FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1997, 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: 33-10943-NY
PHOTON TECHNOLOGY INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2494774
- --------------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
1 Deerpark Drive, Suite F, Monmouth Junction, NJ 08852
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (732) 329-0910
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 [ ]
The number of shares of Common Stock without par value outstanding as of
December 31, 1997 was 1,238,509.
<PAGE>
INDEX
PHOTON TECHNOLOGY INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of December 31, 1997
and June 30, 1997.................................................
Consolidated Statements of Operations for the
six months ended December 31, 1997 and 1996.......................
Consolidated Statements of Operations for the
quarter ended December 31, 1997 and 1996..........................
Consolidated Statements of Cash Flows for the
six months ended December 31, 1997 and 1996.......................
Notes to Consolidated Financial Statements
December 31, 1997.................................................
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.....................
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................
Item 2. Changes in Securities.............................................
Item 3. Defaults Upon Senior Securities...................................
Item 4. Submission of Matters to a Vote of Security Holders...............
Item 5. Other Information.................................................
Item 6. Exhibits and Reports on Form 8-K..................................
SIGNATURES .....................................................................
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
December 31 June 30
1997 1997
---------- ----------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents ..................... $ 777,161 $1,367,703
Trade accounts receivable, less allowance
of $3,280 .................................... 1,396,830 2,078,250
Inventory
Finished goods .............................. 856,367 732,886
Work in process ............................. 502,927 472,109
Raw materials ............................... 718,870 619,581
---------- ----------
2,078,164 1,824,576
Prepaid expenses and other current assets ...... 430,800 325,943
---------- ----------
TOTAL CURRENT ASSETS ....... 4,682,955 5,596,472
PROPERTY AND EQUIPMENT
Furniture and fixtures ........................ 153,487 153,135
Machinery and equipment ....................... 2,225,191 2,192,333
---------- ----------
2,378,678 2,345,468
LESS: Accumulated depreciation ................. 1,645,524 1,569,689
---------- ----------
733,154 775,779
DEFERRED INCOME TAX ASSET ...................... 143,758 143,758
OTHER ASSETS ................................... 1,727,155 1,915,702
---------- ----------
$7,287,022 $8,431,711
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
Note: The balance sheet at June 30, 1997 has been derived from audited financial
statements at that date, and does not include all the information and notes
required under generally accepted accounting principles for complete financial
statements.
<PAGE>
<TABLE>
<CAPTION>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS - Continued
December 31 June 30
1997 1997
----------- -----------
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Bank indebtedness ................................ $ 1,174,221 $ 1,321,829
Accounts payable ................................. 831,707 1,061,135
Deferred income .................................. 56,421 11,924
Accrued expenses ................................. 149,740 170,448
Current portion of long term debt ................ 854,598 866,046
----------- -----------
TOTAL CURRENT LIABILITIES ........... 3,072,687 3,431,382
LONG TERM DEBT ..................................... 1,123,535 1,323,484
PREFERRED SHARES - Canadian Subsidiary ............. 1,958,147 1,962,137
SHAREHOLDERS' EQUITY
Preferred stock, $1,000 par value, authorized 500
shares; no shares issued or outstanding
Common Stock, no par value: authorized
3,333,333 shares; issued 1,292,477 shares,
including 53,968 and 55,291 shares in treasury 6,300,880 6,297,386
Accumulated deficit .............................. (4,581,857) (3,984,473)
Treasury stock, at cost .......................... (55,058) (56,433)
Cumulative foreign currency translation adjustment (531,312) (541,772)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY .......... 1,132,653 1,714,708
----------- -----------
$ 7,287,022 $ 8,431,711
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
Note: The balance sheet at June 30, 1997 has been derived from the audited
financial statements at that date, and does not include all the information and
notes required under generally accepted accounting principles for complete
financial statements.
<PAGE>
<TABLE>
<CAPTION>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Six Months Ended December 31,
1997 1996
----------- -----------
<S> <C> <C>
REVENUES
Net sales .............................. $ 4,013,074 $ 4,033,181
Other income ........................... 37,254 11,685
----------- -----------
4,050,328 4,044,866
COSTS AND EXPENSES
Cost of products sold .................. 1,749,609 1,648,784
Selling, general and administrative .... 1,974,446 1,634,390
Research and development ............... 444,549 449,473
Interest ............................... 136,931 160,168
Depreciation and amortization .......... 240,700 73,869
Goodwill amortization .................. 87,174 86,352
Foreign exchange loss (gain) ........... 14,305 (25)
----------- -----------
4,647,714 4,053,011
----------- -----------
Loss before income taxes ................. (597,384) (8,145)
Benefit for income taxes ................. ________ (10,572)
-----------
Net income (loss) ........................ ($ 597,384) $ 2,427
=========== ===========
Net income (loss) per common share ....... ($ .48) $ .00
=========== ===========
Weighted average number of common
shares outstanding ...................... 1,237,848 1,233,233
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Second Quarter Ended December 31,
1997 1996
----------- -----------
<S> <C> <C>
REVENUES
Net sales .............................. $ 1,964,289 $ 2,131,489
Other income ........................... 9,807 640
----------- -----------
1,974,096 2,132,129
COSTS AND EXPENSES
Cost of products sold .................. 913,398 874,772
Selling, general and administrative .... 969,888 908,155
Research and development ............... 260,055 200,113
Interest ............................... 54,664 78,718
Depreciation and amortization .......... 117,981 36,729
Goodwill amortization .................. 41,101 39,975
Foreign exchange loss(gain) ............ 15,095 (1,419)
----------- -----------
2,372,182 2,137,043
----------- -----------
Loss before income taxes ................. (398,084) (4,914)
Benefit for income taxes ................. ________ (6,390)
-----------
Net income (loss) ........................ ($ 398,084) $ 1,476
=========== ===========
Net income (loss) per common share ....... ($ .32) $ .00
=========== ===========
Weighted average number of common
shares outstanding ...................... 1,238,509 1,235,238
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended December 31,
OPERATING ACTIVITIES: 1997 1996
----------- -----------
<S> <C> <C>
Net income (loss) ....................................... ($ 597,384) $ 2,427
Adjustments to reconcile net income (loss)
to net cash provided (used) by
operating activities:
Depreciation and amortization ....................... 240,700 223,850
Other amortization .................................. 87,174 80,709
Deferred income tax benefit ......................... (10,572)
Changes in operating assets and liabilities:
Decrease in trade accounts receivable ............... 681,420 572,311
Increase in inventory ............................... (253,588) (269,034)
Increase in prepaid expenses and other current assets (104,857) (300,536)
Increase in other assets ............................ (15,051)
Decrease in accounts payable
and accrued liabilities ............................ (244,136) (104,849)
Increase (decrease) in deferred income .............. 44,497 (16,631)
----------- -----------
Net cash provided (used) by operating activities (161,225) 177,675
INVESTING ACTIVITIES:
Purchase of property and equipment ................... (14,946) (55,463)
Capitalized software ................................. (48,442) (139,000)
----------- -----------
Net cash used by investing activities .......... (63,388) (194,463)
----------- -----------
FINANCING ACTIVITIES:
Investment in patents ................................. (2,850)
Financing costs incurred .............................. (3,990) (7,982)
Decrease in bank indebtedness ......................... (147,608) (92,033)
Repayment of long term debt ........................... (211,397) (113,474)
Proceeds from issuance of common stock-Employee
Stock Purchase Plan .................................. 4,869 10,273
----------- -----------
Net cash used by financing activities .......... (358,126) (206,066)
Effect of exchange rate changes on cash ............... (7,803) 60,481
----------- -----------
NET DECREASE IN CASH
AND CASH EQUIVALENTS .................................. (590,542) (162,373)
CASH AND CASH EQUIVALENTS-BEGINNING ..................... 1,367,703 279,041
----------- -----------
CASH AND CASH EQUIVALENTS-ENDING ........................ $ 777,161 $ 116,668
=========== ===========
Supplemental disclosure of cash paid
Interest .............................................. $ 103,331 $ 146,706
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Photon Technology International Inc. (the "Company") is engaged in research,
development, manufacturing, sales and marketing of proprietary electro-optical
systems which enable customers in health care, environmental science and
industrial process control to perform advance analysis utilizing light. The
Company's major products are electro-optical and light-based instrumentation
which utilizes fluorescence technology. The primary markets are medical life
sciences, physical sciences, environmental and industrial.
The Company operates in one principal industry segment, the photonics industry.
The Company's products are sold on a worldwide basis to universities, research
hospitals, pharmaceutical companies, bio-tech companies, federal and state
government institutions, environmental companies and commercial business, all of
which are primarily engaged in research activities.
The accompanying consolidated financial statements of Photon Technology
International, Inc. have been prepared in accordance with generally accepted
accounting principles in the United States for interim financial information and
with the instructions to Form 10K and Article 10 of regulation S-X. Accordingly,
they 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 ended December 31, 1997 are not necessarily
indicative of the results that may be expected for the year ending June 30,
1998. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report or Form 10K for
the year ended June 30, 1997.
In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, Earnings per Share. Statement 128 replaced the
previously reported primary and fully diluted earnings per share with basic and
diluted earnings per share. Unlike primary earnings per share, basic earnings
per share excludes any dilutive effects of options, warrants, and convertible
securities. Diluted earnings per share is very similar to the previously
reported fully diluted earnings per share. All earnings per share amounts for
all periods have been presented, and where necessary, restated to conform to the
Statement 128 requirements.
NOTE B -- COMPARATIVE AMOUNTS
Certain comparative amounts in the prior year have been reclassified to conform
with the presentation adopted in the current fiscal year.
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the quarter and six months ended December 31, 1997 of $2.0 million
and $4.0 million, respectively, decreased $167,000 or 7.8% and $20,000 or 0.5%,
respectively, compared to the same periods of fiscal 1997. These decreases
reflect the impact of product orders received late in the quarter which have a
45-60 day lead time to produce and ship to customers.
Total revenues for the quarter and six months ended December 31, 1997 of $2.0
million and $4.1 million, respectively, which include net sales and other
income, decreased $158,000 or 7.4% and increased $5,000 or 0.1%, respectively,
compared to the corresponding prior year periods. This performance reflects both
the lower sales impact which was offset by an increase in other income. Other
income for the first six months of fiscal 1998 increased by $26,000 primarily
due to interest earned on cash equivalents.
Cost of products sold for the second quarter of fiscal 1998 was $913,000 or
46.5% of net sales, which compares to $875,000 or 41.0% of net sales in the same
period of fiscal 1997. The increase of $38,000 or 4.3%, was due both to
increased costs related to plant production operations and increased shipping
costs. Cost of products sold for the six months ended December 31, 1997 was $1.7
million, or 43.4% of net sales compared to $1.6 million or 40.9% for the prior
six month period. Increased costs are a result of increases in plant production
operations and increased shipping costs.
Selling (including marketing), general and administrative expenses of $970,000
for the second quarter and $2.0 million for the six months of fiscal 1998
increased $346,000 or 20.8% and $62,000 or 6.8%, respectively, for the
comparable periods of fiscal 1997. These expenses as a percentage of net sales
increased from 42.6% to 49.4% in the second quarter and from 40.5% to 49.2% for
the six month period. The increase in selling, general and administrative
expense as a percentage of net sales in the quarter and six month periods
primarily related to increased marketing and selling expenses for advertising
and trade shows to develop anticipated sales increases. These costs are
anticipated to level off to a normal level during the remainder of the fiscal
year.
Research and development expenditures for the second quarter of fiscal 1998 were
$260,000 or 13.2% of net sales and for the first six months of fiscal 1998
totaled $445,000 or 11.1% of net sales. In comparison to the prior year, these
expenses were $200,000 or 9.4% for the quarter and $449,000 or 11.1% for the six
month period. An additional $52,000 of software development expenses, which
represents 1.3% of net sales, was capitalized for the six months ended December
31, 1997 and represents a significant reduction in software capitalization in
comparison to the same prior year period. These expenses year-to-year are due to
the level of project activity for new products.
Interest expense for the six months ended December 31, 1997 of $137,000
decreased $23,000 or 16.7% in comparison to the prior year periods. This
decrease primarily relates to interest on long term debt related to financing
activities in prior years. Interest expense for the second quarter of fiscal
1998 of $55,000 decreased $24,000 or 43.6% compared to fiscal 1997.
Depreciation and amortization of $159,000 for the second quarter of fiscal 1998
and $328,000 for the first six months of fiscal 1998 increased by $83,000 or
108.2% and by $168,000 or 105%, respectively in comparison to the same periods
of fiscal 1997. This increase was primarily due to the amortization of software
development costs incurred in prior years.
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
RESULTS OF OPERATIONS (continued)
Foreign exchange represented nominal losses of $15,095 and $14,305 for the
quarter and six months ended December 31, 1997, respectively. The current year
loss in comparison to the gain of $25 for the first six months of the prior year
was due to the mix of transactional activity.
Deferred tax benefits of $0 for the quarter and $0 for the six months compared
to $6,000 and $11,000, respectively for the same prior year periods. The
deferred tax benefits in related prior periods to timing differences between
book and tax income related to the Canadian and German subsidiaries. The tax
benefits represent a continuing reversal of the liability that was established
during the year ended June 30, 1995.
The Company reported a net loss of $398,000 for the second quarter of fiscal
1998, compared to net income of $1,000 for the same prior year quarter. For the
six month period ended December 31, 1997, the net loss was $597,000 in
comparison to $2,000 for the same prior year six months. Continued expenses
related to advertising and trade shows to develop anticipated sales increases,
increased costs of production and the amortization of software development costs
were the significant items which impacted the net loss.
The resulting loss per share performance based on the number of common shares
outstanding each period was $(.48) and $(.32) per share for the quarter and six
months ended December 31, 1997, in comparison to no earnings per share
respectively for the same prior year periods.
LIQUIDITY AND CAPITAL RESOURCES
The working capital of the Company at December 31, 1997 was $1,610,000 compared
to $2,165,000 at June 30, 1997; a decrease of $555,000 or 25.6%
Current assets of $4,683,000 decreased $913,000 or 16.2% from the end of fiscal
1997. This change primarily reflected a decrease of $681,000 or 32.8% in trade
accounts receivable which was partially offset by an increase in prepaid
expenses and other current assets of $105,000 or 32.2%. The change in trade
receivables primarily related to strong collection activity and the lower sales
volume during the six months ended December 31, 1997. The trade accounts
receivable balance of $1.4 million represents 2.1 months of sales in comparison
to 3.0 months of sales at June 30, 1997. The inventory level of $2.1 million at
December 31, 1997, which is an increase of $253,000 or 13.8% compared to the
inventory balance at June 30, 1997, reflects both a higher level of production
volume to support future sales, and new product inventory. This inventory
balance represents 7.1 months of sales in inventory based on anticipated sales
volume and compares to 6.5 months of sales in inventory at the end of fiscal
1997. The increase in other current assets mainly related to the timing of: (a)
prepaid employee benefit insurance; (b) prepaid general insurance premiums; (c)
reimbursable value added taxes (VAT) and general goods and services taxes (GST);
(d) prepaid legal services; and (e) trade show deposits and related marketing
costs.
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
LIQUIDITY AND CAPITAL RESOURCES (continued)
Current liabilities of $3,073,000 decreased $358,000 or 10.4% in comparison to
the prior year end. This decrease was due to: (a) reduction in notes payable to
banks of $147,000 of 11.1% based on pay down of the German subsidiary bank line;
(b) reduction in trade accounts payable of $223,000 or 21.0% based on payment
activity; (c) lower deferred income of $17,000 or 33.4% due to revenue
recognition on customer orders; lower accrued liabilities of $20,000 or 11.7%
due to reversal of year end accruals in relation to actual expenses incurred and
primarily related to agent and sales representative commissions; and (d) a
reduction in the current portion of long term debt by $11,000 or 1.2%. This was
offset by an increase in deferred income of $44,000 or 366.7%.
As of December 15, 1997 the Company renewed its working capital line of credit
facility with Silicon Valley Bank of California for $2,000,000. This credit
facility has a one (1) year term (expiring December 14, 1998) and carries an
interest rate charge at the prime rate plus 1.5% (approximately 10.0% at
December 14, 1998). Interest is due and payable monthly, and the principal is
due at maturity. The collateral for the line represents a perfected first
security interest in all assets of the Company, its wholly-owned Canadian
subsidiary and United Kingdom branch office. The Company will retain ownership
of intellectual property and is restricted on the pledge of this property to any
other party. The advance rate is based on 75% against eligible domestic and
Canadian receivables within 90 days from invoice date and 90% against insured or
letter of credit backed foreign receivables. No clean-up period is required
during the term of the loan. The securities related to the Covington Capital
debenture and the MLTV note are subordinated to the bank debt. The balance
outstanding at December 31, 1997 was $1.2 million.
Bank indebtedness also includes the outstanding balance of $154,000 US (276,000
DM) at December 31, 1997 drawn on a credit facility with the Stadparkasse Bank
of Wedel, Germany. The total line of credit available is 400,000 DM. Interest is
charged on a quarterly basis at the German Federal Bank's discount rate plus two
points.
During December 1995 the Company agreed to pay MLTV the principal amount of
$20,000 per month for a twenty-four (24) month period for a total of $480,000.
The balance of $291,000 would be due at the end of the two year term. As of June
30, 1997, the Company has paid $140,000 and reduced the total outstanding
balance to $631,000. The Company is not required to pay any additional interest
on the outstanding balance under this agreement unless the Company makes a late
payment or an event of default under the terms of the agreement occurs. On June
21, 1996, MLTV agreed to defer four payments from June 1996 through September
1996. As of December 31, 1997, the outstanding balance remained at $631,000. The
deferred amount will be subject to interest in accordance with the agreement.
As a result of the modification of the credit facility with Silicon Valley Bank
on November 27, 1996, the Company has agreed to make no payments of principal on
this subordinated debt to MLTV prior to December 1997 unless the Company has
closed a "qualified offering" prior to such date. If a qualified offering has
not closed, the Company will pay MTLV a balloon payment of $631,000. Once a
qualified offering has closed, principal payments of the subordinated debt to
MLTV shall resume according to the previous schedule, as provided in the terms
of the subordinated note.
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
LIQUIDITY AND CAPITAL RESOURCES (continued)
On October 31, 1995, the Company entered into a Debenture agreement for $1.5
million Canadian dollars ($1.1 million US) through C.I.-C.P.A. Business Ventures
Fund, Inc. a capital fund of Covington Capital Corporation ("Covington Capital")
(the "Covington Agreement"). This subordinated debt has a term of five (5) years
at an interest rate of 12% per annum. This financing was an important source of
funds which provided for investment to expand sales territory coverage through
addition of personnel, increase marketing support, and continue research and
development efforts in both hardware and software for new products and product
cost reductions.
In July 1994, documents were fully executed between the "ODC" and the Company
for a term loan facility in the amount of $500,000 Canadian dollars. The loan
credit facility was established to allow advance requests for equipment,
inventory and training expenditures associated with moving the production
operation from New Jersey plant to the London, Ontario, Canadian plant. The
balance outstanding as of December 31, 1997 on the ODC fixed loan was $239,561
Canadian dollars ($167,501 US) based on specific advance requests approved
through this date. The term of repayment is forty (40) months and includes an
interest rate of 6.75%. This term loan is classified as long term debt with a
current portion equal to twelve months of principal payments.
On March 7, 1997, the Company raised its first significant equity financing
since 1987, for $2,000,000, net $1,958,147 (for detail on specific terms,
referred to Note I to the Financial Statements in Form 10K). The importance of
this financing is that it allows the Company to pursue its growth goals. The
Company will use the financing for new product introduction and to expand its
sales and marketing coverage.
The major risk to the Company is the timing of sales following the Company's
sales promotional campaigns. Generally there is a six month sales cycle, but the
sales cycles can lengthen due to economic conditions. Should the sales cycle
become too long, the Company does not have the financial resources to sustain
the sales and marketing plans and would have to cut back on its marketing and
sales efforts.
If the Company has to repay some of the short term maturing debt, it will loose
a substantial portion of its financial resources to pursue its growth plans.
Whereas there is every reason to believe that the Company can refinance its
maturing debt, there is no guarantee that it will be able to do so.
The Company will continue to manage within its financial resources and attempt
to balance its working capital needs with cash flow generated from operations
and available current financing. The Company will continue to seek additional
financing to fully exploit its sales and marketing potential. The Company cannot
be certain that it will be successful in efforts to raise additional funds.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Neither the Company nor any of its subsidiaries is currently a party to
nor is any of their property the subject of any legal proceedings which would be
material to the business or financial condition of the Company on a consolidated
basis.
Item 2. Changes in Securities.
Not Applicable
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
The Company held its annual meeting of shareholders on Friday, December
5, 1997. The only matter considered and voted upon at the meeting was the
election of one director for a three-year term.
The voting for the director:
James F. Mrazek was 1,093,551 shares for, 334 shares against
and 144,624 withheld.
Item 5. Other Information.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
None
<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.
PHOTON TECHNOLOGY INTERNATIONAL, INC.
Date: February 13, 1998 By: /s/Charles G. Marianik
----------------------
Charles G. Marianik
President, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: February 13, 1998 By: /s/Howard D. Zumbrun
-------------------
Howard D. Zumbrun
Vice President,
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 777,161
<SECURITIES> 0
<RECEIVABLES> 1,396,830
<ALLOWANCES> 0
<INVENTORY> 2,078,164
<CURRENT-ASSETS> 4,682,955
<PP&E> 2,378,678
<DEPRECIATION> 1,645,524
<TOTAL-ASSETS> 7,287,022
<CURRENT-LIABILITIES> 3,072,687
<BONDS> 1,123,535
0
0
<COMMON> 6,300,880
<OTHER-SE> (5,168,227)
<TOTAL-LIABILITY-AND-EQUITY> 7,287,022
<SALES> 4,013,074
<TOTAL-REVENUES> 4,050,328
<CGS> 1,749,609
<TOTAL-COSTS> 1,749,609
<OTHER-EXPENSES> 2,761,174
<LOSS-PROVISION> 136,931
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (597,384)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
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<NET-INCOME> (597,384)
<EPS-PRIMARY> (.48)
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</TABLE>
