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, 1997
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
Securities 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 3, 1997, their were 3,412,059 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, 1997
and June 30, 1997 3
Statements of Operations and Retained Earnings
for the Three Months Ended September 30,
1997 and 1996 4
Statements of Cash Flows for the Three Months
Ended September 30, 1997 and 1996 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 30,1997 June 30,1997
Current Assets: (unaudited)
Cash $444,509 $393,797
Accounts receivable, 374,059 422,549
Inventories 1,000,792 1,046,082
Prepaid expenses and other 5,430 34,292
Due from officer 30,500 30,500
Total Current Assets 1,855,290 1,927,220
Property and equipment, less
accumulated depreciation 645,611 668,861
Other Assets:
Goodwill 34,441 34,441
Other 36,551 36,323
Total Assets $2,571,893 $2,666,845
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Current portion of long-term debt $142,760 $145,182
Capitalized lease obligation,current 12,079 11,783
Accounts payable 315,891 385,882
Accrued expenses 99,115 154,507
Total current liabilities 569,845 697,354
Capitalized Lease Obligation,
Less Current Portion 46,725 50,119
Long-term debt, less current maturities 364,109 398,596
Deferred income taxes 25,380 15,380
Total Liabilities 1,006,059 1,161,449
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 1,257,131 1,196,693
Sub-total 1,573,486 1,513,048
Less:Treasury shares, at cost,
187,941 shares (7,652) (7,652)
Total stockholders' equity 1,565,834 1,505,396
Total liabilities and stockholders' equity $2,571,893 $2,666,845
See notes to the financial statements.<PAGE>
LOGITEK, INC
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
For the Three Months Ended September 30, 1997 and 1996
(Unaudited)
Three Months Ended
September 30,
1997 1996
Net sales $1,100,862 $708,113
Cost of goods sold 652,133 469,135
Gross profit 448,729 238,978
Operating expenses:
Selling 91,916 65,691
General and
administrative 198,356 104,705
Research and development 37,699 47,340
Total operating expenses 327,971 217,736
Income (loss) from operations 120,758 21,242
Interest expense, net 16,320 19,943
Income (loss) before
provision for income taxes 104,438 1,299
Provision for income taxes 44,000 260
Net income (loss) 60,438 1,039
Retained earnings,beginning of period 1,196,693 872,127
Retained earnings, end of period $1,257,131 $873,166
Per share amounts
Net income (loss) $.02 $.00
Weighted average shares
outstanding 3,412,059 3,424,000
See Notes to financial statements<PAGE>
LOGITEK INC.
STATEMENTS OF CASH FLOWS
For the Three Months ended September 30, 1997 and 1996
(Unaudited)
Three Months Ended
September 30,
1997 1996
Net income (loss) $60,438 $1,039
Adjustments to reconcile net
income (loss) to cash provided
by operations:
Depreciation 23,250 27,525
Accounts receivable 48,490 (46,436)
Inventories 45,290 (90,000)
Prepaid expenses and other 28,862 (25,570)
Other assets (228) (2,034)
Accounts payable (69,991) 62,315
Accrued expenses (55,392) (113,757)
Deferred Taxes 10,000 0
Total adjustments 30,281 (187,957)
Net cash provided by (used in) operating
activities 90,719 (186,918)
Cash flows from financing activities:
Long-term debt (40,007) (36,675)
Purchase of Property, Plant and Equipment 0 (11,873)
Net cash (used in) financing activities (40,007) (48,548)
Net increase (decrease) in cash 50,712 (235,466)
Cash, beginning of period 393,797 348,979
Cash, end of period $444,509 $113,513
Supplemental disclosures:
Cash paid for:
Interest 16,320 19,943
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, 1997.
The results of operations for the three months ended September 30, 1997 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,
1997 1997
Raw materials $510,404 $505,280
Work-in-process 250,198 326,954
Finished goods 240,190 213,848
Total $1,000,792 $1,046,082
For the three months ended September 30, 1997 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 federalincome tax rate to the income before income taxes due to the
following:
September 30,
%
1997 1996
Statutory rate 34.0 34.0
State income taxes, net of federal tax benefit 2.0 2.0
Utilization of tax credit (6.0) (16.0)
Other 12.0 0.0
Effective tax rate 42.0 20.0
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, 1997 and 1996.
Three Months Ended
September 30,
1997 1996
Net sales $1,100,862 $708,113
Gross profit $448,729 $238,978
Gross margin 40.8% 33.7%
Net income (loss) $60,438 $1,039
Net income (loss), per share $0.02 $0.00
General
Logitek, Inc. (the "Company") reported net income of $60,438 for the three
months ended September 30, 1997 versus $1,039 for the prior year period.
The Company's sales backlog is aproximately $2,500,000 at September 30, 1997
versus$2,200,000 at September 30, 1996. This reflects a $300,000 increase,
which the Company is hopeful will continue to grow.
Results of Operations
Net sales for the three months ended September 30,1997 were $1,100,862
compared to $708,113 or an increase of $392,749, or 55%, from the prior year
period, however this comparative increase will likely not be as large in
future quarters as the 55% increase achieved in this first quarter.,
<PAGE>
Gross profit increases to 40.8% in the quarter ended September 30, 1997
compared to 33.7% for the prior year quarter. This increase in gross profit
is a result of the increased sales with only minimal additional
manufacturing overhead.
Operating expenses for the three months ended September 30, 1997 increased
$110,235 or 50% This occurred as a result of additional general &
administrative overhead incurred as the company plans for greater sales
volume based on increased bookings and increased sales activity.
Liquidity
As of September 30 and June 30, 1997 the Company had cash on hand of
$444,509 and $393,797, respectively; and, as of September 30, 1997 the
Company's current ratio was 3.3 compared to 2.76 at June 30, 1997 Total
borrowings were $565,673 at September 30, 1997 and $605,680 at June 30, 1997
for a decrease of $40,007 while accounts payable and accrued expenses
decreased $125,383.
The Company does not anticipate any new borrowings, however, if the need
arises to purchase equipment in its continuing effort to increase 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/ 10/ 97 By: /s/ Herbert L. Fischer
Herbert L. Fischer
President and
Chief Executive Officer
Date: 11/ 10/ 97 By: /s/ Herbert L. Fischer
Herbert L.Fischer
Chief Financial Officer
<PAGE>
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