Form 10-QSB
CONFORMED
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 September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission File Number 0-15545
Logitek, Incorporated
(Exact name of registrant as specified in its charter)
New York No. 11-2203507
State or other jurisdiction of (I.R.S Employer
incorporation or organization Identification No.)
101 Christopher St., Ronkonkoma, N.Y. 11779
(Address of principal executive offices and ZIP Code)
Registrant's Telephone Number, including area code 516-467-4200
Securitie s registered pursuant to Section 12(g) of the Act:
Common Stock, $.001, par value
Title of Class Name of each exchange on which registered
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 past
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
As of November 1, 1996, their were 3,424,000 shares of common stock
outstanding.
<PAGE>
LOGITEK, INC.
Quarterly Report on Form 10-QSB
INDEX
Page #
Part 1:FINANCIAL INFORMATION
Item 1.Financial Statements
Balance Sheets as of September 30, 1996 and June 30, 1996 3
Statements of Operations and Retained Earnings for the
Three Months Ended September 30, 1996 and 1995 4
Statements of Cash Flows for the Three Months
Ended September 30, 1996 and 1995 5
Notes to Financial Statements 6
Item 2.Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
Part II:OTHER INFORMATION
Item 6.Exhibits and Reports on Form 8-K 9
Signatures 10
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LOGITEK, INC
BALANCE SHEETS
ASSETS September 30,1996 June 30,1996
Current Assets: (unaudited)
Cash $113,513 $348,979
Accounts receivable, 375,237 328,801
Inventories 1,108,074 1,018,074
Prepaid expenses and other 59,511 33,941
Due from officer 30,500 30,500
Total Current Assets 1,686,835 1,760,295
Property and equipment, less
accumulated depreciation 705,277 720,929
Other Assets:
Deferred Income Taxes, State 7,000 7,000
Goodwill 34,441 34,441
Other 35,145 33,111
Total Assets $2,468,698 $2,555,776
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Current portion of long-term debt $146,377 $147,641
Accounts payable 526,204 463,889
Accrued expenses 49,628 166,561
Total current liabilities 722,209 778,091
Long-term debt, less current maturities 545,912 581,323
Deferred income taxes 16,556 13,380
Total Liabilities 1,284,677 1,372,794
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; authorized
10,000,000 shares; issued 3,600,000 shares 36,000 36,000
Capital in excess of par value 280,355 280,355
Retained earnings 873,166 872,127
Sub-total 1,189,521 1,188,482
Less:
Treasury shares, at cost, 176,000 shares (5,500) (5,500)
Total stockholders' equity 1,184,021 1,182,982
Total liabilities and stockholders' equity$2,468,698 $2,555,776
See notes to the financial statements.<PAGE>
LOGITEK, INC
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
For the Three Months Ended September 30, 1996 and 1995
(Unaudited)
Three Months Ended
September 30,
1996 1995
Net sales $708,113 $701,760
Cost of goods sold 469,135 429,122
Gross profit 238,978 272,638
Operating expenses:
Selling 65,691 49,010
General and
administrative 104,705 122,006
Research and development 47,340 21,391
Total operating expenses 217,736 192,407
Income (loss) from operations 21,242 80,231
Interest expense, net 19,943 21,344
Income (loss) before
provision for income taxes 1,299 58,887
Provision for income taxes 260 8,833
Net income (loss) 1,039 50,054
Retained earnings, beginning of period 872,127 612,152
Retained earnings, end of period $873,166 $662,206
Per share amounts
Net income (loss) $.00 $.02
Weighted average shares
outstanding 3,424,000 3,424,000
See Notes to financial statements<PAGE>
LOGITEK INC.
STATEMENTS OF CASH FLOWS
For the Three Months ended September 30, 1996 and 1995
(Unaudited)
Three Months Ended
September 30,
1996 1995
Net income (loss) $1,039 $50,054
Adjustments to reconcile net
income (loss) to cash provided
by operations:
Depreciation 27,525 25,725
Accounts receivable (46,436) (145,588)
Inventories (90,000) (26,500)
Prepaid expenses and other (25,570) 9,306
Due from officer - -
Other assets (2,034) (177)
Accounts payable 62,315 110,502
Accrued expenses (113,757) (59,671)
Total adjustments (187,957) (86,403)
Net cash provided by (used in) operating
activities (186,918) (36,349)
Cash flows from financing activities:
Long-term debt (36,675) (27,454)
Purchase of Property, Plant and Equipment (11,873) (20,006)
Net cash (used in) financing activities (48,548) (47,460)
Net increase (decrease) in cash (235,466) (83,809)
Cash, beginning of period 348,979 139,751
Cash, end of period $113,513 $55,942
Supplemental disclosures:
Cash paid for:
Interest 19,943 21,344
See notes to financial statements <PAGE>
LOGITEK, INC.
Notes to Financial Statements
Note 1 - Basis of Presentation
The financial statements included herein have been prepared by the Company,
without audit,pursuant to the rules and regulations of the Securities and
Exchange Commission and reflect all adjustments which are, in the opinion of
management, necessary to present fairly the information required therein.
Certain information and footnote disclosures normally included in the
financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and
regulations, although management believes that the disclosures are adequate
to make the information presented not misleading. It is suggested that
these financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-KSB filed
with the Securities and Exchange Commission for the year ended June 30, 1996.
The results of operations for the three months ended September 30, 1996 are
not necessarily indicative of the results of operations to be expected for
the full year.
NOTE 2 - Inventories
Inventories consisted of the following:
September 30, June 30,
1996 1996
Raw materials $569,414 $479,414
Work-in-process 282,155 282,155
Finished goods 256,505 256,505
Total $1,108,074 $1,018,074
For the three months ended September 30, 1996 the Company used the gross
profit method to calculate ending inventory values.
Note 3 - Provision for Income Taxes
The provision for income taxes differs from the amounts computed by applying
the federal income tax rate to the income before income taxes due to the
following:
September 30,
1996 1995
Statutory rate 34.0 34.0
State income taxes, net of federal
tax benefit 2.0 2.0
Utilization of tax credit
carryforward (16.0) (21.0)
Effective tax rate 20.0 15.0
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following table presents selected financial information for the periods
September 30, 1996 and 1995.
Three Months Ended
September 30,
1996 1995
Net sales $708,113 $701,760
Gross profit $238,978 $272,638
Gross margin 33.7% 38.9%
Net income (loss) $1,039 $50,054
Net income (loss), per share $0.00 $0.02
General
Logitek, Inc. (the "Company") reported net income of $1,039 for the three
months ended September 30, 1996 versus $50,054 for the prior year period.
The Company's sales backlog is aproximately $2,200,000 at September 30, 1996
versus $2,000,000 at September 30, 1995.This reflects a trend that is
expected to continue during the second quarter of fiscal 1997 based upon the
increased level of sales activity.
Results of Operations
Net sales for the three months ended September 30, 1996 were $708,113
compared to $701,760 or an increase of $6,353, or 1%, from the prior year
period. As a result of the increase in sales backlog the company expects
this trend to continue in the coming quarters of fiscal 1997. <PAGE>
Gross profit decreased to 33.7% in the quarter ended September 30, 1996
compared to 38.9% for the prior year quarter. This decrease in gross profit
is a result of the company increasing certain costs in preparation for
handling the increased sales backlog.
Operating expenses for the three months ended September 30, 1996 increased
$25,329, or 13%.This occurred as a result of additional overhead incurred as
the company plans for greater sales volume based on increased bookings and
increased sales activity. The expected increased sales volume is typically
not realized during this quarter due to vacation and holiday shutdown.The
company expects ,however , that sales volume will increase in the second
quarter to the planned level.
Liquidity
As of September 30 and June 30, 1996 the Company had cash on hand of $113,513
and $348,979, respectively; and, as of September 30, 1996, the Company's
current ratio was 2.30 compared to 2.30 at June 30, 1996. Total borrowings
were $692,289 at September 30, 1996 and $728,964 at June 30, 1996, for a
decrease of $36,675 while accounts payable and accrued expenses decreased
$54,618.
The Company does not anticipate any new borrowings, however, if the need
arises to purchase equipment in its continuing effort to modernize its
manufacturing capability it is the Company's intention to lease such
equipment on more favorable terms than an outright purchase.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - None
<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 thereunto duly authorized.
LOGITEK, INC.
Registrant
Date: 11/ 13 / 96 By: /s/ Herbert L. Fischer
Herbert L. Fischer
President and
Chief Executive Officer
Date: 11/ 13 / 96 By: /s/ Herbert L. Fischer
Herbert L.Fischer
Chief Financial Officer
<PAGE>
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<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
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<SECURITIES> 000,000
<RECEIVABLES> 375,237
<ALLOWANCES> 000,000
<INVENTORY> 1,108,074
<CURRENT-ASSETS> 1,686,835
<PP&E> 705,277
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<TOTAL-ASSETS> 2,468,698
<CURRENT-LIABILITIES> 722,209
<BONDS> 000,000
000,000
000,000
<COMMON> 36,000
<OTHER-SE> 000,000
<TOTAL-LIABILITY-AND-EQUITY> 2,468,698
<SALES> 708,113
<TOTAL-REVENUES> 708,113
<CGS> 469,135
<TOTAL-COSTS> 217,736
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<LOSS-PROVISION> 000,000
<INTEREST-EXPENSE> 19,943
<INCOME-PRETAX> 1,299
<INCOME-TAX> 260
<INCOME-CONTINUING> 1,039
<DISCONTINUED> 000,000
<EXTRAORDINARY> 000,000
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