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 March 31, 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
Securitie s registered pursuant to Section 12(g) of the Act:
Common Stock, $.001, par value None
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 February 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 March 31, 1997 and June 30, 1996 3
Statements of Operations and Retained Earnings for the Nine
and Three Months Ended March 31, 1997 and 1996 4
Statements of Cash Flows for the Nine and Three Months
Ended March 31, 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 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits 9
b) Reports on Form 8-K 9
Signatures 10
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LOGITEK, INC
BALANCE SHEETS
March 31, June 30,
ASSETS 1997 1996
Current Assets:
Cash 258,240 348,979
Accounts Receivable 460,170 328,801
Inventories (Note 2) 1,108,964 1,018,074
Prepaid Expenses and other 2,386 33,941
Due from Officer 30,500 30,500
Total Current Assets 1,860,260 1,760,295
Property and equipment, less
accumulated depreciation 675,227 720,929
Other Assets
Deferred Income Taxes 7,000 7,000
Goodwill 34,441 34,441
Other 35,292 33,111
Total Assets 2,612,220 2,555,776
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Capitalized portion of long term debt 155,759 140,491
Capitalized lease obligation 7,150 7,150
Accounts payable 393,607 463,889
Accrued expenses 136,980 166,561
Total current liabilities 693,496 778,091
Capitalized lease obligation,
less current portion 59,107 39,402
Long term debt, less current maturities 422,001 541,921
Deferred income taxes 13,380 13,380
Total Liabilities 1,187,984 1,372,794
STOCKHOLDER'S 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 1,113,381 872,127
Sub-total 1,429,736 1,188,482
Less:
Treasury shares, at cost, 176,000 shares (5,500) (5,500)
Total stockholders' equity 1,424,236 1,182,982
Total liabilities and stockholders' equity $2,612,220 $2,555,776
See notes to the financial statements.<PAGE>
LOGITEK, INC
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
For the Three and Nine Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
1997 1996 1997 1996
Net sales $1,181,406 $862,735 $2,974,449 $2,534,572
Cost of goods sold 676,210 502,683 1,787,002 1,496,786
Gross profit 505,196 360,052 1,187,447 1,037,786
Operating expenses:
Selling 74,884 82,579 214,860 202,910
General and
administrative 249,362 177,477 502,258 487,089
Research and development 61,953 53,780 157,639 108,026
Total operating expenses 386,199 313,836 874,757 798,025
Income (loss) from operations 118,997 46,216 312,690 239,761
Other (income) expense:
Interest expense, net 19,991 20,770 61,436 63,041
Legal settlement (Note 4) (50,000) 0 (50,000 0
Total other (income) expense (30,009) 20,770 11,436 63,041
Income (loss) before
provision for income taxes 149,006 25,446 301,254 176,720
Provision for income taxes (Note 3)
29,550 4,000 60,000 26,600
Net income (loss) 119,456 21,446 241,254 150,120
Retained earnings,
beginning of period 740,826 568,165 612,152 517,919
Retained earnings,
end of period 1,113,381 762,272 1,113,381 762,272
Per share amounts
Net income (loss) $0.03 $0.01 $0.07 $0.04
Weighted average shares
outstanding 3,424,000 3,424,000 3,424,000 3,424,000
See notes to financial statements.<PAGE>
LOGITEK, INC.
STATEMENTS OF CASH FLOWS
For the Nine and Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31
1997 1996 1997 1996
Net income (loss) $119,456 $21,446 $241,254 $150,120
Adjustments to reconcile net
income (loss) to cash provided
(used) by operations:
Depreciation 34,075 24,250 82,575 72,750
Accounts receivable 65,548 298,294 (131,369) 53,641
Inventories 4,500 (88,500) (90,890)(208,500)
Prepaid expenses and other 13,193 (2,732) 31,554 (16,896)
Other assets (1,775) 422 (2,181) 58
Accounts payable (92,502) (16,039) (70,282) 191,269
Accrued expenses 54,486 55,095 (29,581) 87,027
Due from officer 0 0 (27,000) 800
Deferred taxes (4,086) (5,149) 0 17,451
Total adjustments 73,439 265,641 (210,174) 169,800
Net cash provided (used) by
operating activities 192,885 287,087 31,080 319,920
Cash flows from investing activities:
Acquisition of equipment (31,550) (15,060) (36,873) (81,926)
Net cash provided by
investing activities (31,550) (15,060) (36,873) (81,926)
Cash flows from financing activities:
Repayment of long-term debt (34,911) (31,778) (104,652) (40,911)
Capitalized lease obligation 21,964 0 19,706 0
Net cash (used) by financing activities(12,937) (31,778) (84,946) (40,911)
Net increase (decrease) in cash 148,398 240,249 (90,739) 197,083
Cash, beginning of period 109,842 96,585 348,979 139,751
Cash, end of period $258,240 $336,834 $258,240 $336,834
Supplemental disclosures:
Cash paid for:
Interest $19,911 $18,971 $61,436 $69,237
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 and nine months ended March 31, 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:
March 31, June 30,
1997 1996
Raw materials $522,132 $479,414
Work-in-process 307,604 282,155
Finished goods 279,228 256,505
Total $1,108,964 $1,018,074
For the three and nine months ended March 31,1997 the Company used the
gross profit method to calculate ending inventory values.
Note 3 - Provision for Income Taxes
Income taxes were different from the amounts computed by applying the
federal income tax rate to the income before taxes due to the following:
Three Months Ended Nine Months Ended
3/31/97 3/31/96 3/31/97 3/31/96
Statutory rate 34% 34% 34% 34%
State income taxes, net of
federal tax benefit 2 2 2 2
General business credit (16) (21) (16) (21)
Effective tax rate 20% 15 % 20% 15 %
Note 4-Legal Settlement
The Company has made a settlement on a trademark infringement suit. The
settlement was for $105,000, of which $55,000 was received in the quarter
ended June 30,1996 and the remaining $50,000 was received in the quarter
ended March 31,1997.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following table presents selected financial information for the periods
March 31, 1997 and 1996, respectively.
Three Months Ended Nine Months Ended
March 31, March 31,
1997 1996 1997 1996
Net sales $1,181,406 $862,735 $2,974,449 $2,534,572
Gross profit $505,196 $360,052 $1,187,447 $1,037,786
Gross margin 42.8% 41.7% 39.9% 40.9%
Operating expenses 386,199 $313,836 $874,757 $798,025
Legal settlement income 50,000 - 50,000 -
Net income (loss) $119,456 $21,446 $241,254 $150,120
General
Logitek, Inc. (the "Company") reported a profit of $241,254 for the nine
months ended March 31, 1997 versus a profit of $150,120 for the prior year
period. For the quarter ended March 31, 1997 the Company reported a profit
of $119,456 compared to a profit of $21,446 for the prior year quarter.
Results of Operations
Net sales for the first nine months of fiscal 1997 were $2,974,449 compared
to $2,534,572 or an increase of $439,877. Net sales for the quarter ended
March 31, 1997 were $1,181,406 compared to $862,735 or an increase of
$318,671.
Gross profit decreased to 39.9% in the current nine month period compared
to 40.9% for the prior year.
Operating expenses for the nine months ended March 31, 1997 increased $76,732.
Liquidity
As of March 31, 1997 and June 30, 1996 the Company had cash on hand of
$258,240 and $348,979, respectively; and, as of March 31, 1997 the Company's
current ratio was 2.68 compared to 2.26 as of June 30, 1996. Total
borrowings were $644,017 at March 31, 1997,and $ 728,964 at June 30, 1996 .
This represents a decrease of $84,947.
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 rather than purchase in order to conserve as much cash as possible.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Exhibits and Reports on Form 8-K
a) Exhibits- There are no exhibits being filed with this report
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: 5/13/97 By:
Herbert L. Fischer
President and
Chief Executive Officer
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