<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For quarterly period ended: September 30, 1997
------------------
Commission File number: 1-9429
------
ROTONICS MANUFACTURING INC.
---------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-2467474
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
17022 SOUTH FIGUEROA STREET, GARDENA, CALIFORNIA 90248
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(310) 538-4932
--------------
(Registrant's telephone number, including area code)
N/A
--------------------------
(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
- --
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at September 30, 1997
----- ---------------------------------
Common Shares 13,989,340 Shares
($.01 stated value)
Total Pages 15
Exhibit Index at Page 14
<PAGE>
ROTONICS MANUFACTURING INC.
INDEX
Page Number
-----------
PART I. FINANCIAL INFORMATION
Item 1 - Financial Statements
Balance Sheets -
September 30, 1997 (Unaudited)
and June 30, 1997 (Audited) 3
Statements of Income and
Accumulated Deficit -
Three Months Ended September 30, 1997
and 1996 (Unaudited) 4
Statements of Cash Flows -
Three Months Ended September 30, 1997
and 1996 (Unaudited) 5
Notes to Financial Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 12
SIGNATURES 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROTONICS MANUFACTURING INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, June 30,
1997 1997
------------- -----------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 12,100 $ 12,100
Accounts receivable, net of allowance for doubtful accounts
of $89,800 and $90,000, respectively (Notes 5 and 6) 4,896,700 5,334,400
Notes receivable 54,600 48,100
Inventories (Notes 2, 5 and 6) 5,512,100 5,602,700
Deferred income taxes, net (Note 8) 1,574,600 1,574,600
Prepaid expenses and other current assets 259,300 242,100
----------- -----------
Total current assets 12,309,400 12,814,000
Notes receivable, less current portion 455,000 455,000
Deferred income taxes, net (Note 8) 1,430,200 1,441,400
Property, plant and equipment, net (Notes 3, 5 and 6) 11,096,700 10,799,500
Intangible assets, net (Note 4) 4,995,600 5,065,500
Other assets 55,500 59,000
----------- -----------
$30,342,400 $30,634,400
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt (Note 6) $ 1,278,500 $ 1,281,300
Accounts payable (Note 10) 2,736,700 2,953,100
Accrued liabilities (Note 7) 861,600 865,300
----------- -----------
Total current liabilities 4,876,800 5,099,700
Bank line of credit (Note 5) 2,641,000 2,373,400
Long-term debt, less current portion (Note 6) 3,794,500 4,112,700
Other liabilities - 4,000
----------- -----------
Total liabilities 11,312,300 11,589,800
----------- -----------
Stockholders' equity:
Common stock, stated value $.01: authorized 20,000,000 shares;
issued and outstanding 13,987,564 and 14,065,995 shares, respectively,
net of treasury shares 24,309,700 24,422,500
Accumulated deficit (5,279,600) (5,377,900)
----------- -----------
Total stockholders' equity 19,030,100 19,044,600
----------- -----------
$30,342,400 $30,634,400
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
ROTONICS MANUFACTURING INC.
STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
(Unaudited)
Three Months Ended
September 30,
--------------------------
1997 1996
------------ -----------
Net sales $ 8,597,000 $10,229,900
------------ -----------
Costs and expenses:
Cost of goods sold 6,793,300 7,623,600
Selling, general and administrative expenses 1,566,800 1,532,800
------------ -----------
Total costs and expenses 8,360,100 9,156,400
------------ -----------
Income from operations 236,900 1,073,500
------------ -----------
Other (expense)/income:
Interest expense (159,700) (138,100)
Other income, net 38,000 25,400
------------ -----------
Total other expense (121,700) (112,700)
------------ -----------
Income before income taxes 115,200 960,800
Income tax provision (Note 8) (16,900) (443,600)
------------ -----------
Net income 98,300 517,200
Accumulated deficit, beginning of period (5,377,900) (6,254,300)
------------ -----------
Accumulated deficit, end of period $(5,279,600) $(5,737,100)
------------ -----------
------------ -----------
Income per common share (Note 9):
Net income:
Primary $ .01 $ .04
------- --------
------- --------
Fully diluted $ .01 $ .04(1)
------- --------
------- --------
Weighted average number of common and common
equivalent shares outstanding:
Primary 14,032,818 14,166,915
------------ -----------
------------ -----------
Fully diluted 14,032,818 14,166,915(1)
------------ -----------
------------ -----------
(1) The results of the fully diluted earnings per share computation is anti-
dilutive.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
ROTONICS MANUFACTURING INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
----------------------------
1997 1996
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 98,300 $ 517,200
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 440,900 385,200
Gain on sales of equipment (400) -
Deferred income tax provision 11,200 356,400
Provision for doubtful accounts 24,000 25,600
Changes in assets and liabilities:
Decrease in accounts receivable 413,700 31,300
Decrease/(increase) in inventories 90,600 (26,300)
Increase in prepaid expenses and other current assets (17,200) (136,400)
(Increase)/decrease in other assets (5,600) 16,900
Decrease in accounts payable (216,400) (327,800)
(Decrease)/increase in accrued liabilities (7,700) 44,600
----------- ----------
Net cash provided by operating activities 831,400 886,700
----------- ----------
Cash flows from investing activities:
(Advances)/repayments on notes receivable, net (6,500) 1,000
Capital expenditures (659,700) (239,800)
Proceeds from sales of equipment 1,000 -
----------- ----------
Net cash used in investing activities (665,200) (238,800)
----------- ----------
Cash flows from financing activities:
Borrowings under line of credit 1,972,000 2,391,700
Repayments under line of credit (1,704,400) (2,625,200)
Proceeds from issuance of long-term debt - 26,400
Repayment of long-term debt (321,000) (444,200)
Payment of common stock dividends - (100)
Repurchases of common stock (112,800) -
Proceeds from exercise of stock options - 6,100
----------- ----------
Net cash used in financing activities (166,200) (645,300)
----------- ----------
Net increase in cash - 2,600
Cash at beginning of period 12,100 11,600
----------- ----------
Cash at end of period $ 12,100 $ 14,200
----------- ----------
----------- ----------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 162,800 $ 140,600
----------- ----------
----------- ----------
Income taxes $ 75,400 $ 72,500
----------- ----------
----------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
ROTONICS MANUFACTURING INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-INTERIM REPORTING:
The interim financial information included herein is unaudited. This
information reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of operating results for the interim periods. This interim financial
information should be read in conjunction with the Rotonics Manufacturing Inc.
("the Company") Annual Report as filed on Form 10-K for the fiscal year ended
June 30, 1997.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of accounts receivable and trade payables approximates the
fair value due to their short-term maturities. The carrying value of the
Company's line of credit and notes payable is considered to approximate fair
market value because the interest rates of these instruments are based
predominately on variable reference rates.
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
Effective December 31, 1997, the Company will be required to adopt SFAS No. 128,
"Earnings per Share". SFAS No. 128 replaces primary EPS with basic EPS and
fully diluted EPS with diluted EPS. Basic EPS is computed by dividing reported
earnings by weighted average shares outstanding. Diluted EPS is computed the
same way as fully diluted EPS except that the calculation now uses the average
share price for the reporting period to compute dilution from options under the
treasury stock method. The adoption of this pronouncement is not expected to
have an impact on the Company's earnings per share.
NOTE 2 - INVENTORIES:
Inventories consist of:
September 30, June 30,
1997 1997
------------ ------------
Raw materials $ 2,937,900 $ 3,160,000
Finished goods 2,574,200 2,442,700
----------- ------------
$ 5,512,100 $ 5,602,700
----------- ------------
----------- ------------
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment consist of:
September 30, June 30,
1997 1997
------------- -----------
Land $ 1,039,500 $ 1,039,500
Buildings and building improvements 3,276,400 3,274,500
Machinery, equipment, furniture and fixtures 14,156,900 13,762,700
Construction in progress 612,300 359,900
----------- -----------
19,085,100 18,436,600
Less - accumulated depreciation (7,988,400) (7,637,100)
----------- -----------
$11,096,700 $10,799,500
----------- -----------
----------- -----------
6
<PAGE>
NOTE 4 - INTANGIBLE ASSETS:
Intangible assets consist of: September 30, June 30,
1997 1997
------------- -----------
Patents, net of accumulated amortization of
$96,300 and $95,200 $ 40,600 $ 35,200
Goodwill, net of accumulated amortization
of $2,145,200 and $2,070,000 4,955,000 5,030,300
---------- ----------
$4,995,600 $5,065,500
---------- ----------
---------- ----------
NOTE 5 - BANK LINE OF CREDIT:
The Company has a $5,000,000 revolving line of credit with Wells Fargo Bank.
The line matures July 15, 1999 and is secured by the Company's machinery and
equipment, accounts receivable and inventories. Interest is payable monthly at
the bank's prime rate. The bank's prime rate at September 30, 1997 was 8.5% per
annum. The loan agreement allows the Company to convert the outstanding
principal balance in increments of $250,000 to a LIBOR-based loan for periods up
to 90 days. At September 30, 1997, total borrowings under the Company's line of
credit was $2,641,000 of which $2,500,000 was borrowed under the LIBOR option.
The LIBOR borrowings consist of two borrowings of $1,250,000, both bearing a
LIBOR interest rate of 8.15625% per annum and maturing October 20, 1997 and
October 29, 1997, respectively. Proceeds from the loan were used for working
capital purposes. At September 30, 1997 the Company had approximately
$2,359,000 available for future borrowings under the revolving line of credit.
NOTE 6 - LONG-TERM DEBT:
Long-term debt consists of: September 30, June 30,
1997 1997
------------ ----------
Note payable - Bank (A) $2,133,300 $2,333,300
Note payable - Bank (B) 366,700 391,700
Note payable - Bank (C) 466,100 491,500
Note payable - Bank (D) 950,000 1,000,000
Note payable - Bank (E) 1,130,500 1,147,100
Other 26,400 30,400
---------- ----------
5,073,000 5,394,000
Less current portion (1,278,500) (1,281,300)
---------- ----------
$3,794,500 $4,112,700
---------- ----------
---------- ----------
(A) In May 1995, the Company restructured its credit agreement with Wells Fargo
Bank. The loan consists of a $4,000,000 sixty-month term loan. The note
is due in monthly principal installments of $66,700 plus interest at the
bank's prime rate (8.5% at September 30, 1997). In addition, the loan
agreement allows the Company to convert all or a portion of the outstanding
principal in increments of $250,000 to a LIBOR-based loan for periods up to
180 days. At September 30, 1997, the Company had $2,000,000 of the
outstanding principal balance under the LIBOR option at 8.15625% per annum
maturing on October 20, 1997. The note is secured by the Company's
machinery and equipment, accounts receivable and inventories and matures on
May 16, 2000.
(B) In fiscal 1996, the Company was advanced $500,000 on its machinery and
equipment term-loan commitment with Wells Fargo Bank. The proceeds were
used to repay amounts originally borrowed under the Company's revolving
line of credit to finance approximately $700,000 in machinery and equipment
purchases. The note is due in monthly principal installments of
approximately $8,300 plus interest at the bank's prime rate (8.5% at
September 30, 1997) or LIBOR interest rate option for periods up to six
months. At September 30, 1997, the total outstanding principal was under
the LIBOR option at 8.15625% per annum maturing October 20, 1997. The note
is secured by the Company's machinery and equipment and matures on May 15,
2001.
7
<PAGE>
(C) In March 1997, the Company was advanced $500,000 on its second machinery
and equipment term-loan commitment with Wells Fargo Bank. The proceeds
were used to repay amounts originally borrowed under the Company's
revolving line of credit to finance approximately $625,000 in machinery and
equipment purchased. The note is due in monthly principal installments of
approximately $8,500 plus interest at the bank's prime rate (8.5% per annum
at September 30, 1997) or LIBOR interest rate option for periods up to six
months. At September 30, 1997, the total outstanding principal was under
the LIBOR option at 8.15625 per annum maturing October 24, 1997. The note
is secured by the Company's machinery and equipment and matures on May 15,
2002.
(D) In June 1997, the Company was advanced $1,000,000 on its third machinery
and equipment term-loan commitment with Wells Fargo Bank. The proceeds
were used to repay amounts originally borrowed under the Company's
revolving line of credit to finance approximately $1,250,000 in machinery
and equipment purchases. The note is due in monthly principal installments
of approximately $16,700 plus interest at the bank's prime rate (8.5% per
annum at September 30, 1997) or LIBOR interest rate option for periods up
to three months. At September 30, 1997, the total outstanding principal
was under the LIBOR option at 8.15625% per annum maturing October 6, 1997.
The note is secured by the Company's machinery and equipment and matures on
June 15, 2002.
At September 30, 1997, the Company had available a term-loan commitment in
the amount of $1,200,000 for future machinery and equipment purchases.
Advances under the line will be subject to monthly interest only payments
at the bank's prime or LIBOR interest rate options until July 15, 1998 at
which time amounts borrowed will convert to a 60 month fully amortizable
loan.
(E) This note was issued to Wells Fargo Bank on September 15, 1994 in
connection with the purchase of real property in Bensenville, Illinois.
The note is due in monthly principal installments of approximately $5,500
plus interest at the bank's prime rate (8.5% per annum at September 30,
1997) on a twenty-year amortization with the outstanding principal due in
five years. The note is secured by a first trust deed on the real property
and matures on September 15, 1999.
NOTE 7 - ACCRUED LIABILITIES:
Accrued liabilities consist of:
September 30, June 30,
1997 1997
----------- ---------
Salaries, wages, commissions and related payables $ 686,700 $ 640,500
Other 174,900 224,800
--------- ---------
$ 861,600 $ 865,300
--------- ---------
--------- ---------
NOTE 8 - INCOME TAXES:
The components of the income tax provision were:
For the three months ended
September 30,
---------------------------
1997 1996
--------- ---------
Current:
Federal $ 500 $ 23,000
State 5,200 64,200
--------- ---------
5,700 87,200
--------- ---------
Deferred:
Federal 15,200 345,300
State (4,000) 11,100
--------- ---------
11,200 356,400
--------- ---------
$ 16,900 $ 443,600
--------- ---------
--------- ---------
8
<PAGE>
At September 30, 1997, the Company had net operating loss (NOL) carryforwards of
approximately $9,300,000 for federal income tax purposes. The NOL carryforwards,
which are available to offset taxable income of the Company and are subject to
limitations should a "change in ownership" as defined in the Internal Revenue
Code occur, will begin to expire in 2003 if not utilized. The federal NOL
carryforwards expire as follows:
Amount of unused operating Expiration during year
loss carryforwards ended June 30,
-------------------------- ----------------------
$4,600,000 2003
3,400,000 2004
600,000 2005
500,000 2006
200,000 2009
----------
$9,300,000
----------
----------
At September 30, 1997, the Company had a federal alternative minimum tax credit
of approximately $190,000 which is available to offset future federal income tax
once the Company is no longer subject to an alternative minimum tax for federal
income tax purposes.
NOTE 9 - COMPUTATION OF EARNINGS PER SHARE:
Primary and fully diluted earnings per share have been computed in accordance
with APB No. 15 "Earnings per Share", using the treasury stock method for
applicable common stock warrants and options.
NOTE 10- LAWSUIT SETTLEMENT:
On April 16, 1996, the Company was named as a defendant in a complaint filed by
Bonar U.S., Inc. in Delaware Superior Court. The complaint alleged claims for
breach of contract and promissory estoppel relating to an Agreement in Principle
entered into in connection with a proposed acquisition of the Company by Bonar
U.S., Inc. On April 3, 1996, the Company announced that it had terminated the
Agreement in Principle pursuant to its terms. The complaint requested damages
of $7,011,484. On May 17, 1996, the Company filed a counterclaim against Bonar
U.S., Inc. and Bonar Plastic, Inc. seeking damages totaling $25,237,725 for
breach of the Confidentiality Agreement with the Company, misappropriation of
trade secrets, intentional interference with a prospective economic advantage
which the Company obtained as a result of an indication of interest from a third
party and breach of a Royalty Agreement between Bonar Plastics, Inc. and one of
the Company's operating divisions (formally known as Custom Rotational Molding,
Inc.) In March 1997, the Company reached an amicable out of court settlement
with Bonar. The settlement involved mutual general releases by the parties,
dismissals of the actions brought by the parties and payments to Bonar of
$400,000 in March 1997 and $350,000 in September 1997. The $350,000 payment had
been previously accrued for and was included in accounts payable in the
accompanying June 30, 1997 balance sheet.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
Net sales for the three months ended September 30, 1997 decreased $1,632,900 or
16% to $8,597,000 compared to $10,229,900 for the same period last year. The
Company encountered several new obstacles in the first quarter of fiscal 1998
along with a marketplace which slowed down significantly during this period.
The decrease is also attributed to a $765,000 reduction in refuse container
sales when compared to the same period last year primarily due to a significant
refuse contract which was completed in September 1996. The Company also
encountered increased competition in the custom molded market as well as
customers which were experiencing their own internal problems resulting in a
$450,000 reduction in overall sales volumes. Management reports that the later
issues have been resolved, but continues to have mixed emotions about the
industry's current growth projections. The first several months have indicated
the possibility of an ongoing lackluster marketplace. However, management
continues to see increases in its backlog levels which currently are consistent
with prior year levels.
Cost of goods sold increased 4.5% to 79% of net sales for the three months ended
September 30, 1997 compared to 74.5% for the same period last year. The
increase in cost of goods sold is primarily related to the lackluster sales
volumes during the current period. As such, these lower sales volume levels
were not sufficient to effectively sustain gross margins consistent with prior
periods. The Company also realized some inefficiencies in operations at its
Commerce City, Colorado facility during the final stages of relocation. As of
September 1997, the relocation was substantially completed and the facility's
equipment was fully operational. Management is optimistic that the current
backlog levels will translate into improved sales volumes and gross margins in
the ensuing periods. Plastic resin costs are also expected to decrease slightly
during the next quarter, and if realized will contribute to improved results.
Selling, general and administrative expenses were $1,566,800, or 18.2% of net
sales for the three months ended September 30, 1997 compared with $1,532,800, or
15% for the same period last year. SG&A costs remained relatively consistent
with prior period even though as a percentage of net sales an increase was
reported. This increase is directly related to the lower sales volumes levels
in the current period. Management will continue to monitor these costs in
correlation to future sales volumes levels.
Total interest expense increased $21,600 to $159,700 for the three months ended
September 30, 1997 compared to $138,100 for the same period last year. The
increase is primarily related to an increase in the Company's debt structure of
approximately 1.3 million when compared to the same period last year. The
increase in the Company's debt is attributed to the Colorado facility purchase
and its subsequent improvements, and machinery and equipment acquisitions in the
later part of fiscal 1997 and the first three months of fiscal 1998 which were
financed by the Company's line of credit and machinery & equipment term loans.
Income taxes were $16,900 for the three months ended September 30, 1997 compared
to $443,600 for the same period last year. The decrease is directly related to
the reduced level of income from operations.
Net income was $98,300 or $.01 per common share for the three months ended
September 30, 1997 compared to $517,200 or $.04 per common share for the same
period last year. The decrease relates to the decreased sales volume levels
which hindered the preservation of the Company's gross margin goals. Again,
management is optimistic that current backlog levels should provide improved
sales volumes in the next quarter which should enhance future operating results.
10
<PAGE>
FINANCIAL CONDITION
Working capital decreased $281,700 to $7,432,600 at September 30, 1997 compared
to $7,714,300 at June 30, 1997. The decrease was primarily due to a reduction
in accounts receivable net of a reduction in accounts payable. The decreases in
accounts receivable is directly related to lower sales volumes during the period
ended September 30, 1997. The decrease in accounts payable is primarily related
to the payment of litigation settlement cost previously accrued for in fiscal
1997.
Cash provided by operations was $831,400 for the three months ended September
30, 1997 which was relatively consistent with prior period results of $886,700.
Although net income was below prior period results, the Company sustained
sufficient cash flows from operations to fund the majority of its capital
expenditure and debt repayment requirements.
The Company expended a total of $659,700 for property, plant and equipment
during the three months ended September 30, 1997, compared to $239,800 for the
same period last year. The increase is attributed to approximately $230,000
relating to additional improvements to the Colorado facility and the majority
of the remaining balance is attributed to two additional roto-molding machines
added to the Idaho facility, a second CNC router at the Chicago facility, and
resin silo projects in Florida and Colorado.
In July 1997, the Company renewed its $5 million secured line of credit with the
bank which extended its maturity date to July 15, 1999. Net borrowings under
the line of credit increased $267,600 to $2,641,000 between June 30, 1997 and
September 30, 1997. Current increases in the line are primarily related to
ongoing capital expenditures, including the building improvement in Commerce
City, Colorado, as mentioned above, until such time these costs are refinanced
under long-term debt arrangements. At September 30, 1997, the Company had
approximately $2,359,000 available for future borrowings under the revolving
line of credit.
On April 16, 1996, the Company was named as a defendant in a complaint filed by
Bonar U.S., Inc. in Delaware Superior Court. The complaint alleged claims for
breach of contract and promissory estoppel relating to an Agreement in Principle
entered into in connection with a proposed acquisition of the Company by Bonar
U.S., Inc. On April 3, 1996, the Company announced that it had terminated the
Agreement in Principle pursuant to its terms. The complaint requested damages
of $7,011,484. On May 17, 1996, the Company filed a counterclaim against Bonar
U.S., Inc. and Bonar Plastic, Inc. seeking damages totaling $25,237,725 for
breach of the Confidentiality Agreement with the Company, misappropriation of
trade secrets, intentional interference with a prospective economic advantage
which the Company obtained as a result of an indication of interest from a third
party and breach of a Royalty Agreement between Bonar Plastic, Inc. and one of
the Company's operating divisions (formally known as Custom Rotational Molding
Inc.) In March 1997, the Company reached an amicable out of court settlement
with Bonar. The settlement involved mutual general releases by the parties,
dismissals of the actions brought by the parties and payments to Bonar of
$400,000 in March 1997 and $350,000 in September 1997. The $350,000 payment had
been previously accrued for and was included in accounts payable in the
accompanying June 30, 1997 balance sheet.
Cash flows from operations in conjunction with the Company's revolving line of
credit and machinery and equipment loan commitment are expected to meet the
Company's needs for working capital, capital expenditures and repayment of long-
term debt for the foreseeable future.
11
<PAGE>
ROTONICS MANUFACTURING INC.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
11. Statement Regarding Computation of Per Share Earnings.
(b) REPORTS ON FORM 8-K
None.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on behalf by the undersigned
thereunto duly authorized.
Rotonics Manufacturing Inc.
Registrant
Date: October 15, 1997 /s/ SHERMAN MCKINNISS
----------------------------------------
Sherman McKinniss
President and Chief Executive Officer
13
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
PAGE
11 Statement Regarding Computation of Per Share Earnings 15
14
<PAGE>
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
EXHIBIT 11
Three Months Ended
September 30,
-------------------
1997 1996
------ ------
PRIMARY
Net income $ 98,300 $ 517,200
----------- -----------
----------- -----------
Weighted average number of common shares outstanding 14,032,818 14,164,550
Add - common equipvalent shares:
Shares issuable upon exercise of options to
purchase common stock - 2,365
----------- -----------
Weighted average number of common shares
used in computation of primary earnings per
common share 14,032,818 14,166,915
----------- -----------
----------- -----------
Primary earnings per common share $ .01 $ .04
----------- -----------
----------- -----------
FULLY DILUTED
Net income $ 98,300 $ 517,200
----------- -----------
----------- -----------
Weighted average number of common shares outstanding 14,032,818 14,164,550
Add - common equivalent shares:
Shares issuable upon exercise of options to
purchase common stock - 2,365(1)
----------- -----------
Weighted average number of common shares used in
computation of fully diluted earnings per
common share 14,032,818 14,166,915(1)
----------- -----------
----------- -----------
Fully diluted earnings per common share $ .01 $ .04(1)
----------- -----------
----------- -----------
(1) The results of the fully diluted earnings per share computation is
anti-dilutive.
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
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<PP&E> 19,085,100
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0
0
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<OTHER-SE> (5,279,600)
<TOTAL-LIABILITY-AND-EQUITY> (30,342,400)
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<CGS> 6,793,300
<TOTAL-COSTS> 8,360,100
<OTHER-EXPENSES> (38,000)
<LOSS-PROVISION> 21,480
<INTEREST-EXPENSE> 159,700
<INCOME-PRETAX> 115,200
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<EPS-PRIMARY> .01
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</TABLE>
