000 to July 31, 2000.
A $2.9 million mortgage note contains certain covenants and restrictions
including limitations on incurrence of debt. At December 31, 1999, the Company
was in violation of the cash flow covenant of the mortgage loan agreement. The
Company has obtained a temporary waiver of this covenant through December 31,
2000.
Note 4. Equity Transactions; Reduction in Outstanding Securities;
Effect of Remaining Warrants, Options and Convertible Securities;
Stock Rights Plan
- ------- -----------------------------------------------------------------
In October 1998, the Company sold 119,106 shares of Mandatorily Redeemable
Series B Preferred Stock ("Preferred Stock") to FMC Corporation ("FMC") for
$2,620,000. The Preferred Stock is convertible into 1,191,000 shares of Common
Stock, which, if converted, represents a 10% ownership position based on the
number of common shares outstanding on the transaction date. Each share of
Preferred Stock is allowed ten votes in matters placed before the common
stockholders except in the election of directors, in which case FMC has the
right to elect one director. The Preferred Stock pays no dividends. The
Preferred Stock has a $22 per share liquidation preference. Upon the occurrence
of a change in control (as defined), FMC has the right to require the Company to
repurchase all or part of the Preferred Stock at a price in cash equal to the
greater of (a) $22.00 per share or (b) the market value of the Company's Common
Stock issuable upon conversation of the Preferred Stock, calculated as the
average of the closing bid price of the Common Stock for the 45 consecutive
trading days immediately preceding the date of repurchase, subject to the
Company's ability to legally do so under California General Corporation Law. FMC
also has a five-year one-time option to purchase a number of shares of Common
Stock equal to 15% of the shares outstanding on the exercise date at a price
equal to the greater of the then-current market value of the Common Stock (as
defined) or $2.20 per share.
So long as any shares of Preferred Stock are outstanding, the Company must
obtain the consent of the holders of a majority of the then-outstanding shares
of Preferred Stock to (i) take any action which adversely alters or changes or
may adversely alter or change the rights, preferences or privileges of the
Preferred Stock; (ii) increase or decrease the authorized number of shares of
Preferred Stock; (iii) create (by reclassification or otherwise) any class or
series of shares having rights, preferences or privileges senior to or on a
parity with the Preferred Stock; (iv) redeem or repurchase any shares of capital
stock except in certain instances; (v) merge with or into any other entity or
enter into any other corporate reorganization, recapitalization, sale of control
or any transaction that, directly or indirectly, results in the sale, license,
lease, transfer, conveyance or other disposition of all or substantially all of
the assets or properties of the Company; (vi) sell, license, lease, transfer,
convey or otherwise dispose of the Company's intellectual property in which FMC
received a security interest; (vii) amend or waive any provision of the
Company's Articles of Incorporation or By-laws; (viii) acquire assets or
securities of another person or entity if the aggregate consideration paid in
all such transactions (other than those in the ordinary course of business)
combined exceeds $2,000,000 or any one such transaction exceeds $500,000; (ix)
issue any additional equity securities or any other securities convertible or
exchangeable into equity securities (other than issuance of shares of Common
Stock pursuant to employee stock options or other employee stock plans in effect
as of the FMC transaction date and, with the approval of the Board of Directors,
shares of Common Stock to unrelated third parties, in arms-length transactions
that do not exceed 100,000 shares for any fiscal year); or (x) approve the
liquidation, dissolution or winding up of the Company.
The provisions of the preferred stock also provide that if FMC desires to
transfer the preferred stock, the Company has the right of first refusal to
acquire such shares. For as long as the preferred stock is outstanding, if the
Company intends to issue equity securities other than to FMC, or as permitted,
FMC shall have the right to acquire a portion of such securities to retain its
percentage ownership immediately prior to such issuance.
In January 1997, the 1997 Restricted Stock Plan ("1997 Plan") was established to
retain the services of selected employees, officers and directors of the Company
and provide them with strong incentives to enhance the Company's growth. The
total number of shares of Common Stock issuable under the 1997 Plan shall not
exceed 2,000,000. Under the 1997 Plan, there are currently 650,000 shares issued
to seven key employees of the Company. The shares cannot be traded or
transferred unless a payment of $.75 to $1.80 per share is made by the employee
to AMV. If the payment is not made, the stock will be forfeited and returned to
the Company.
In January 2000, the Company purchased 42,800 shares of its Common Stock on the
open market.
Schedule of Outstanding Stock, Warrants and Potential Dilution: The following
table summarizes, as of March 31, 2000, outstanding common stock, potential
dilution to the outstanding common stock upon conversion of convertible debt or
preferred stock, and proforma proceeds or debt reduction from the exercise or
conversion. The table also sets forth the conversion prices and debt due dates.
<TABLE>
<CAPTION>
Number or Principal Common Exercise or Proforma
Amount Outstanding Stock After Conversion Debt
Security at March 31, 2000 Conversion Price Reduction
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Outstanding Common Stock 12,927,000
Convertible Debt (due date):
6.75% Notes (4/16/01) $ 900,000 423,000 2.13 900,000
6.75% Ventek Note (7/23/01) $ 2,250,000 1,000,000 2.25 2,250,000
------------
Convertible Preferred Stock 119,100 1,191,000
------------
Potentially outstanding shares
and proforma proceeds
or reduction of debt 15,541,000 $ 3,150,000
============ ============
</TABLE>
The proforma amounts above are for illustrative purposes only. Unless the market
price of AMV's Common Stock rises significantly above the conversion prices, it
is unlikely that the debt or Preferred Stock will be converted.
In addition to the FMC option described above, on March 31, 2000, AMV had
outstanding options to purchase 3,164,000 shares of Common Stock, 2,632,000 of
which are under its stock option plans.
The existence of these outstanding options, convertible debt and preferred
stock, including options that may be granted under AMV's Stock Option Plans or
otherwise, could adversely affect AMV's ability to obtain future financing. The
price which AMV may receive for the Common Stock issued upon exercise of
options, or amount of debt forgiven in the case of conversion of debt, may be
less than the market price of Common Stock at the time such options are
exercised or debt is converted. For the life of the options, convertible debt
and preferred stock, the holders are given, at little or no cost, the
opportunity to profit from a rise in the market price of their Common Stock
without assuming the risk of ownership. Moreover, the holders of the options
might be expected to exercise them at a time when AMV would, in all likelihood,
be able to obtain needed capital by a new offering of its securities on terms
more favorable than those provided for by the options.
Stock Rights Plan: In February 1998, the Company implemented a stock rights
program. Pursuant to the program, stockholders of record on February 27, 1998
received a dividend of one right to purchase for $15 one one-hundredth of a
share of a newly created Series A Junior Participating Preferred Stock. The
rights are attached to AMV's Common Stock and will also become attached to
shares issued in the future. The rights will not be traded separately and will
not become exercisable until the occurrence of a triggering event, defined as an
accumulation by a single person or group of 20% or more of AMV's Common Stock.
The rights will expire on February 26, 2008 and are redeemable at $.0001 per
right.
After a triggering event, the rights will detach from the Common Stock. If AMV
is then merged into, or is acquired by, another corporation, the Company has the
opportunity to either (i) redeem the rights or (ii) permit the rights holder to
receive in the merger stock of AMV or the acquiring company equal to two times
the exercise price of the right (i.e., $30). In the latter instance, the rights
attached to the acquirer's stock become null and void. The effect of the rights
program is to make a potential acquisition of the Company more expensive for the
acquirer if, in the opinion of AMV's Board of Directors, the offer is
inadequate.
In December 1998, the Rights Plan was amended to permit FMC to acquire up to
1,600,000 shares of AMV Common Stock on the open market without causing a
triggering event.
In February 2000, the Company's Board of Directors determined that the proposed
merger with Key Technology, Inc. ("Key") (see Note 7) will not constitute a
triggering event.
Note 5. Earnings (Loss) Per Share
- ------- -------------------------
The computation of earnings (loss) per share is presented in the following
tables:
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
------------------------------------------------------------------------
2000 1999
--------------------------------- --------------------------------
(Loss) Shares (Loss) Shares
------ ------ ------ ------
<S> <C> <C> <C> <C>
Calculation of EPS
Income (loss) available to
common shareholders $ (1,589,000) 12,935,000 $ (576,000) 11,914,000
Reduction for contingently
returnable shares as all conditions
were not met as of period end -- (650,000) -- (394,000)
------------- ------------- ------------- -------------
Income (loss) available to
common shareholders $ (1,589,000) 12,285,000 $ (576,000) 10,520,000
============= ============= ============= =============
- ----------------------------------------------------------------------------------------------------------------
Basic earnings (loss) per share $ (0.13) $ (0.05)
- ----------------------------------------------------------------------------------------------------------------
Effect of Dilutive Securities:
Stock options and warrants $ -- -- $ -- --
Convertible debt -- -- -- --
Preferred stock -- -- -- --
------------- ------------- ------------- -------------
Income (loss) available to
common shareholders and
assumed conversions $ (1,589,000) 12,285,000 $ (576,000) 11,520,000
============= ============= ============= =============
- ----------------------------------------------------------------------------------------------------------------
Diluted earnings (loss) per share $ (0.13) $ (0.05)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
The number of shares of Common Stock, along with their respective exercise
prices, underlying options, warrants, convertible debt and preferred stock,
which were excluded from the computation of diluted EPS because their exercise
prices were greater than the average market price of common stock or inclusion
of such shares would be antidilutive, are listed below.
March 31,
-----------------------------
2000 1999
------------- -------------
Number of shares of common stock
exercisable from:
Options 3,164,000 3,253,000
Warrants -- 300,000
Convertible debt 1,424,000 1,424,000
Preferred stock 1,191,000 1,191,000
------------- -------------
5,779,000 6,168,000
Exercise price ranges $0.81 - $3.00 $1.00 - $3.00
Note 6. Inventories
- ------- -----------
Inventories are stated at the lower of cost or market and include material,
labor and related manufacturing overhead. The Company determines cost based on
the first-in, first-out (FIFO) method. Inventories consisted of:
March 31, Dec. 31,
2000 1999
------------- -------------
Raw materials $ 3,433,000 $ 3,034,000
Work-in-process 1,835,000 1,603,000
Finished goods 3,304,000 3,762,000
------------- -------------
$ 8,572,000 $ 8,399,000
============= =============
Note 7. Possible Sale of the Company
- ------- ----------------------------
On February 15, 2000, the Company entered into an Agreement and Plan of Merger
with Key, whereby the Company would be acquired by Key. Key is a public company
and its stock is traded on the Nasdaq National Market under the symbol "KTEC."
Pursuant to the agreement, Key would pay the following for each Company common
share:
a. Cash of $1.00.
b. 1/10 of a new share of Key convertible preferred stock that can be sold
back to Key after two years for the equivalent of $1.00.
c. 1/40 of a new warrant to purchase a share of Key common stock that can be
sold back to Key immediately for the equivalent of $.25.
The agreement specifies other terms, conditions, representations and warranties
for each party. Completion of the transaction is contingent upon approval of the
Company's common stockholders and FMC, the holder of all the Company's Preferred
Stock. On April 24, 2000, FMC reached an agreement with the Company and Key to
vote for the merger.
As part of the acquisition process, a Form S-4 registration statement has been
filed by Key with the Securities and Exchange Commission ("SEC"). Completion of
the transaction, which is subject to SEC and other approvals as indicated above,
is expected by July 2000. Reference is made to the Company's recent filings with
the SEC for a more complete description of the transaction.
Note 8. New Accounting Pronouncements
- ------- -----------------------------
In June 1998, the FASB issued SFAS 133, Accounting for Derivative Instruments
and Hedging Activities. SFAS 133 establishes new accounting treatment for
derivatives and hedging activities and supercedes and amends a number of
existing accounting standards. For the Company, this pronouncement, as amended
by SFAS 137, will be effective in 2001 and is not anticipated to have a material
effect on the consolidated financial statements.
In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition, which provides
guidance on the recognition, presentation and disclosure of revenue in financial
statements filed with the SEC. SAB 101 outlines the basic criteria that must be
met to recognize revenue and provides guidance for disclosures related to
revenue recognition policies. The Company believes that the impact of SAB 101
will not have a material effect on the consolidated financial statements.
Note 9. Subsequent Event
- ------- ----------------
In May 2000, the Company entered into an agreement to sell its minority
investment in SourceNet Corporation, an early-stage communications company, for
approximately $1.6 million, which will generate a $1.3 million gain.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
- ------- ---------------------------------------------------------------
The Company's backlog at March 31, 2000 was $4,102,000 compared to $5,645,000 as
of March 31, 1999.
Results of Operations - Comparison between three months ended March 31, 2000 and
March 31, 1999
- --------------
Sales for the three months ended March 31, 2000 ("Q1 2000") were $5,388,000, up
4% when compared to sales for the three months ended March 31, 1999 ("Q1 1999")
of $5,158,000. The $230,000 increase in sales is primarily due to increased
sales relating to veneer processing applications.
Gross profit decreased by $88,000 to $2,566,000 in Q1 2000 when compared to
$2,654,000 of gross profit in Q1 1999. Gross profit as a percentage of sales was
48% in Q1 2000 and 51% in Q1 1999. The decrease in gross profit as a percentage
of sales is due to a change in the product mix sold to lower margin products and
discounts granted with the introduction of new products.
Selling and marketing expense increased by $475,000 in Q1 2000 from Q1 1999 to
$1,422,000 amounting to 26% of sales in Q1 2000. Similar expenses in Q1 1999
were $947,000, or 18% of sales. The increase in selling and marketing expenses
in terms of both the dollar amount and as a percentage of sales is due to an
increase in marketing activities associated with the introduction of new
products and the penetration of new geographical areas.
Research and development expenses were $1,253,000 and $1,260,000 in Q1 2000 and
Q1 1999, or 23% and 24% of sales, respectively.
General and administrative expenses increased $397,000 to $1,191,000 in Q1 2000
from $794,000 in Q1 1999. The increase is primarily a result of $180,000 of
legal fees related to the possible merger with Key and $150,000 of stock
compensation expense. The stock compensation expense was recorded pursuant to
300,000 variable plan options granted to certain directors. The market price of
the Company's common stock exceeded the exercise price of these options at March
31, 2000.
The net loss for Q1 2000 was $1,589,000 as compared to net loss of $576,000 in
Q1 1999.
Liquidity and Capital Resources
- -------------------------------
The Company's cash balance and working capital were $2,298,000 and $9,656,000,
respectively, at March 31, 2000 as compared to $5,889,000 and $10,941,000,
respectively, at December 31, 1999.
During Q1 2000, net cash used in operating activities totaled $1,456,000
compared to cash used for operating activities of $585,000 in Q1 1999. The Q1
2000 usage was due to the net loss and increases in receivables and inventories.
The Q1 1999 usage was due to the net loss and increase in inventory.
Cash used in investment activities totaled $55,000 in Q1 2000 compared to cash
used in investment activities of $22,000 in Q1 1999. The Company has no material
commitments for capital expenditures at March 31, 2000.
Cash used in financing activities totaled $2,060,000 in Q1 2000 as compared to
cash used in financing activities of $759,000 in Q1 1999. In January 2000, the
Company purchased 42,800 shares of its common stock for $50,000 on the open
market. In February 2000, the Company repaid the $2,000,000 outstanding under
its line of credit. In February 1999, the Company paid $750,000 of a $1,000,000
note and issued 1,800,000 shares of Class A Common Stock in payment of a
$1,529,000 note as part of the Ventek debt restructuring.
In October 1998, the Company received $2,620,000 from FMC Corporation for
119,106 shares of newly issued Series B Preferred Stock (see Note 4 to
Consolidated Financial Statements).
In April 1999, the Company entered into a Business Loan Agreement providing up
to $2,500,000 of working capital financing (see Note 3 to Consolidated Financial
Statements).
Management believes that the Company has sufficient cash to enable the Company
to sustain its operations and to adequately fund the cash flow expected to be
used in operating activities for the next twelve months.
Cautionary Statements and Risk Factors
- --------------------------------------
In our capacity as Company management, we may from time to time make written or
oral forward-looking statements with respect to our long-term objectives or
expectations which may be included in our filings with the Securities and
Exchange Commission, reports to stockholders and information provided in our web
site.
The words or phrases "will likely," "are expected to," "is anticipated," "is
predicted," "forecast," "estimate," "project," "plans to continue," "believes,"
or similar expressions identify "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those presently
anticipated or projected. We wish to caution you not to place undue reliance on
any such forward-looking statements, which speak only as of the date made. In
connection with the "Safe Harbor" provisions on the Private Securities
Litigation Reform Act of 1995, we are calling to your attention important
factors that could affect our financial performance and could cause actual
results for future periods to differ materially from any opinions or statements
expressed with respect to future periods in any current statements.
The following list of important factors may not be all inclusive, and we
specifically decline to undertake any obligation to publicly revise any
forward-looking statements that have been made to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events. Among the factors that could have an impact
on our ability to achieve expected operating results and growth plan goals
and/or affect the market price of our stock are:
* A history of losses and negative cash flow.
* Fluctuations in quarterly operating results and seasonality in certain of
our markets.
* Rapid technological change in our markets and the need for new product
development.
* Market acceptance of our new products.
* Our dependence on certain markets and the need to expand into new markets.
* The lengthy sales cycle for our products.
* Our highly competitive marketplace.
* The dependence on certain suppliers.
* The risks associated with dependence upon significant customers and
reliance on certain distribution channels.
* The risks associated with international sales.
* The uncertain ability to manage growth and integrate acquired businesses.
* Dependence upon key personnel.
* Our ability to protect our intellectual property.
* The possibility of product liability or other legal claims.
* Exposure to possible warranty and litigation claims.
* The possible need for additional financing.
* The impact of the 1998 Shareholder Rights Plan.
* The planned merger with Key Technology, Inc.
* Our inability or our suppliers' or customers' inabilities to remedy
potential problems with information systems related to the arrival of the
year 2000.
These risk factors are discussed in further detail below.
History of Losses; Negative Cash Flow: Prior to 1995 and in 1996 and in certain
fiscal quarters thereafter, we experienced losses and negative operating cash
flow. We believe that we may operate at a negative cash flow for certain periods
in the future due to (a) the need to fund certain development projects, (b) cash
required to enter new market areas, (c) irregular bookings by customers due to
seasonality or economic downturns in some markets and the relatively high
per-unit cost of our products which may cause fluctuations in quarterly or
yearly revenues, and (d) cash required for the repayment of debt, especially
$3.4 million due in 2001. If we are unable to consistently generate sustained
positive cash flow from operations, we must rely on debt or equity financing.
Although we achieved profitability in 1997 and 1998, there can be no assurance
as to future profitability on a quarterly or annual basis.
Fluctuations in Quarterly Operating Results; Seasonality: We have experienced
and may in the future experience significant fluctuations in revenues and
operating results from quarter to quarter as a result of a number of factors,
many of which are outside our control. These factors include the timing of
significant orders and shipments, product mix, delays in shipment, capital
spending patterns of customers, competition and pricing, new product
introductions by us or our competitors, the timing of research and development
expenditures, expansion of marketing and support operations, changes in material
costs, production or quality problems, currency fluctuations, disruptions in
sources of supply, regulatory changes and general economic conditions. These
factors are difficult to forecast, and these or other factors could have a
material adverse effect on our business and operating results. Moreover, due to
the relatively fixed nature of many of our costs, including personnel and
facilities costs, we would not be able to reduce costs in any quarter to
compensate for any unexpected shortfall in net sales, and such a shortfall would
have a proportionately greater impact on our results of operations for that
quarter. For example, a significant portion of our quarterly net sales depends
upon sales of a relatively small number of high-priced systems. Thus, changes in
the number of systems shipped in any given quarter can produce substantial
fluctuations in net sales, gross profits, and net income from quarter to
quarter. In addition, in the event our machine vision systems' average selling
price changes, the addition or cancellation of sales may exacerbate quarterly
fluctuations in revenues and operating results.
Our operating results may also be affected by certain seasonal trends. For
example, we may experience lower sales and order levels in the first quarter
when compared with the preceding fourth quarter due to the seasonality of
certain harvested food items and the timing of annual or semi-annual customer
plant shut-downs during which systems are installed. We expect these patterns to
continue.
Rapid Technological Change; Product Development: The markets for our machine
vision products are characterized by rapidly changing technology, evolving
industry standards and frequent new product introductions and enhancements. For
example, we believe that the 1995 introduction by Key Technology, Inc. of its
new line of vision sorting equipment adversely affected our bookings in late
1995 and 1996. Sales of our products depend in part on the continuing
development and deployment of new technology and services and applications. Our
success will depend to a significant extent upon our ability to enhance existing
products and develop new products that gain market acceptance. We cannot be sure
that we will be successful in selecting, developing and manufacturing new
products or enhancing existing products on a timely or cost-effective basis or
that products or technologies developed by others will not render our products
non-competitive or obsolete. Moreover, we may encounter technical problems in
connection with product development that could result in the delayed
introduction of new products or product enhancements.
Market Acceptance of New Products: Our future operating results will depend upon
our ability to successfully introduce and market, on a timely and cost-effective
basis, new products and enhancements to existing products. We are currently
marketing a new generation of high-speed software and digital signal processing
technology designed to significantly improve system performance. In 1998 and
1999, we placed machines incorporating the new technology at several customer
locations as trial units. While some of these systems have been converted to
sales, ultimate success will depend upon completion of product development and
further acceptance by the customers. We cannot be sure that a market for these
systems will develop (i.e., that a need for the system will exist, that the
system will be favored over other products on the market, etc.).
Dependence on Certain Markets and Expansion Into New Markets: Our future success
and growth depends upon continuing sales in domestic and international food
processing markets as well as successful penetration of other existing and
potential markets. A substantial portion of our historical sales has been in the
potato and other vegetable processing markets. Reductions in capital equipment
expenditures by such processors due to commodity surpluses, product price
fluctuations, changing consumer preferences, longer product evaluation periods
or other factors could have an adverse effect on our results of operations. We
also intend to expand the marketing of our processing systems in additional food
markets such as meat and granular food products, as well as non-food markets
such as plastics, wood products and tobacco, and to expand our sales activities
in foreign markets. In the case of Ventek, the wood products market served is
narrow and cyclical, and saturation of that market and the potential inability
to identify and develop new markets could adversely affect our growth rate. We
may not be able to successfully penetrate additional food and non-food markets
or expand further in foreign markets.
Lengthy Sales Cycle: The marketing and sales cycle for our machine vision
systems, especially in new markets or in a new application, is lengthy and can
be as long as three years. Even in existing markets, due to the $150,000 to
$600,000 price for each system and possibly significant ancillary costs required
for a customer to install the system, the purchase of a machine vision system
can constitute a substantial capital investment for a customer (which may need
more than one machine for its particular proposed application) requiring lengthy
consideration and evaluation. In particular, a potential customer must develop a
high degree of assurance that the product will meet its needs, successfully
interface with the customer's own manufacturing, production or processing
system, and have minimal warranty, safety and service problems. Accordingly, the
time lag from initiation of marketing efforts to final sales can be lengthy.
Competition: The markets for our products are highly competitive. Information
prepared by the Automated Imaging Association indicates that the North American
machine vision market was approximately $1.3 billion in 1998. While we do not
compete in all aspects of this market, the food and wood products segments are
served by approximately 35 companies, many of which are larger and may have
significantly greater financial, technical and marketing resources than the
Company. For example, Elbicon and Pulsarr are owned by Barco NV of Belgium, a
$700 million sales company. Other competitors include Oldenburg, Allen
Machinery, Sortex/Buhler, ESM/Stake and Key.
Several years ago, Key, a major competitor, introduced a new optical sorter
product that has increased the competition that we face. In the case of Ventek,
the wood industry continues to develop alternative products to plywood (e.g.,
oriented strand board) which do not require vision systems for quality control.
Some of our competitors may have substantially greater financial, technical,
marketing and other resources than we have. Important competitive factors in our
markets include price, performance, reliability, customer support and service.
Although we believe that we currently compete effectively with respect to these
factors, we may not be able to compete effectively in the future.
Dependence Upon Certain Suppliers: Certain key components and subassemblies used
in our products are currently obtained from sole sources or a limited group of
suppliers, and we do not have any long-term supply agreements to ensure an
uninterrupted supply of these components. Although we seek to reduce dependence
on sole or limited source suppliers, the inability to obtain sufficient sole or
limited source components as required, or to develop alternative sources if and
as required, could result in delays or reductions in product shipments which
could materially and adversely affect our results of operations and damage
customer relationships. The purchase of certain of the components used in our
products require an eight- to twelve-week lead time for delivery. An
unanticipated shortage of such components could delay our ability to timely
manufacture units, damage customer relations, and have a material adverse effect
on us. In addition, a significant increase in the price of one or more of these
components or subassemblies could negatively affect our results of operations.
Dependence Upon Significant Customers and Distribution Channel: We sold
equipment to two unaffiliated customers in 1999 totaling 13% of sales each, to
an unaffiliated customer totaling 14% of sales in 1997 and to two unaffiliated
customers totaling 13% and 12% of sales in 1996. Ventek's sales have been to a
relatively small number of multi-location plywood manufacturers. In the emerging
pulp wood industry, we utilize a single exclusive distributor for our products
in North America. In 1998, FMC Corporation became our exclusive or non-exclusive
sales representative in much of the United States and in many areas in the rest
of the world. While we strive to create long-term relationships with our
customers, distributors and representatives, there can be no assurance that they
will continue ordering or selling additional systems. We may continue to be
dependent on a small number of customers, distributors and representatives, the
loss of which would adversely affect our business.
Risk of International Sales: Due to our export sales, we are subject to the
risks of conducting business internationally, including unexpected changes in
regulatory requirements; fluctuations in the value of the U. S. dollar which
could increase the sales prices in local currencies of our products in
international markets; delays in obtaining export licenses, tariffs and other
barriers and restrictions; and the burdens of complying with a variety of
international laws. For example, the possibility of sales to Indonesian
customers was adversely affected by that country's currency devaluation when
compared to the U. S. dollar over the past few years. In addition, the laws of
certain foreign countries may not protect our intellectual property rights to
the same extent as do the laws of the United States.
Uncertain Ability to Manage Growth and Integrate Acquired Businesses: As part of
our business strategy, we intend to pursue rapid growth. In March and July 1996,
we acquired Pulsarr and Ventek. Pulsarr was subsequently sold in May 1997. A
growth strategy involving the integration of new entities may require the
establishment of additional sales representative and distribution relationships,
expanded customer service and support, increased personnel throughout the
Company and the continued implementation and improvement of our operational,
financial and management information systems. We may be unable to attract
qualified personnel or to accomplish other measures necessary for successful
integration of entities that may be acquired in the future or for internal
growth, and we may be unable to successfully manage expanded operations. As we
expand, we may from time to time experience constraints that will adversely
affect our ability to satisfy customer demand in a timely fashion. Failure to
manage growth effectively could negatively affect our financial condition and
results of operations.
Dependence Upon Key Personnel: Our success depends to a significant extent upon
the continuing contributions of key management, technical, sales and marketing
and other key personnel. Except for William J. Young, our President and Chief
Executive Officer, Alan R. Steel, our Chief Financial Officer, Dr. James Ewan,
SRC's President and Chief Executive Officer, and the four former stockholders of
Ventek, we do not have long-term employment agreements or other arrangements
with employees which would encourage them to remain with the Company. Our future
success also depends upon our ability to attract and retain additional skilled
personnel. Competition for such employees is intense. The loss of any current
key employees or the inability to attract and retain additional key personnel
could have a material adverse effect on our business and operating results.
Intellectual Property: Our competitive position may be affected by our ability
to protect proprietary technology. Although we have a number of United States
and foreign patents, such patents may not provide meaningful protection for our
product innovations. We may experience additional intellectual property risks in
international markets where we may lack patent protection.
Numerous users of the Company's products have received notice of patent
infringement from the Lemelson Medical, Educational & Research Foundation,
Limited Partnership ("Lemelson") alleging that their use of the Company's
products infringes certain patents transferred to Lemelson by the late Jerome H.
Lemelson. Certain of these users have notified the Company that, in the event it
is subsequently determined that their use of the Company's products infringes
any of the Partnership's patents, they may seek indemnification from the Company
for damages or expenses resulting from this matter. We cannot estimate the
amount of liability, if any, that may result from this matter.
Product Liability and Other Legal Claims: From time to time, we may be involved
in litigation arising out of the normal course of business, including product
liability, patent and other legal claims. While we have a general liability
insurance policy which includes product liability coverage up to an aggregate
amount of $10 million, we may not be able to maintain product liability
insurance on acceptable terms in the future. Litigation, regardless of its
outcome, could result in substantial cost and diversion of effort. Any
infringement claims or litigation against us could materially and adversely
affect our business, operating results and financial condition. If a substantial
product liability or other legal claim against us was sustained that was not
covered by insurance, there could be an adverse effect on our financial
condition and marketability of the affected products.
Warranty Exposure and Performance Specifications: We generally provide a
one-year limited warranty on our products. In addition, for certain
custom-designed systems, we contract to meet certain performance specifications.
In the past, we have incurred higher warranty expenses related to new products
than we typically incur with established products. We may incur substantial
warranty expenses in the future with respect to new products, as well as
established products, or with respect to our obligations to meet performance
specifications, which may have an adverse effect on our results of operations
and customer relationships.
Possible Need for Additional Financing: We may seek additional financing;
however, we may not be able to obtain additional financing on terms satisfactory
to us, if at all. Potential increases in the number of outstanding shares of our
Common Stock due to convertible debt and preferred stock and stock options,
substantial losses in 1996 and 1999 and debt due in 2001, may limit our ability
to negotiate additional debt or equity financing.
Shareholder Rights Plan: In February 1998, we implemented a stock rights
program. Pursuant to the program, stockholders of record on February 27, 1998
received a dividend of one right to purchase for $15 one one-hundredth of a
share of a newly created Series A Junior Participating Preferred Stock. The
rights are attached to our Common Stock and will also become attached to shares
issued in the future. The rights will not be traded separately and will not
become exercisable until the occurrence of a triggering event, defined as an
accumulation by a single person or group of 20% or more of our Common Stock. The
rights will expire on February 26, 2008 and are redeemable at $.0001 per right.
After a triggering event, the rights will detach from the Common Stock. If AMV
is then merged into, or is acquired by, another corporation, we have the
opportunity to either (a) redeem the rights or (b) permit the rights holder to
receive in the merger stock of AMV or the acquiring company equal to two times
the exercise price of the right (i.e., $30). In the latter instance, the rights
attached to the acquirer's stock become null and void. The effect of the rights
program is to make a potential acquisition of the Company more expensive for the
acquirer if, in the opinion of our Board of Directors, the offer is inadequate.
In October 1998, FMC acquired 119,106 shares of our Series B Preferred Stock,
which, if converted into Common Stock in accordance with its terms, represented
a 10% ownership position in the Company on that date. FMC also received a
five-year option to acquire 15% of our outstanding Common Stock on the date of
exercise. While FMC's resulting beneficial ownership exceeds 20%, the
transaction was not a triggering event as defined in the Stock Rights Plan since
FMC acquired the shares directly from the Company.
In December 1998, we amended the Shareholder Rights Plan to permit FMC to
purchase on the open market up to 1,600,000 shares of Common Stock without such
purchase being a triggering event.
In February 2000, the Company's Board of Directors determined that the merger
with Key will not be a triggering event.
Planned Merger with Key Technology, Inc.: In February 2000, the Company entered
into an Agreement and Plan of Merger with Key whereby the Company would be
acquired by Key. The transaction is subject to the approval of FMC, holder of
the Company's Series B Preferred Stock, and AMV's common stockholders, as well
as certain other conditions. On April 24, 2000, FMC agreed to vote in favor of
the merger.
If the merger is not completed for any reason, the Company may be subject to a
number of material risks, including the following:
* The Company may be required under certain circumstances to pay Key a
termination fee of $500,000 or $2,000,000;
* The price of the Company's Common Stock may decline to the extent that the
relevant current market price reflects a market assumption that the merger
will be completed;
* Costs related to the merger, such as legal, accounting and financial
advisor fees, must be paid even if the merger is not completed.
* Key will have obtained sufficient information about the Company to possibly
create a competitive advantage.
In addition, the Company's customers, strategic partners or suppliers, in
response to the announcement of the merger, may delay or defer decisions
concerning the Company. Any delay or deferral of those decisions by customers,
strategic partners or suppliers could have a material adverse effect on the
business of the Company, regardless if whether the merger is ultimately
completed. Similarly, current and prospective AMV employees may experience
uncertainty about their future roles as Key's plans with regard to these
employees are announced or executed. This may adversely affect the Company's
ability to attract and retain key management, sales, marketing and technical
personnel.
Further, if the merger is terminated, and the Company's Board of Directors
determines to seek another merger or business combination, there can be no
assurance that it will be able to find a partner willing to pay an equivalent or
more attractive price than the price to be paid in the merger. In addition,
while the merger agreement is in effect and subject to very narrowly defined
exceptions, AMV is prohibited from soliciting, initiating or encouraging or
entering into certain transactions, such as a merger, sale of assets or other
business combination, with any party other than Key.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- --------------------------------------------------------------------------------
(a) Exhibits
Exhibit
Number Description
------- -----------
2.1 Agreement and Plan of Merger by and among Key Technology, Inc.
("Key"), KTC Acquisition Corp. ("KTC") and the Company dated February
15, 2000, as amended February 29, 2000. (22)
2.2 Agreement regarding Tender Offer between Key and the Company dated
February 15, 2000, as amended February 29, 2000. (22)
2.3 Amendment No. 2 to Agreement and Plan of Merger dated April 24, 2000
among the Company, Key and KTC. (24)
3.1 Restated Articles of Incorporation of the Company as amended to date.
(9)
3.2 Restated and Amended By-Laws of the Company. (2)
4.1 Form of Class G Warrant Agreement. (5)
4.2 Form of Class H Warrant Agreement. (8)
4.3 Form of Class I Warrant Agreement. (6)
4.4 Form of stock option plan and stock option agreement. (1)
4.5 Form of 1997 Restricted Stock Plan and restricted stock agreement. (7)
4.6 Form of amendments to restricted stock agreements. (19)
4.7 Rights Agreement dated February 27, 1998 between the Company and
American Stock Transfer and Trust Company ("AST"). (13)
4.8 Amendment to Rights Agreement between the Company and AST. (20)
4.9 Amendment to Class I Warrant Agreement. (15)
4.10 Form of Certificate of Determination for Series A Junior Participating
Preferred Stock. (16)
4.11 Form of Certificate of Determination for Series B Preferred Stock.
(18)
10.1 Form of Indemnity Agreement between the Company and each of its
officers and directors. (1)
10.2 Employment Agreement between Alan R. Steel and the Company dated
January 1, 1998. (14)
10.3 Employment Agreement between William J. Young and the Company dated
January 1, 1998. (14)
10.4 Employment Agreement between William J. Young and SRC VISION, Inc.
dated January 1, 1998. (14)
10.5 Employment Agreement between James Ewan and SRC VISION, Inc. dated
January 1, 1998. (14)
10.6 Stock Purchase Agreement dated March 1, 1996 (without exhibits)
between Meijn Beheer BV and ARC Netherlands BV, a wholly-owned
subsidiary of the Company. (4)
10.7 Stock Purchase Agreement dated March 1, 1996 between J. C. Scholt and
ARC Netherlands BV, a wholly-owned subsidiary of the Company. (4)
10.8 Convertible Note dated March 1, 1996 issued in connection with that
certain Stock Purchase Agreement dated March 1, 1996 between J. C.
Scholt and ARC Netherlands BV. (4)
10.9 Subscription Agreement dated January 18, 1996 between the Company and
Swiss American Securities, Inc, as agent for Credit Suisse related to
the private placement of 1,400,000 shares of the Company's Class A
Common Stock. (4)
10.10 Subscription Agreement dated April 9, 1996, between the Company and
Swiss American Securities, Inc., as agent for Credit Suisse, related
to the private placement of $3,400,000 of convertible secured notes.
(5)
10.11 Convertible Secured Note dated April 17, 1996, between the Company
and Ilverton International, Inc. (8)
10.12 $1,000,000 Note dated July 24, 1996, between AMV and Ventek. (6)
10.13 $2,250,000 Convertible Note dated July 24, 1996, between AMV and
Ventek. (6)
10.14 $1,125,000 Note dated July 24, 1996, between AMV and Ventek. (6)
10.15 Stock Appreciation Rights Agreement dated July 24, 1996 between AMV
and Ventek. (6)
10.16 Form of Employment Agreement dated July 24, 1996 between Ventek and
each of the four stockholders of Ventek. (6)
10.17 Pledge and Security Agreement dated July 24, 1996, by and among AMV,
AMV Subsidiary, Inc., Ventek and Solin and Associates, P.C. (6)
10.18 1997 SRC VISION, Inc. Stock Option Plan and forms of stock option
agreements. (12)
10.19 Plan of Merger between ARC Capital and AMV to effect an amendment to
the Company's Articles of Incorporation to change the Company's name
from ARC Capital to Advanced Machine Vision Corporation. (9)
10.20 Share Purchase Agreement dated April 29, 1997 between Barco NV and
ARC Netherlands BV. (10)
10.21 Settlement Agreement dated August 12, 1997. (11)
10.22 1997 Nonqualified Stock Option Plan and form of option agreement.
(11)
10.23 Promissory Note dated April 24, 1998 to Bank of America NT&SA,
together with related documents. (17)
10.24 $250,000 Note dated June 5, 1998 from Rodger A. Van Voorhis to
Ventek. (15)
10.25 Series B Preferred Stock Purchase Agreement between AMV and FMC
Corporation dated October 14, 1998. (18)
10.26 Intellectual Property and Security Agreement dated October 14, 1998
between SRC VISION, Inc. and FMC Corporation. (18)
10.27 1998 Senior Management and Director Stock Purchase Plan. (20)
10.28 Business Loan Agreement dated April 12, 1999 between AMV and Bank of
America NT&SA ("BofA"). (21)
10.29 Amendment to Business Loan Agreement Dated February 29, 2000 between
AMV and BofA. (23)
10.30 Agreement dated April 24, 2000 among the Company, Key, KTC and FMC.
(24)
27 Financial Data Schedule
- ----------------------
(1) Previously filed as an exhibit to Form S-1 (File No. 33-45126).
(2) Previously filed as an exhibit to Form S-3 (File No. 333-10847).
(3) Filed with the SEC on October 5, 1995, as an exhibit to the Company's
Form 8-K dated October 2, 1995.
(4) Filed with the SEC on March 6, 1996, as an Exhibit to the Company's
Form 8-K dated March 1, 1996.
(5) Filed with the SEC on April 14, 1996, as an exhibit to the Company's
Form 10-K for the year ended December 31, 1995.
(6) Filed with the SEC on July 30, 1996, as an exhibit to the Company's
Form 8-K dated July 24, 1996.
(7) Filed with the SEC on January 22, 1997, as an exhibit to the Company's
Form 8-K dated January 9, 1997.
(8) Filed with the SEC on May 14, 1996, as an exhibit to the Company's
Form 10-Q for the quarter ended March 31, 1996.
(9) Filed with the SEC on May 14, 1997 as an exhibit to the Company's Form
10-Q for the quarter ended March 31, 1997.
(10) Filed with the SEC on May 9, 1997 as an exhibit to the Company's Form
8-K regarding the sale of Pulsarr.
(11) Filed with the SEC on October 30, 1997 as an exhibit to the Company's
Form 10-Q for the quarter ended September 30, 1997.
(12) Filed with the SEC on March 31, 1997 as an exhibit to the Company's
Form 10-K for the year ended December 31, 1996.
(13) Filed with the SEC on February 20, 1998 as an exhibit to the Company's
Form 8-A.
(14) Filed with the SEC on February 27, 1998 as an exhibit to the Company's
Form 8-K regarding implementation of a stock rights program and
employment contracts.
(15) Filed with the SEC on June 15, 1998 as an exhibit to the Company's
Form 8-K dated June 5, 1998.
(16) Filed with the SEC on February 27, 1998 as an exhibit to the Company's
Form 8-A dated February 27, 1998.
(17) Filed with the SEC on August 4, 1998 as an exhibit to the Company's
Form 10-Q dated August 4, 1998.
(18) Filed with the SEC on October 19, 1998 as an exhibit to the Company's
Form 8-K dated October 14, 1998.
(19) Filed with the SEC on October 30, 1998 as an exhibit to the Company's
Form 10-Q dated October 30, 1998.
(20) Filed with the SEC on January 14, 1999 as an exhibit to the Company's
Form 8-K dated December 22, 1998.
(21) Filed with the SEC on May 11, 1999 as an exhibit to the Company's Form
10-Q dated May 11, 1999.
(22) Filed with the SEC on March 10, 2000 as an exhibit to the Company's
Form 8-K dated March 10, 2000.
(23) Previously filed with the SEC on March 30, 2000 as an exhibit to the
Company's Form 10-K dated March 15, 2000.
(24) Previously filed with the SEC on May 8, 2000 as an exhibit to the
Company's Form 8-K dated May 8, 2000.
(b) Reports on Form 8-K:
On January 5, 2000, a Form 8-K was filed with the SEC regarding the
Company's proposal to purchase approximately one million shares of its
common stock on the open market.
On March 10, 2000, a Form 8-K was filed with the SEC regarding an Agreement
and Plan of Merger and Agreement Regarding Tender Offer by and among the
Company, Key and KTC.
On May 8, 2000, a Form 8-K was filed with the SEC regarding an Agreement by
and among the Company, Key and FMC Corporation.
<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.
May 15, 2000 /s/ Alan R. Steel
- ------------------------------------ -------------------------------
Alan R. Steel
Vice President, Finance
(Principal Financial and duly
Authorized Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
March 31, 2000 financial statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000795445
<NAME> ADVANCED MACHINE VISION CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,298
<SECURITIES> 0
<RECEIVABLES> 2,687
<ALLOWANCES> 0
<INVENTORY> 8,572
<CURRENT-ASSETS> 14,645
<PP&E> 8,210
<DEPRECIATION> 3,497
<TOTAL-ASSETS> 25,305
<CURRENT-LIABILITIES> 4,989
<BONDS> 6,284
2,579
0
<COMMON> 26,053
<OTHER-SE> (12,980)
<TOTAL-LIABILITY-AND-EQUITY> 25,305
<SALES> 5,388
<TOTAL-REVENUES> 5,388
<CGS> 2,822
<TOTAL-COSTS> 6,809
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 168
<INCOME-PRETAX> (1,589)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,589)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,589)
<EPS-BASIC> (.13)
<EPS-DILUTED> (.13)
</TABLE>
