FORM 10-QSB
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 MARCH 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: 33-10943-NY
PHOTON TECHNOLOGY INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2494774
- --------------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
1 Deer Park Drive, Suite F, Monmouth Junction, NJ 08852
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number, Including Area Code: (732) 329-0910
--------------
Check whether the Issuer (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 March
31, 2000 was 1,182,103.
<PAGE>
INDEX
PHOTON TECHNOLOGY INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION PAGE
- ----------------------------------- ----
Item 1. Financial Statements:
Consolidated Balance Sheets as of March 31, 2000........ 3 - 4
Consolidated Statements of Operations and
Comprehensive Income (Loss)
three months ended March 31, 2000 and 1999.............. 5
Consolidated Statements of Operations and
Comprehensive Income (Loss)
nine months ended March 31, 2000 and 1999............... 6
Consolidated Statements of Cash Flows for the
nine months ended March 31, 2000 and 1999............... 7 - 8
Notes to Consolidated Financial Statements
March 31, 2000........................................... 9 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........... 11 - 14
PART II. OTHER INFORMATION
- -------------------------------
Item 1. Legal Proceedings....................................... 15
Item 2. Changes in Securities................................... 15
Item 3. Defaults Upon Senior Securities......................... 15
Item 4. Submission of Matters to a Vote of Security Holders..... 15
Item 5. Other Information........................................ 15
Item 6. Exhibits and Reports on Form 8-K......................... 15
SIGNATURES ............................................................ 16
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
March 31
2000
----------
ASSETS (Unaudited)
<S> <C>
CURRENT ASSETS
Cash and cash equivalents $ 149,484
Trade accounts receivable, less allowance
of $4,962 1,061,807
Inventory
Finished goods 488,125
Work in process 239,296
Raw materials 822,319
----------
1,549,740
Prepaid expenses and other current assets 231,778
----------
TOTAL CURRENT ASSETS 2,992,810
PROPERTY AND EQUIPMENT
Furniture and fixtures 154,784
Machinery and equipment 2,300,065
----------
2,454,849
LESS: Accumulated depreciation 2,007,748
----------
447,101
OTHER ASSETS
Intangible Assets 1,134,497
Note Receivable 840,456
----------
$5,414,864
==========
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS - Continued
March 31
2000
-----------
(Unaudited)
<S> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank indebtedness $ 571,269
Accounts payable 450,278
Deferred Revenue 60,323
Accrued expenses 189,139
Current portion of long term debt and capital lease obligations 892,408
-----------
TOTAL CURRENT LIABILITIES 2,163,417
LONG TERM DEBT AND CAPITAL LEASE OBLIGATIONS 657,796
PREFERRED SHARES - Canadian Subsidiary 1,958,147
STOCKHOLDERS' 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 110,374 shares in treasury 6,310,870
Accumulated deficit (5,476,541)
Treasury stock, at cost (48,995)
Accumulated Other Comprehensive Loss (149,830)
-----------
TOTAL STOCKHOLDERS' EQUITY 635,504
-----------
$ 5,414,864
===========
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS) - (UNAUDITED)
Three Months Ended
March 31,
----------------------------
2000 1999
----------- -----------
<S> <C> <C>
REVENUES
Net sales $ 1,579,720 $ 1,853,745
Other income 109,209 18,554
----------- -----------
1,688,929 1,872,299
COSTS AND EXPENSES
Cost of products sold 763,820 841,063
Selling, general and administrative 580,247 795,613
Research and development 152,910 138,562
Interest 54,068 68,213
Depreciation and amortization 103,312 176,769
Foreign exchange (income) loss (4,411) 9,171
----------- -----------
1,649,946 2,029,391
----------- -----------
Income (loss) before income taxes 38,983 (157,092)
Income taxes -0- 10,500
----------- -----------
Net Income (Loss) $ 38,983 ($ 167,592)
=========== ===========
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustment (10,789) (49,877)
----------- -----------
Total Comprehensive Income (Loss) $ 28,194 ($ 217,469)
=========== ===========
Net Income (Loss) per common share $0.03 ($ 0.14)
=========== ===========
Weighted average number of common
shares outstanding 1,179,326 1,169,694
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS) - (UNAUDITED)
Nine Months Ended
March 31,
----------------------------
2000 1999
----------- -----------
<S> <C> <C>
REVENUES
Net sales $ 5,558,444 $ 5,711,803
Other income 239,918 113,365
----------- -----------
5,798,362 5,825,168
COSTS AND EXPENSES
Cost of products sold 2,666,801 2,521,051
Selling, general and administrative 2,152,075 2,300,650
Research and development 460,304 430,544
Interest 160,071 203,389
Depreciation and amortization 340,661 524,335
Foreign exchange (income) loss (13,042) 29,222
----------- -----------
5,766,870 6,009,191
----------- -----------
Income (Loss) from continuing operations and
before income taxes 31,492 (184,023)
Income taxes -0- 24,500
----------- -----------
Net Income (Loss) $ 31,492 ($ 208,523)
=========== ===========
Other Comprehensive Income:
Foreign Currency Translation Adjustment 410,870 16,913
----------- -----------
Total Comprehensive Income (Loss) $ 442,362 ($ 191,610)
=========== ===========
Net Income (Loss) per common share $ 0.03 ($ 0.18)
=========== ===========
Weighted average number of common
shares outstanding 1,177,527 1,168,915
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
Nine Months Ended
March 31,
------------------------
OPERATING ACTIVITIES: 2000 1999
--------- ---------
<S> <C> <C>
Net Income (Loss) $ 31,492 ($208,523)
Adjustments to reconcile net loss to net
cash provided (used) by operating activities:
Depreciation 125,646 145,897
Amortization 215,008 378,438
Decrease in deferred income taxes 0 24,500
Gain from sale of subsidiary (108,709) 0
Changes in operating assets and liabilities
(Increase) decrease in trade accounts receivable (91,070) 440,346
(Increase) decrease in inventory (17,801) 141,253
(Increase) decrease in prepaid expenses and other
current assets (83,532) (19,411)
Increase (decrease) in accounts payable and
accrued liabilities (29,505) (354,607)
Increase in deferred revenue 10,715 (30,622)
--------- ---------
Net cash provided (used) by operating activities 52,244 517,271
--------- ---------
INVESTING ACTIVITIES:
Proceeds from sale of subsidiary 1 0
Purchase of property and equipment (24,379) (19,812)
Capitalized software (191,921) (59,052)
--------- ---------
Net cash (used) by investing activities (216,300) (78,864)
--------- ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCING ACTIVITIES:
Increase (decrease) in bank indebtedness 183,650 (356,791)
Repayment of long-term debt (113,313) (238,510)
Proceeds from exercise of stock options 1,500 0
Proceeds from issuance of common stock - Employee
Stock Purchase Plan 2,572 3,478
--------- ---------
Net cash provided (used) by financing activities 74,409 (591,823)
--------- ---------
Effect of exchange rate changes on cash (22,526) 14,511
--------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (112,173) (138,905)
CASH AND CASH EQUIVALENTS-BEGINNING 261,657 258,007
--------- ---------
CASH AND CASH EQUIVALENTS-ENDING $ 149,484 $ 119,102
========= =========
Supplemental disclosure of cash paid for:
Interest $ 158,183 $ 203,223
</TABLE>
See Notes to Consolidated Financial Statements
7
<PAGE>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED) - Continued
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTION
The Company sold the PhotoMed GmbH subsidiary for a sum of $150,001, which
included cash of $1.00 and a note of $840,456, consisting of the remaining
$150,000 sale price and $690,456 of trade accounts receivable outstanding from
PhotoMed as of December 1, 1999.
See Notes to Consolidated Financial Statements
8
<PAGE>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000
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 10-KSB and Regulation S-B. 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
nine-month period ended March 31, 2000 are not necessarily indicative of the
results that may be expected for the year ending June 30, 2000. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report or Form 10-KSB for the year
ended June 30, 1999.
NOTE B -- COMPARATIVE AMOUNTS
Certain comparative amounts in the prior year have been reclassified to conform
to the presentation adopted in the current fiscal year.
NOTE C - DISCONTINUED OPERATIONS
On December 1, 1999, the Company sold its one hundred percent ownership of its
German subsidiary, PhotoMed GmbH, to the Company's Chairman and Chief Executive
Officer, Charles G. Marianik. PhotoMed GmbH entered into an exclusive
distributorship of the Company's products in Germany, Scandinavia and several
other European countries. In addition, PhotoMed GmbH will retain its exclusive
distributorship for Omega/USA in Germany and Austria.
The operations of PhotoMed GmbH for the five months ended November 30, 1999 and
the quarter and nine months ended March 31, 1999 are included with the results
of operations of the Company as a whole in the Consolidated Statements of
Operations and Comprehensive Income (Loss). The results of operations of
PhotoMed for the five months ended November 30, 1999 were net revenues of
$809,201, less costs and expenses of $770,497, for income from operations of
$38,704.
9
<PAGE>
PHOTON TECHNOLOGY INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2000
NOTE C - DISCONTINUED OPERATIONS (continued)
The results of operations of PhotoMed for the nine months ended March 31, 1999
were net revenues of $1,092,147, less costs and expenses of $1,083,434, for
income from operations of $8,713. The results of operations of PhotoMed for the
three months ended March 31, 1999 were net revenues of $304,876, less costs and
expenses of $355,542, for a loss from operations of $(50,666).
Included with the current fiscal year's consolidated income from operations as
other income is a gain of $108,709 from the sale of the PhotoMed GmbH
subsidiary.
The results of PhotoMed operations, including the gain of sale of the
subsidiary, on a per share performance based on the weighted average number of
common shares outstanding was income of $0.12 per share for the nine months
ended March 31, 2000. This is in comparison to a loss of $(0.04) per share and
income of $0.01 per share for the quarter and nine months ended March 31, 1999,
respectively.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report or Form 10-KSB for the
year ended June 30, 1999.
10
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Net sales for the quarter and nine months ended March 31, 2000 of $1.6 million
and $5.6 million decreased $274,000, or 14.8%, and $153,000, or 2.7%,
respectively, compared to the same periods of fiscal 1999. These decreases
reflect the impact of the PhotoMed sale offset by a higher sales order backlog
in the current fiscal year carried over from fiscal 1999.
Net sales for the North American sales offices for the quarter and nine months
ended March 31, 2000 of $1.4 million and $4.0 million increased $72,000, or
5.3%, and $63,000, or 1.6%, respectively, in comparison to the same periods in
fiscal 1999. Net sales for the UK sales office for the same periods were
$164,000 and $811,000. These amounts reflect a decrease of $47,000, or 22.3%,
and an increase of $51,000, or 6.7%, for the three and nine-month periods,
respectively. Net sales for PhotoMed for the quarter and nine months ended March
31, 1999 were $299,000 and $999,000, respectively.
Total revenues for the quarter and nine months ended March 31, 2000 of $1.7
million and $5.8 million, which include net sales and other income, decreased
$183,000, or 9.8%, and $27,000, or 0.5%, respectively, compared to the same
periods of fiscal 1999. This performance reflects impact of decreased net sales
resulting from the PhotoMed sale and increased other income. Other income for
the quarter and nine months ended March 31, 2000 was $109,000 and $240,000,
respectively, and included $103,000 of proceeds from State of New Jersey tax
loss sale in the current quarter. Other income for the quarter and nine months
ended March 31, 1999 was $19,000 and $113,000, respectively.
Cost of products sold for the third quarter of fiscal 2000 was $764,000, or
48.4% of net sales, which compares to $841,000, or 45.4% of net sales for the
same period of fiscal 1999. This decrease of $77,000, or 9.2%, was primarily due
to the PhotoMed sale offset by an increase of the reserve for future loss of
inventory value against the same period in fiscal 1999. Cost of products sold
for PhotoMed for the third quarter of fiscal 1999 was $196,000. Cost of products
sold for the nine months ended March 31, 2000 was $2.6 million, or 48.0% of net
sales, which compares to $2.5 million, or 44.1% of net sales, for the same
period of fiscal 1999. This was an increase of $146,000, or 5.8%, and was
primarily due to increased service costs and a $129,000 increase of the
aforementioned increase in inventory reserves.
Selling (including marketing), general and administrative expenses of $580,000,
or 36.7% of net sales, for the third quarter of fiscal 2000 decreased $215,000,
or 27.1%, in comparison to $796,000, or 42.9% of net sales, for the same period
in fiscal 1999. This decrease resulted from $132,000 and $83,000 decreases in
selling and marketing, and general and administrative expenses, respectively.
Selling and marketing expenses for PhotoMed were $103,000 for the third quarter
of fiscal 1999.
For the nine-month period ended March 31, 2000 selling, general and
administrative expenses of $2.1 million, or 38.7% of net sales, decreased
$149,000, or 6.5%, from $2.3 million, or 40.3% of net sales, in fiscal 1999.
This decrease was due primarily to a $143,000 decrease in general and
administrative expenses in comparison to the prior fiscal year. Selling and
marketing expenses for PhotoMed were $309,000 for the nine-month period of
fiscal 1999.
11
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS (continued)
- ---------------------------------
Research and development expenses for the third quarter and nine months ended
March 31, 2000 were $153,000, or 9.7% of net sales and $460,000, or 8.3% of net
sales, respectively. In comparison to the prior fiscal year, these expenses were
$139,000, or 7.5% of net sales for the quarter, and $431,000, or 7.5% of net
sales for the nine-month period. An additional $192,000 of software development
expenses, which represents 3.4% of net sales, was capitalized for the nine
months ended March 31, 2000 in comparison to $59,000 for the same period in
fiscal 1999. These expenses are due to the level of project activity for new
products.
Interest expense for the nine months ended March 31, 2000 of $160,000 decreased
$43,000, or 21.3%, in comparison to the prior fiscal year. Interest expense for
the second quarter of $54,000 decreased $14,000, or 20.7%, in comparison to the
same period in fiscal 1999. These decreases primarily relate to the decreased
level of average bank indebtedness in comparison to the prior fiscal year.
Depreciation and amortization of $103,000 for the third quarter and $341,000 for
the nine months ended March 31, 2000 decreased $73,000, or 41.6%, and $184,000,
or 35.0%, respectively, in comparison to the same periods in fiscal 1999. These
decreases were primarily due to no amortization in the current fiscal year
relating to specific goodwill of the PhotoMed GmbH subsidiary, which was fully
amortized by the fourth quarter of fiscal 1999, as well as the general impact of
the PhotoMed sale. Depreciation and amortization for PhotoMed for the three and
nine months ended March 31, 1999 were $45,000 and $148,000, respectively.
Foreign exchange income for the quarter and nine months ended March 31, 2000 of
$4,000 and $13,000, respectively, compares to losses of $9,000 and $29,000 for
the same periods in fiscal 1999, due to a mix of transactional activity.
The Company reported net income of $39,000 for the third quarter, compared to a
net loss of $168,000 for the third quarter of the prior fiscal year. For the
nine months ended March 31, 2000 the income was $31,000 in comparison to a net
loss of $209,000 for the same period in fiscal 1999. The gain on the sale of the
PhotoMed GmbH subsidiary, the proceeds from the tax loss sale, and increases in
cost of products sold discussed above were major impacts on income.
The resulting per share performance based on the weighted average number of
common shares outstanding for each period was net income of $0.03 and $0.03 per
share for the quarter and nine months ended March 31, 2000, in comparison to net
losses of $(0.14) and $(0.18) per share for the same periods in fiscal 1999.
12
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The working capital of the Company at March 31, 2000 was $830,000 compared to
$1.8 million at June 30, 1999, a decrease of $1.0 million, or 45.0%.
Current assets of $3.0 million decreased $290,000, or 8.8%, from June 30, 1999.
This change primarily reflects decreases of $112,000 and $175,000 in cash and
accounts receivable, respectively. These changes reflected decreases of 42.9%
and 14.1% of these respective balances at June 30, 1999. The decrease in
accounts receivable reflects the impact of the sale of the PhotoMed GmbH
subsidiary. The inventory balance represented 5.2 months of sales in inventory,
which is comparable to the 5.5 months of sales in inventory at June 30, 1999.
The trade accounts receivable balance of $1.1 million represents 1.72 months of
sales in comparison to 1.88 months of sales at June 30, 1999.
Current liabilities of $2.2 million increased $724,000, or 50.3%, in comparison
to the balance as of June 30, 1999. This increase was due principally to an
increase in current portion of long-term debt of $733,000, or 459.3% of the
balance as of June 30, 1999. The significant increase of the current portion of
long-term debt is due to the inclusion of the entire balance of the Covington
Capital debt facility as a current debt.
As of December 13, 1999 the Company renewed its working capital line of credit
with Silicon Valley Bank of California for $2,000,000. This credit facility has
a one (1) year term (expiring December 13, 2000) and carries an interest rate at
the prime rate plus 1.5% (approximately 10.50% at March 31, 2000). 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 the assets of
the Company, its wholly owned Canadian subsidiary and United Kingdom branch. 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 ninety (90) days from
invoice date and 90% against insured or letter of credit domestic and foreign
receivables. The Company is not required to pay the outstanding balance in full
at any time during the term of the note. The balance outstanding at March 31,
2000 was $571,269. The securities related to the Covington Capital debenture and
the MLTV note payable are subordinated to the bank debt.
During March 1998, the Company reached an understanding with MLTV that interest
would not accrue on the $630,000 principal amount of debt due by the Company and
that such balance would only become due upon the sale of the company or at such
time as MLTV were to dispose of its interest in the Company.
13
<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 Venture
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. Payments of principal commenced
on November 30, 1996 in the amount of $6,250 Canadian dollars ($4,300 US) per
month for a period of forty-eight (48) months with the balance due at the end of
the term. 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. The
outstanding balance as of March 31, 2000 was $1,243,750 Canadian dollars
($854,581 US). The entire balance of this facility is due in October 2000.
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, refer
to Note I to the Financial Statements in Form 10-KSB for June 30, 1999). 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 it sales and marketing coverage.
If the Company has to repay some of the short term maturing debt, it will lose a
substantial portion of its financial resources to pursue its current 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 cannot be certain that it will be
successful in efforts to raise additional funds.
YEAR 2000 ISSUE
The Company did not experience any negative problems or results with respect to
the Year 2000 issue. However, the Company will continue to monitor for any
potential impacts on operations that may currently be unforeseen. The Company
believes that the cost of Year 2000 modifications for both internal use software
and systems or the Company's products were not material. (The Company estimates
the accumulated expenditures relating to Year 2000 issues have not exceeded
$100,000).
13
<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.
- -------------------------------------------------------------
Not Applicable
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
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Issuer
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
PHOTON TECHNOLOGY INTERNATIONAL, INC.
Date: May 12, 2000 By: /s/ Charles G. Marianik
------------------------
Charles G. Marianik
President, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: May 12, 2000 By: /s/ William J. Hiltner, III
---------------------------
William J. Hiltner, III
Corporate Controller
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 149,484
<SECURITIES> 0
<RECEIVABLES> 1,066,769
<ALLOWANCES> (4,962)
<INVENTORY> 1,549,740
<CURRENT-ASSETS> 2,992,810
<PP&E> 2,454,849
<DEPRECIATION> 2,007,748
<TOTAL-ASSETS> 5,414,864
<CURRENT-LIABILITIES> 2,163,417
<BONDS> 0
1,958,147
0
<COMMON> 6,310,870
<OTHER-SE> (5,675,366)
<TOTAL-LIABILITY-AND-EQUITY> 5,414,864
<SALES> 5,558,444
<TOTAL-REVENUES> 5,798,362
<CGS> 2,666,801
<TOTAL-COSTS> 2,666,801
<OTHER-EXPENSES> 2,939,998
<LOSS-PROVISION> 23,294
<INTEREST-EXPENSE> 160,071
<INCOME-PRETAX> 31,492
<INCOME-TAX> 0
<INCOME-CONTINUING> 31,492
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,492
<EPS-BASIC> 0.03
<EPS-DILUTED> 0
</TABLE>
