<PAGE>
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
_____________________________________
FOR THE QUARTER ENDED SEPTEMBER 30, 1996 COMMISSION FILE # 0-15303
UNICO, INC.
(Exact name of Registrant as specified in its Charter)
DELAWARE 73-1215433
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
8380 ALBAN ROAD, SPRINGFIELD, VA 22150
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (703) 644-0200
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.
CLASS: COMMON STOCK, $.01 PAR VALUE
Number of SHARES OUTSTANDING as of November 11, 1996 8,206,309
<PAGE>
UNICO, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
PART I -- FINANCIAL INFORMATION
ITEM 1 CONSOLIDATED BALANCE SHEETS
September 30, 1996 and December 31, 1995 3 & 4
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarter Ended September 30, 1996
and the Quarter Ended September 30, 1995 5
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 1996
and the Nine Months Ended September 30, 1995 6
CONSOLIDATED STATEMENTS OF CASH FLOW
For the Nine Months Ended September 30, 1996
and the Nine Months Ended September 30, 1995 7
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 8
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 11
PART II -- OTHER INFORMATION 15
SIGNATURE PAGE 16
2
</TABLE>
<PAGE>
PART 1. FINANCIAL INFORMATION
UNICO, INC.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS 1 of 2
ASSETS September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
CURRENT:
Cash and Cash Equivalents $ 166,713 $300,821
Accounts Receivable:
Trade (net of allowance for
uncollectible accounts of $450,078
and $377,793) 477,489 771,495
Inventory 259,904 254,505
Notes Receivable 116,744 189,707
Notes Receivable -- Stockholders 280,000 280,000
Prepaid Expenses 126,112 171,203
---------- ----------
Total current assets 1,426,962 1,967,731
PROPERTY:
Furniture, fixtures and equipment 4,436,571 4,285,322
Leasehold improvements 161,593 152,470
Less accumulated depreciation (1,888,370) (1,552,175)
----------- -----------
Property, net 2,709,794 2,885,617
GOODWILL (net of amortization of
$351,942 and $317,309) 1,673,080 1,707,713
DEPOSITS AND OTHER 151,204 200,619
----------- -----------
TOTAL $5,961,040 $6,761,680
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE>
UNICO, INC.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS 2 of 2
September 30, December 31,
LIABILITIES & STOCKHOLDERS' EQUITY 1996 1995
---- ----
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $1,126,381 $1,258,768
Accrued liabilities 649,503 242,844
Notes payable, current portion 310,000 781,715
Deferred revenue 110,921
----------- -----------
Total current liabilities 2,085,884 2,394,248
LONG TERM LIABILITIES:
Notes Payable 553,754 805,021
Convertible debenture -- Affiliate 1,386,750
Subordinated debenture 811,500 996,750
Other 91,933
----------- -----------
Total long term liabilities 1,365,254 3,280,454
Total liabilities 3,451,138 5,674,702
REDEEMABLE PREFERRED STOCK:
Preferred stock -- $.01 par value:
5,000,000 shares authorized;
Series A and B Redeemable Preferred stock --
280 shares issued and outstanding
(Redemption value of $280,000) 3 3
STOCKHOLDERS' EQUITY:
Preferred stock -- $.01 par value:
5,000,000 shares authorized;
Series C Convertible Preferred Stock --
1,757,569 and 0 shares issued and outstanding 1,712,739 --
Common stock -- $.01 par value:
20,000,000 shares authorized;
8,206,309 and 7,883,095 shares outstanding 82,063 78,830
Additional paid-in capital 5,038,693 4,974,034
Accumulated deficit (4,323,596) (3,965,889)
----------- -----------
Total stockholders' equity 2,509.902 1,086,978
----------- -----------
TOTAL $5,961,040 $6,761,680
----------- -----------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE>
UNICO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
QUARTERS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
REVENUES:
Coupon and advertising sales,
net of discounts and allowances $1,263,685 $2,108,155
Franchise fees 72,680 36,430
Other 373,958 78,827
---------- ----------
TOTAL REVENUES 1,710,323 2,223,412
EXPENSES:
Production 1,312,260 1,909,151
General and administrative 232,941 815,930
Franchise development 58,218 92,948
Interest expense -- affiliate 14,264 39,384
Interest expense -- other 57,158 52,216
Restructuring cost 362,549
----------- -----------
TOTAL EXPENSES 1,674,841 3,272,178
----------- -----------
NET INCOME (LOSS) BEFORE INCOME TAXES 35,482 (1,048,766)
INCOME TAX PROVISION 9,000 5,499
----------- -----------
NET INCOME (LOSS) $ 26,482 $(1,054,265)
----------- ------------
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,886,608 7,883,095
----------- -----------
NET INCOME (LOSS) PER COMMON SHARE $ .003 $ (.133)
----------- ------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE>
UNICO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
REVENUES:
Coupon and advertising sales,
net of discounts and allowances $4,640,826 $8,494,710
Franchise fees 193,103 65,455
Other 554,203 293,526
---------- ----------
TOTAL REVENUES 5,388,132 8,853,691
EXPENSES:
Production 3,748,191 6,351,681
General and administrative 1,466,879 2,506,846
Franchise development 235,615 292,708
Interest expense -- affiliate 72,827 117,296
Interest expense -- other 195,660 156,575
Restructuring cost 362,549
--------- ----------
TOTAL EXPENSES 5,719,172 9,787,655
--------- ----------
NET INCOME (LOSS) BEFORE INCOME TAXES (331,040) (933,964)
INCOME TAX PROVISION 26,667 12,834
--------- ----------
NET INCOME (LOSS) $(357,707) $ (946,798)
---------- -----------
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,884,274 7,640,215
--------- ----------
NET INCOME (LOSS) PER COMMON SHARE $ (.045) $ (.123)
------------ -----------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE>
UNICO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (357,707) $(946,798)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 370,828 383,336
Provision for bad debts 72,285 34,170
Deferred income taxes
Gain on exchange of stock (45,250) (121,561)
Write down of assets due to restructuring 362,549
Changes in operating assets and liabilities:
Accounts and notes receivable 366,969 239,764
Prepaid expenses and inventory 39,692 (154,310)
Deposits and other 49,415 104,223
Accounts payable and accrued liabilities 274,272 457,880
Deferred revenue (110,921) (116,203)
----------- ----------
Net Cash Provided by (Used in) Operating
Activities 659,583 243,050
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property (160,372) (840,608)
Net Cash Provided by (Used in) Investing Activities (160,372) (840,608)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debentures 25,000 0
Proceeds from notes payable 50,000 365,132
Payment of notes payable (708,319) (94,870)
----------- ----------
Net Cash Provided (Used In) Financing Activities (633,319) 270,262
----------- ----------
CHANGE IN CASH AND CASH EQUIVALENTS: (134,108) (327,296)
Cash and Cash Equivalents -- Beginning of Period 300,821 708,742
----------- ---------
Cash and Cash Equivalents -- End of Period $166,713 $381,446
----------- ---------
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for income taxes $ 5,000 $ 0
Cash paid for interest $ 268,487 $ 273,871
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
7
<PAGE>
UNICO, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
1. BASIS OF PRESENTATION
The interim consolidated financial statements at September 30, 1996 and for
the three month and nine month periods ended September 30, 1996 and 1995
are unaudited, but include all adjustments which the Company considers
necessary for a fair presentation. The December 31, 1995 balance sheet
was derived from the Company's audited financial statements.
The accompanying unaudited financial statements are for the interim periods
and do not include all disclosures normally provided in annual financial
statements, and should be read in conjunction with the Company's audited
financial statements included in the Company's Form 10-KSB for the year
ended December 31, 1995. The accompanying unaudited interim financial
statements for the three month and nine month periods ended September 30,
1996 are not necessarily indicative of the results which can be expected
for the entire year.
2. COMMITMENTS & CONTINGENCIES
Prior to 1995, the Florida Department of Revenue issued a Notice of Intent
to levy additional sales taxes with penalty and interest charges totaling
approximately $480,000 against the Company's subsidiary, Cal-Central. A
liability for a portion of this matter was recorded by Cal-Central and was
included in other long-term liabilities in the financial statements at
December 31, 1994. Subsequent to December 31, 1995, written settlement was
reached with Florida authorities whereby Cal-Central agreed to a payout of
$35,000, payable at $5,000 per quarter, over seven quarters beginning in
June, 1996. The agreed to amount is recorded as a liability at December
31, 1995 and September 30, 1996.
The Company is exposed to various other legal matters encountered in the
normal course of business. In the opinion of management, the resolution of
these matters will not have a material adverse effect on the Company's
consolidated financial position or results of operations.
3. INCOME TAXES
The Company accounts for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109"), which requires an asset and liability approach to
accounting for income taxes. Under SFAS 109, deferred tax assets or
liabilities are computed on the difference between the financial statement
and income tax bases of assets and liabilities ("temporary differences")
using the enacted marginal tax rate. Deferred income tax expenses or
benefits are based on the changes in the deferred tax asset or liability
from period to period.
8
<PAGE>
Management has determined that it is not more likely than not that the
Company will be able to realize all the tax benefits from available net
operating loss carryforwards and has, therefore, provided a valuation
allowance of an equal amount. The income tax provision of $9,000
reflected for the quarter ended September 30, 1996, and $26,667 for the
nine months ended September 30, 1996, in the respective Statements of
Operations, represents state income taxes payable by United Coupon on
profits that are not impacted by net operating loss carryforwards.
4. SUBSIDIARY RESTRUCTURING
The Company acquired Cal-Central Marketing Corporation as a wholly owned
subsidiary on October 27, 1993. Operating profitability and cash flow for
the subsidiary have been below management's expectations and anticipated
potential since the acquisition. During the third quarter of 1995,
management determined that it was in the best interest of shareholders and
the Company to close the Fort Lauderdale, Florida, production facility and
consolidate all art and printing functions for Cal-Central into the
Company's newly expanded facility in Springfield, Virginia. This
transition was accomplished during December 1995, and a restructuring
charge of $772,433 was recorded during 1995 to reflect initial costs
associated with the restructuring.
During the quarter ended March 31, 1996, the Company further evaluated the
collectibility of remaining accounts receivable of Cal-Central, including
receivables related to advertising commitments completed during the
period. As a result of this review, the Company recorded additional bad
debt expense of $60,000 related to Cal-Central accounts receivable.
Management is currently revising the business plan for this business
segment.
5. CORPORATE RESTRUCTURING
On March 4, 1996, the Company entered into a Third Restated and Amended
Loan Agreement with BancFirst which provided for the renewal of the
Company's existing term and revolving credit facilities until January 31,
1997.
In consideration of the plan to consolidate the corporate office functions
from Oklahoma City to the expanded offices of the Company in Springfield,
Virginia, the Company's Chairman, Chief Executive Officer and President,
and its Chief Financial Officer, proposed to resign their positions
following completion of specific key objectives encompassing the bank
restructuring and annual audit. The Board of Directors approved this plan
on March 22, 1996, and appointed Gerard R. Bernier, current Chief Executive
Officer and President of United Coupon, and Robert F. Pulliza, former
Executive Vice President of United Coupon, as their respective successors.
This transition of corporate authority and relocation of corporate
headquarters became effective March 31, 1996.
On June 18, 1996, Mr. Pulliza resigned as Chief Financial Officer of the
Company. Subhash Ghei, United Coupon's Controller since 1994, was
appointed as Mr. Pulliza's successor.
On July 30, 1996, the Company entered into a Loan Conversion Agreement and
Addendum to Loan Conversion Agreement, by and among UNICO, Inc.,
9
<PAGE>
Renaissance Capital Partners, Ltd., a Texas Limited Partnership, and Duncan
Smith Investments Co., a Texas Corporation. The net effect of these
Agreements was the conversion of $1,712,739 of convertible debentures,
subordinated notes and accrued interest, into convertible preferred stock.
Effective August 15, 1996, the Company entered into a Modification And
Extension To The Third Restated Loan Agreement with BancFirst which
extended the due date of the Company's credit facility with BancFirst
until December 31, 1998. This amended agreement provides an interest rate
equal to one percent over the national prime rate and initial monthly
principal payments equal to $22,500.
Effective September 30, 1996, the Company exchanged 323,214 shares of
restricted common stock at a conversion value of $0.35 per restricted
common share for $100,000 of subordinated debentures and accrued interest
of $13,125 related thereto.
The Company has $761,500 of subordinated debentures remaining outstanding.
These debentures are subject to a "standstill" agreement which requires no
payment of interest or principal on these debentures until such time as all
bank debt with BancFirst has been paid. The Company has tendered an offer
to the holders of these debentures to exchange the remaining balances,
including accrued interest, into restricted common stock. Such exchange
would be completed at a conversion value of $.35 per restricted common
share. Management believes such conversion of such debt is in the best
interests of shareholders and would be appropriate for the on-going
operations of the Company. Management is optimistic that exchange of a
material portion of this remaining debt will occur.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal measures of liquidity are cash, certificates of
deposit, accounts receivable and salable inventory. Also, management deems
appropriately managed and collateralized bank lines of credit as a proper
supplement to its liquidity.
The Company's working capital was a deficit $658,922 at September 30, 1996,
a 54% decrease from December 31, 1995. This change reflects: a decrease in
Cash and Equivalents of $134,108 resulting primarily from repayment of bank
loans; a net decrease of $294,006 in trade Accounts Receivable, related to
collection of accounts and lower sales levels during the period; an increase of
$5,399 in paper and work in process Inventory at United Coupon Corporation
("United Coupon"); a decrease of $45,091 in Prepaid Expenses related to
amortization of prepaid sales commissions and other expenses; and a decrease of
$72,963 in Notes Receivable resulting from effective collections during the
current period. These changes were impacted by an increase of $274,272 in
Accounts Payable and Accrued Liabilities related to allocation of available
funds to pay down of bank debt and extension of terms with trade suppliers.
Working capital was aided by a $471,715 reduction of current portion of Notes
Payable and a $110,921 reduction in Deferred Revenue related to completion of
advertising contracts during the period.
Long term liabilities decreased by $1,915,200 during the period as a result
of payments made to banks, as well as the exchange of 1,757,569 shares of
Series C Convertible Preferred Stock for subordinated debentures and accrued
interest related thereto.
During the latter half of 1995, the Company's subsidiary Cal-Central
developed a serious liquidity shortfall as a result of an unexpected, rapid
decline in the subsidiary's core cooperative advertising business. The
decline, which was precipitated by a temporary interruption of service by two
key advertising distributors, limited Cal-Central's ability to meet current
operating and debt-service obligations. As a result, UNICO management
initiated a restructuring program for Cal-Central which immediately reduced
operating expenditures, through the elimination of non-critical personnel,
marginal sales centers, and unprofitable sales and manufacturing functions. In
addition, management arranged a deferral of interest payments on subordinated
debt obligations and arranged convertible debt financing with the Company's
major debenture holders to provide supplemental working capital for financing
the restructuring plan. The restructuring plan could require securities, debt,
or cash beyond that currently available within the Company. Management will
consider all appropriate options available in designing the restructuring plan.
RESULTS OF OPERATIONS -- QUARTER ENDED SEPTEMBER 30, 1996
AS COMPARED TO THE QUARTER ENDED SEPTEMBER 30, 1995
Gross Revenue for the quarter ended September 30, 1996 declined 23% from the
same period in 1995, from $2,223,412 to $1,710,323. Coupon and Advertising
Sales, which include coupon production service fees, national account
advertising fees and advertising sales, and which represent 74% of total
revenue for the 1996 quarter, decreased by 40% from the corresponding period in
11
<PAGE>
1995, due to elimination of advertising revenue from the Company's subsidiary,
Cal-Central Marketing Corporation, while the business plan for this operation
is being revised and restructured. Coupon Sales from United Coupon Corporation
were approximately equal to the prior year.
Franchise Fee Income for the period doubled from the prior year, increasing
from $36,430 during the three month period ended September 30, 1995 to $72,680
for the same period in 1996. Franchise sales continue to receive intensive
effort and management attention.
Other Revenue for the current period was $373,958 compared to $78,827 in
1995. The increase is related to expanded commercial printing for third party
organizations and a gain of $45,250 related to exchange of restricted common
stock for subordinated debenture debt and related accrued interest payable.
Production Expenses, which include art development, printing, bindery,
delivery, product development, distributor support and selling expense,
decreased by 31% during the 1996 quarter in contrast to the same period in
1995. This decrease is related to the decline in Advertising Sales and
related production activities at Cal-Central, partially offset by higher levels
of Commercial Printing at United Coupon.
General and Administrative Expense decreased by 72% from the same period in
1995 as a result of elimination of the production facility in Fort Lauderdale
and consolidation of corporate functions from the former headquarters in
Oklahoma City to the Springfield facility.
Franchise Development Cost, which includes the cost of developing,
advertising, selling, training and supporting United Coupon franchises,
decreased by 37% during the three months ended September 30, 1996 compared to
the prior year, reflecting lower advertising and administrative activities.
Interest Expense decreased $20,178 from the same period last year as a
result of the exchange of Convertible Preferred Stock for $1,757,569 in
subordinated debt and accrued interest at July 30, 1996.
During the latter portion of 1995, the Company's subsidiary, Cal-Central,
experienced a significant cash flow shortfall as a result of the temporary
interruption of product distribution by two key distributors. This shortfall
received reaction from UNICO management through the initiation of a
restructuring plan to reduce Cal-Central administrative overhead and
operating expenses and to implement more efficient and effective approaches to
sales administration and product manufacturing. During the initial phases of
restructuring, Cal-Central has been unable to meet all product art and
printing requirements. In addition, the interruption of distribution of
Cal-Central products caused a delay in Cal-Central's ability to meet the
distribution commitment of advertising sales contracts. Management is
currently developing a revised business plan for this segment. Operating
results related to the Cal-Central business were minimal in all respects
during the period ended September 30, 1996.
Net Income for the current three month period was $26,482 compared to a net
loss of $1,054,265 for the same period the prior year. This significant
improvement is directly related to the restructuring costs of Cal-Central
incurred during the 1995 period. During the first quarter of 1996, Company
management agreed upon and completed a plan to consolidate all corporate
12
<PAGE>
administrative functions, including the corporate headquarters and the offices
of Chief Executive Officer, President and Chief Financial Officer with
personnel located at and within the Company's Springfield, Virginia facility.
This action is yielding lower administrative costs during current periods.
RESULTS OF OPERATIONS -- NINE MONTHS ENDED SEPTEMBER 30, 1996
AS COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 1995
Gross Revenue for the nine months ended September 30, 1996 declined 39%
from the same period in 1995, from $8,853,691 to $5,388,132. Coupon and
Advertising Sales, which represent 86% of total sales to date in 1996,
declined by 45% from the same period in 1995, due to the elimination of
advertising sales by the Cal-Central subsidiary. Coupon Sales from United
Coupon were marginally less than the prior year.
Franchise Fees increased by 195% during the nine month period of 1996
compared to the prior year, from $65,455 to $193,103. This increase reflects
initial success from expanded franchise marketing efforts that were initiated
in prior periods. Management intends to continue intensive efforts at placing
new franchise operations.
Other Income, which includes third party commercial printing revenues and
fees charged to franchisees in reimbursement of meeting and marketing fees,
increased by 88% during the nine months of 1996 compared to the prior year.
This increase is the direct result of expanded commercial printing operations
for third party organizations.
Production Expenses decreased by 41% during the initial nine months of 1996
compared to the same period in 1995, from $6,351,681 to $3,748,191, due to the
39% overall decline in total revenues and elimination of redundant functions
that were performed both within the Springfield production facility and the
Fort Lauderdale production facility during 1995.
General and Administrative Expenses decreased by 42% during the nine month
period of 1996 compared to the prior year, from $2,506,846 to $1,466,879. This
reduction of operating overhead reflects savings which have been achieved as a
result of the consolidation of administrative functions within the Springfield
headquarters and elimination of the former corporate offices in Fort Lauderdale
and Oklahoma City. These savings are expected to continue for the near term.
Franchise Development Costs decreased by 19% during the nine month period
ended September 30, 1996 compared to the same period in 1995. This overall
decline of $57,093 reflects better efficiency from franchise support and
marketing activities even though Franchise Fee revenue increased by 195%
during the 1996 period.
Total Interest Expense was approximately 2% less during the nine month
period of 1996 compared to the prior year. This savings reflects the benefit
that was achieved subsequent to July 30, 1996 due to the elimination of
$1,757,569 in subordinated debt and accrued interest as a result of the
exchange of convertible preferred stock for subordinated debt.
13
<PAGE>
Restructuring Costs in 1996 decreased by $362,549 from the nine month period
ended September 30, 1995 due to restructuring costs that were recorded in
1995 relating to restructuring of the Cal-Central business and disruption that
occurred for this subsidiary during the third quarter of 1995.
Net Loss for the nine months ended September 30, 1996 was $357,707 compared
to a loss of $946,798 during the same period in 1995. This 62% improvement is
related to elimination of the restructuring costs noted above and lower overall
operating costs associated with the consolidation of administrative, sales and
production activities within the Springfield headquarters and elimination of
the Fort Lauderdale and Oklahoma City offices.
14
<PAGE>
PART II -- OTHER INFORMATION
<TABLE>
<C> <S>
Item 1. Legal Proceedings
Omitted from this report as inapplicable.
Item 2. Changes in Securities
Effective July 30, 1996, the Company issued 1,757,569 shares of $.01
par value, Series C Convertible Preferred Stock with a face value of
$1,712,739, to holders of subordinated debentures. No gain or loss
was recorded as a result of this transaction.
Item 3. Default Upon Senior Securities
Omitted from this report as inapplicable.
Item 4. Submission of Matters to Vote of Securities Holders
On September 27, 1996, the Company convened the Annual Meeting of
Shareholders for the purpose of electing members of the Board of
Directors for the coming year and to address such other items as
were appropriate for the meeting. Due to an absence of quorum for
the meeting, it was adjourned until December 2, 1996.
Item 5. Other Information
Omitted from this report as inapplicable.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Omitted from this report as inapplicable
B. Reports on Form 8-K
On July 30, 1996, the Company filed Form 8-K describing the terms of
the Loan Conversion Agreement And Addendum To Loan Conversion
Agreement by and among UNICO, Inc., Renaissance Capital Partners,
Ltd., a Texas Limited Partnership, and Duncan Smith Investments Co.,
a Texas Corporation.
</TABLE>
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
Undersigned.
UNICO, INC.
November 11, 1996 By: /s/ Gerard R.Bernier
---------------------
Gerard R. Bernier
Chief Executive Officer
and President
By: /s/ Subhash Ghei
----------------------
Subhash Ghei
Chief Financial Officer
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 166,713
<SECURITIES> 0
<RECEIVABLES> 927,567
<ALLOWANCES> (450,078)
<INVENTORY> 259,904
<CURRENT-ASSETS> 1,426,962
<PP&E> 4,598,164
<DEPRECIATION> (1,888,370)
<TOTAL-ASSETS> 5,961,040
<CURRENT-LIABILITIES> 2,085,884
<BONDS> 0
0
1,712,792
<COMMON> 82,063
<OTHER-SE> 5,038,693
<TOTAL-LIABILITY-AND-EQUITY> 5,961,040
<SALES> 1,710,323
<TOTAL-REVENUES> 1,710,323
<CGS> 1,312,260
<TOTAL-COSTS> 1,603,419
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 71,422
<INCOME-PRETAX> 35,482
<INCOME-TAX> 9,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,482
<EPS-PRIMARY> .003
<EPS-DILUTED> .003
</TABLE>
