UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the period ended July 31, 2000
-------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to _____________________
Commission file number 0-14812
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EDISON CONTROL CORPORATION
--------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-2716367
------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
777 Maritime Drive
PO Box 308
Port Washington, WI 53074-0308
----------------------------------------
(Address of principal executive offices)
(Zip Code)
(262) 268-6800
----------------------------------------------------
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
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
------- -------
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $.01 par value: 2,351,308 as of July 31, 2000
-----------------------------------------------------------
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
INDEX
Form 10-Q
Page Number
-----------
Part I Financial Information
Item 1 Financial Statements
---------------------------
Consolidated Balance Sheets Pages 2-3
July 31, 2000 (Unaudited) and
January 31, 2000
Consolidated Statements of Operations Page 4
Three and six months ended July 31,
2000 and 1999 (Unaudited)
Consolidated Statements of Cash Flows Pages 5-6
Six months ended July 31,
2000 and 1999 (Unaudited)
Notes to Consolidated Financial Statements Pages 7-9
(Unaudited)
Item 2 Management's Discussion and Analysis of Pages 9-12
----------------------------------------------
Operations and Financial Condition
----------------------------------
Item 3 Quantitative and Qualitative Disclosures Page 12
-----------------------------------------------
About Risk
----------
Part II Other Information
Item 4 Submission of Matters to a Vote of Pages 13
------------------------------------------
Security Holders
----------------
Item 6 Exhibits Page 13 and
--------------- Exhibit Index
1
<PAGE>
PART I.
Item 1
Financial Statements
--------------------
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 31, 2000 and January 31, 2000
July 31, January 31,
2000 2000
---- ----
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 460,900 $ 539,586
Investments 95,000 95,000
Trading securities 968,488 1,405,650
Trade accounts receivable, net 4,153,295 3,522,867
Receivable from affiliate 60,118 61,606
Inventories, net 6,591,452 7,110,888
Prepaid expenses and other assets 232,408 193,886
Taxes other than income 12,693 0
Refundable income taxes 18,103 0
Deferred income taxes 240,000 190,000
----------- -----------
Total current assets 12,832,457 13,119,483
Investment in and advances to affiliate 518,108 478,108
Other Assets:
Prepaid pension 0 25,193
Deferred income taxes 535,000 535,000
----------- -----------
Total other assets 535,000 560,193
Property, plant and equipment, net 7,696,095 7,968,785
Goodwill (net of amortization) 8,341,929 8,458,059
Organizational/finance costs (net of
amortization) 43,960 46,036
----------- -----------
TOTAL ASSETS $29,967,549 $30,630,664
=========== ===========
(Continued)
See Accompanying Notes.
2
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 31, 2000 and January 31, 2000
(Continued)
July 31, January 31,
2000 2000
---- ----
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 1,289,904 $ 989,595
Accrued compensation 658,160 791,528
Taxes other than income taxes 0 24,780
Other accrued expenses 575,653 653,077
Income taxes payable 0 151,104
Deferred compensation 754,250 754,250
Current maturities on long-term debt 933,784 933,784
----------- -----------
Total current liabilities 4,211,751 4,298,118
Accrued pension expenses 46,795 0
Long-term debt, less current maturities 6,149,277 8,029,358
----------- -----------
Total Liabilities 10,407,823 12,327,476
Shareholders' Equity:
Preferred stock, $.01 par value:
1,000,000 shares
authorized, none issued 0 0
Common stock, $.01 par value:
20,000,000 shares authorized,
2,351,308 shares issued
and outstanding 23,513 23,513
Additional paid-in capital 10,344,868 10,344,868
Retained earnings 9,312,583 7,917,695
Accumulated other comprehensive
(loss) income (121,238) 17,112
----------- -----------
Total Shareholders' Equity 19,559,726 18,303,188
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $29,967,549 $30,630,664
=========== ===========
See Accompanying Notes.
3
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE AND SIX MONTHS ENDED JULY 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------- ----------------
July 31, July 31,
-------- --------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $7,210,022 $6,932,566 $14,164,174 $13,050,099
COST OF GOODS SOLD 4,562,187 4,383,457 8,840,403 8,381,054
---------- ---------- ----------- -----------
GROSS PROFIT 2,647,835 2,549,109 5,323,771 4,669,045
OTHER OPERATING EXPENSES:
Selling, engineering and
administrative expenses 1,132,482 1,107,684 2,632,938 2,312,324
Goodwill and organizational/
finance cost amortization 59,103 72,800 118,206 152,450
---------- ---------- ----------- -----------
Total other operating expenses 1,191,585 1,180,484 2,751,144 2,464,774
---------- ---------- ----------- -----------
OPERATING INCOME 1,456,250 1,368,625 2,572,627 2,204,271
OTHER EXPENSE (INCOME):
Interest expense 141,336 207,418 318,018 458,827
Realized losses (gains) on
trading securities 2,151 4,500 (122,371) (256,453)
Unrealized losses (gains) on
trading securities 146,461 (11,176) 126,475 181,641
Stock warrant amortization 0 0 0 389,236
Write down of assets for
sale to net realizable value 0 110,000 0 110,000
Miscellaneous income (34,762) (16,932) (56,094) (45,818)
---------- ---------- ----------- -----------
Total other expense 255,186 293,810 266,028 837,433
---------- ---------- ----------- -----------
INCOME BEFORE INCOME TAXES 1,201,064 1,074,815 2,306,599 1,366,838
INCOME TAXES 457,686 425,420 911,711 556,596
---------- ---------- ----------- -----------
NET INCOME 743,378 649,395 1,394,888 810,242
OTHER COMPREHENSIVE (LOSS)
INCOME - Foreign currency
translation adjustment (67,794) 3,926 (138,350) (18,988)
---------- ---------- ----------- -----------
COMPREHENSIVE INCOME $675,584 $653,321 $1,256,538 $791,254
========== ========== =========== ===========
Net income per share-basic $.32 $.28 $.59 $.35
Net income per share-diluted $.25 $.22 $.48 $.28
</TABLE>
See Accompanying Notes.
4
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JULY 31, 2000 AND 1999
(Unaudited)
2000 1999
---- ----
Net income $1,394,888 $ 810,242
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 585,845 994,458
Provision for doubtful accounts 114,636 61,691
Write down of asset held for sale to
net realizable value 0 110,000
Realized gain on sales of trading securities (122,371) (256,453)
Unrealized loss on trading securities 126,475 181,641
Purchases of trading securities (80,783) (77,875)
Proceeds from the sale of trading securities 513,841 2,633,788
Equity in earnings of affiliate (40,000) (35,000)
Changes in assets and liabilities:
Accounts receivable (745,064) (686,928)
Receivable from affiliate 1,488 (25,261)
Inventories 519,436 958,162
Prepaid expenses and other assets (13,329) (66,022)
Trade accounts payable 300,309 (847,903)
Accrued compensation (133,368) (167,419)
Taxes other than income taxes (37,473) 41,044
Other accrued expenses (30,629) (2,587)
Deferred income taxes (50,000) (148,000)
Income taxes payable (169,207) 175,563
---------- ----------
Total adjustments 739,806 2,842,899
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,134,694 3,653,141
---------- ----------
Cash flows from investing activities:
Additions to plant and equipment (194,949) (174,919)
Maturity of certificate of deposit 0 95,000
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (194,949) (79,919)
---------- ----------
(Continued)
See Accompanying Notes.
5
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JULY 31, 2000 AND 1999
(Unaudited)
(Continued)
2000 1999
---- ----
Cash flows from financing activities:
Proceeds from issuance of long-term debt $ 600,000 $ 5,157,183
Principal payments on long-term debt (2,480,081) (8,631,380)
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES (1,880,081) (3,474,197)
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (138,350) (18,988)
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (78,686) 80,037
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 539,586 468,072
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 460,900 $ 548,109
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $1,130,918 $ 605,028
Cash paid during the period for interest 319,923 504,044
See Accompanying Notes.
6
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, these statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal, recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the six-month period
ending July 31, 2000 are not necessarily indicative of the results that may be
expected for other interim periods or the year ended January 31, 2001. For
further information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the year ended January
31, 2000.
Note 2 - Nature of Business and Accounting Policies
Principles of Consolidation - The consolidated financial statements include the
accounts of Edison Control Corporation ("Edison") and subsidiaries, all of which
subsidiaries are wholly owned by Edison (collectively, the "Company"). All
material intercompany accounts and transactions have been eliminated in
consolidation.
Nature of Operations - The Company is currently comprised of the following
operations. Construction Forms ("ConForms") is a leading manufacturer and
distributor of systems of pipes, couplings and hoses and other equipment used
for the pumping of concrete. ConForms manufactures a wide variety of finished
products which are used to create appropriate configurations of systems for
various concrete pumps. Ultra Tech manufactures abrasion resistant piping
systems for use in industries such as mining, pulp and paper, power and waste
treatment. Gilco produces a line of concrete and plaster/mortar mixers. JABCO
primarily leases property and equipment to the Company.
Trading Securities - Debt and equity securities purchased and held principally
for the purpose of sale in the near term are classified as "trading securities"
and reported at fair value with unrealized gains and losses included in
earnings. The cost of individual securities sold is based on the first-in,
first-out method.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
period. Actual results could differ from those estimates.
7
<PAGE>
Translation of Foreign Currencies - Assets and liabilities of foreign operations
are translated into United States dollars at current exchange rates. Income and
expense accounts are translated into United States dollars at average rates of
exchange prevailing during the year. Adjustments resulting from the translation
of financial statements of the foreign operations are included as foreign
currency translation adjustments in other comprehensive income.
Net Income Per Share - Reconciliation of the numerator and denominator of the
basic and diluted per share computations for the three and six-month periods
ended July 31, 2000 and 1999 are summarized as follows:
Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31,
------- -------
2000 1999 2000 1999
---- ---- ---- ----
Net income per share-basic:
Net income (numerator) $ 743,378 $ 649,395 $1,394,888 $ 810,242
Weighted average shares
outstanding (denominator) 2,351,308 2,346,933 2,351,308 2,346,933
Net income per share-basic $ .32 $ .28 $ .59 $ .35
Net income per share-diluted:
Net income (numerator) $ 743,378 $ 649,395 $1,394,888 $ 810,242
Weighted average shares
outstanding 2,351,308 2,346,933 2,351,308 2,346,933
Effect of dilutive
securities:
Stock options 175,387 189,873 180,382 184,382
Stock warrants 389,959 378,823 383,982 384,902
Weighted average shares
outstanding (denominator) 2,916,654 2,915,629 2,915,672 2,916,217
Net income per share-diluted $ .25 $ .22 $ .48 $ .28
8
<PAGE>
Note 3 - Segment Information
The Company's operating segments are organized based on the nature of products
and services provided. A description of the nature of the segments' operations
and their accounting policies are contained in Note 2. Segment information for
the three and six-month periods ended July 31, 2000 and 1999 follows:
Three Months Ended July 31,
---------------------------
2000 1999
---- ----
Net Operating Net Operating
Sales Income Sales Income
----- --------- ----- ---------
ConForms $ 6,198,028 $ 1,574,247 $ 5,359,198 $ 1,346,667
Ultra Tech 523,023 (80,992) 1,027,101 135,627
Gilco 488,971 24,596 546,267 (17,354)
Edison (61,601) (96,315)
----------- ----------- ----------- -----------
Total $ 7,210,022 $ 1,456,250 $ 6,932,566 $ 1,368,625
Six Months Ended July 31,
-------------------------
2000 1999
---- ----
Net Operating Net Operating
Sales Income Sales Income
----- --------- ----- ---------
ConForms $11,999,866 $ 3,030,043 $10,442,099 $ 2,300,429
Ultra Tech 1,190,128 (4,791) 1,493,790 227,626
Gilco 974,180 (35,557) 1,114,210 (133,143)
Edison (417,068) (190,641)
----------- ----------- ----------- -----------
Total $14,164,174 $ 2,572,627 $13,050,099 $ 2,204,271
Item 2.
Management's Discussion and Analysis of Operations and Financial Condition
--------------------------------------------------------------------------
Certain matters discussed in this Quarterly Report on Form 10-Q are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Company "believes",
"anticipates", "expects", or words of similar import. Similarly, statements that
describe the Company's future plans, objectives or goals are also
forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties, including, but not limited to, new product
advancements by competition, significant changes in industry technology,
economic or political conditions in the countries in which the Company does
business, the continued availability of sources of supply, the availability and
consummation of favorable acquisition opportunities, increasing competitive
pressures on pricing and other contract terms, economic factors affecting the
Company's customers and stock price variations affecting the Company's
securities trading portfolio. These factors could cause actual results to differ
materially from those anticipated as of the date of this report. Shareholders,
potential investors and other readers are urged to consider these factors in
evaluating the forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking statements
included herein
9
<PAGE>
are only made as of the date of this report and the Company undertakes no
obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.
Net sales for the quarter ended July 31, 2000 increased $277,456 (4.0%) to
$7,210,022 compared with net sales for the same period of the prior year. For
the first six months of this year, net sales increased $1,114,075 (8.5%) to
$14,164,174 compared with net sales for the same period of the prior year.
Increases in Conforms' domestic and foreign sales were partially offset by
decreases in Gilco and Ultra Tech project sales. Ultra Tech's sales volume will
continue to fluctuate based on its ability to attain large project sales in the
industries it serves.
As a percentage of net sales, gross margin for the quarter ended July 31, 2000
was 36.7% compared to 36.8% for the quarter ended July 31, 1999. Gross margin
for the six months ended July 31, 2000 increased to 37.6% from 35.8% for the six
months ended July 31, 1999 due to improved ConForms' domestic and foreign
results and fewer lower margin Gilco sales. Selling, engineering and
administrative expenses for the three and six-month periods ended July 31, 2000
increased by $24,798 (2.2%) and $320,614 (13.9%) from the same periods last
year. The increases were largely due to legal and professional expenses during
the quarter ended April 30, 2000 which related to discussions held with various
parties interested in acquiring all of Edison's common stock.
Interest expense decreased to $141,336 and $318,018 for the three and six-month
periods ended July 31, 2000 compared to $207,418 and $458,827 for the same
periods ended July 31, 1999 due to lower debt balances. Interest expense is
expected to continue to decrease due to anticipated future principal reductions
principally from utilizing excess operating cash flow.
The Company had a $148,612 and $4,104 net loss on trading securities for the
three and six-month periods ended July 31, 2000 compared to a net gain of $6,676
and $74,812 for the same periods of the prior year. Trading securities at July
31, 2000 consisted of the following:
Number of Market
Name of Issuer/Title of Issue Shares Value
----------------------------- --------- ------
Common Stocks:
Allied Capital Corp., New 3,000 $ 56,812
Compaq Computer Corp. 5,000 140,313
Entremed Inc. 1,500 45,563
Glenayre Technologies, Inc. 40,000 402,500
Intel Corp. 4,000 267,000
Liberty Digital Inc. 2,000 54,500
Sun International Hotels 100 1,800
--------
Total $968,488
========
Although the Company has no established formal investment policies or practices
for its trading securities portfolio, the Company generally pursues an
aggressive trading strategy, focusing primarily on generating near-term capital
appreciation from its investments in common equity securities. Securities held
in the Company's
10
<PAGE>
portfolio at the end of each period are reported at fair value, with unrealized
gains and losses included in earnings for that period. These factors, combined
with the relative size of the Company's trading portfolio, has led, and will
likely continue to lead, to significant period-to-period earnings volatility
depending upon the capital appreciation or depreciation of the Company's trading
securities portfolio as of the end of each reporting period. The Company does
not use or buy derivative securities.
The amortization of goodwill, financing costs and stock warrants created a total
non-cash charge of $118,206 for the six months ended July 31, 2000 compared to
$541,686 for the prior year. The amortization decrease was due to the expensing
in the six months ended July 31, 1999 of all remaining deferred financing costs
that related to the warrant issued to the principal shareholder. The total
amortization of all these non-cash charges for the year ended January 31, 2001
is expected to approximate $240,000 compared to $659,859 in fiscal 1999.
During the second quarter of 1999, the Company accepted an offer from a third
party to purchase the land and building the Company owned in Cedarburg,
Wisconsin. Based on this offer, the Company decreased the value of this asset by
$110,000 to an estimated realizable value. The Company completed this sale of
the land and building during the third quarter of 1999. The sale resulted in a
loss of $128,543. The proceeds from this sale were used to repay debt.
The Company recorded tax expense of $911,711 for the six months ended July 31,
2000, which represents the estimated annual effective rate of 39.5% applied to
pre-tax income. Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amount of assets and liabilities for financial
statement reporting purposes and the amounts used for income tax purposes.
Net income of $743,378, or $.32 and $.25 per share, basic and diluted,
respectively, for the second quarter of fiscal 2000 was an increase of $93,983
(14.5%), from net income of $649,395, or $.28 and $.22 per share, basic and
diluted, respectively, for the comparable period of the prior year. The change
was principally due to improved sales in 2000 and the writedown of the Cedarburg
building to net realizable value during the second quarter of 1999. For the six
months ended July 31, 2000, net income increased 72.2% to $1,394,888, or $.59
and $.48 per basic and diluted share, respectively, compared to net income of
$810,242, or $.35 and $.28 per basic and diluted share, respectively, in the
comparable period of the prior year. Increases from improved sales and margins
in 2000, the writedown of the Cedarburg building to net realizable value during
the second quarter of 1999, and the decrease in amortization of the non-cash
charges described above were partially offset by increased legal and
professional expenses described above.
Liquidity and Capital Resources
The Company generated $2,134,694 in cash from operations during the first six
months of 2000, compared to cash flow generated by operations of $3,653,141 for
the same period last year. This reduced cash flow was due largely to the net
proceeds of approximately $2,600,000 received from sales of trading securities
during the first six months of 1999. The Company used $194,949 of cash to
acquire capital equipment and $1,880,081 for net payments on long-term debt .
The result was a net decrease in cash and cash equivalents of $78,686 for the
first six months of fiscal 2000 compared to a net increase of $80,037 in the
prior year's first six months.
11
<PAGE>
The Company believes that it can fund proposed capital expenditures and
operational requirements from operations and currently available cash and cash
equivalents, investments, trading securities and existing bank credit lines.
Proposed capital expenditures for the fiscal year ending January 31, 2001 are
expected to total approximately $1,000,000, compared to $675,245 for fiscal
1999.
The Company intends to continue to expand its businesses, both internally and
through potential acquisitions and is also exploring other alternatives that
would focus its efforts on its core business. The Company currently anticipates
that any potential acquisitions would be financed primarily by internally
generated funds or additional borrowings or the issuance of the Company's stock.
Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
The Company is exposed to interest rate risk, foreign currency risk and equity
price risk. These risks include changes in U.S interest rates, changes in
foreign currency exchange rates as measured against the U.S. dollar and changes
in the prices of stocks traded on the U.S. markets.
Interest Rate Risk
------------------
The Company's debt obligations, which totaled $7,083,061 as of July 31, 2000,
are subject to interest rate risk. Most of the borrowings float at either the
prime rate or LIBOR plus a certain amount of basis points. Based on the July 31,
2000 balance, an increase of one percent in the interest rate on the Company's
loans would cause an increase in interest expense of approximately $70,000, or
$.01 per diluted share, net of taxes, on an annual basis. The Company currently
does not use derivatives to fix variable rate interest obligations.
Foreign Currency Risk
---------------------
The Company has foreign operations in the United Kingdom and Malaysia. Sales and
purchases are typically denominated in the British pound, Malaysian ringgit,
German mark, Singapore dollar or U.S. dollar, thereby creating exposures to
changes in exchange rates. The changes in exchange rates may positively or
negatively affect the Company's sales, gross margins and retained earnings. The
Company does not enter into foreign exchange contracts but attempts to minimize
currency exposure risk through working capital management. There can be no
assurance that such an approach will be successful, especially in the event of a
significant and sudden decline in the value of a currency.
Equity Price Risk
-----------------
Approximately 3.2% of the Company's total assets as of July 31, 2000 are
invested in trading securities of various domestic companies. The market value
of these investments is subject to fluctuation. This factor, combined with the
relative size of the Company's trading portfolio ($968,488 at July 31, 2000),
has led and will likely continue to lead, to significant period-to-period
earnings volatility depending upon the capital appreciation or depreciation of
the Company's trading securities portfolio. A 10% decrease in the quoted market
price of these trading securities would decrease the fair market value of these
securities by approximately $100,000, or $.02 per diluted share, net of taxes,
on an annual basis.
12
<PAGE>
PART II.
Item 4.
Submission of Matters to a Vote of Security Holders
---------------------------------------------------
On June 29, 2000, the Company held its 2000 Annual Meeting of Shareholders. Of
the 2,351,308 shares issued and outstanding, holders of 2,136,263 shares were
present, represented in person or by proxy. One matter required vote by the
security holders. Robert L. Cooney, John J. Delucca, Norman Eig, William B.
Finneran, Alan J. Kastelic, Mary E. McCormack, and William C. Scott were elected
to the Board of Directors (2,133,263 votes for each and 3,000 votes against).
There were no broker non-votes to the Company's knowledge.
Item 6.
Exhibits
--------
The Exhibits filed or incorporated by reference herein are as specified in the
Exhibit Index.
Reports on Form 8-K
-------------------
The Company filed no reports on Form 8-K during the quarter to which the report
relates.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EDISON CONTROL CORPORATION
(Registrant)
Date: September 5, 2000 /s/ Jay R. Hanamann
-----------------------------
Jay R. Hanamann
(Chief Financial Officer)
14
<PAGE>
Edison Control Corporation
Exhibit Index
Exhibit No. Description
----------- -----------
27. Financial Data Schedule.
15
