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 December 31, 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
Securities 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)ofthe 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 December 31, 1996 and June 30, 1996 3
Statements of Operations and Retained Earnings for the Six
and Three Months Ended December 31, 1996 and 1995 4
Statements of Cash Flows for the Six and Three Months
Ended December 31, 1996 and 1995 5
Notes to Financial Statements 6
Item 2.Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
Part II: OTHER INFORMATION
Item 4.Submission of Matters to a Vote of Security Holders 9
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
ASSETS December 31,1996 June 30,1996
Current Assets: (unaudited)
Cash $109,842 $348,979
Accounts Receivable 525,718 328,801
Inventories (Note 2) 1,113,464 1,018,074
Prepaid expenses and other 15,579 33,941
Due from officer 30,500 30,500
Total Current Assets 1,795,103 1,760,295
Property and equipment, less
accumulated depreciation 677,752 720,929
Other Assets:
Deferred income taxes, state 7,000 7,000
Goodwill 34,441 34,441
Other 33,517 33,111
Total Assets $2,547,813 $2,555,776
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Current portion of
long-term debt (Notes 3 & 4) $149,017 $140,491
Capitalized lease obligation,
current 7,150 7,150
Accounts payable 486,109 463,889
Accrued expenses 82,504 166,561
Total current liabilities 724,780 778,091
Capitalized lease obligation,
less current portion 37,133 39,402
Long-term debt,
less current maturities (Notes 3 & 4) 463,654 541,921
Deferred income taxes 17,466 13,380
Total Liabilities 1,243,033 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 993,925 872,127
Sub-total 1,310,280 1,188,482
Less:Treasury shares,
at cost, 176,000 shares (5,500) (5,500)
Total stockholders' equity 1,304,780 1,182,982
Total liabilities and
stockholders' equity $2,547,813 $2,555,776
See notes to the financial statements.<PAGE>
LOGITEK, INC
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
For the Three and Six Months Ended December 31, 1996 and 1995
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1996 1995 1996 1995
Net sales $1,084,930 $970,077 $1,793,043 $1,671,837
Cost of goods sold 641,657 564,981 1,110,792 994,103
Gross profit 443,273 405,096 682,251 677,734
Operating expenses:
Selling 74,285 71,321 139,976 120,331
General and
administrative (Note 4) 148,191 187,606 252,896 309,612
Research and development 48,346 32,855 95,686 54,246
Total operating expenses 270,822 291,782 488,558 484,189
Income (loss) from operations 172,451 113,314 193,693 193,545
Other (income) expense:
Interest expense, net 21,502 20,927 41,445 42,271
Total other (income) expense 21,502 20,927 41,445 42,271
Income (loss) before
provision for income taxes 150,949 92,387 152,248 151,274
Provision for income taxes 30,190 13,767 30,450 22,600
Net Income (Loss) 120,759 78,620 121,798 128,674
Retained earnings ,
beginning of period 873,166 662,206 872,127 612,152
Retained earnings,
end of period $993,925 $740,826 $993,925 $740,826
Per share amounts
Net Income (loss) $0.04 $0.02 $0.04 $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 Three and Six Months Ended December 31,1996 and 1995
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1996 1995 1996 1995
Net income (loss) $120,759 $78,620 $121,798 $128,674
Adjustments to
reconcile net income
(loss) to cash provided
(used) by operations:
Depreciation 24,250 25,725 48,500 51,450
Accounts Receivable (150,481) (99,065) (196,917) (244,653)
Inventories (5,390) (93,500) (95,390) (120,000)
Prepaid expenses and other 43,932 (23,470) 18,362 (14,164)
Other assets 1,628 (187) (406) (364)
Accounts Payable (40,095) 96,806 22,220 207,308
Accrued Expenses 46,576 91,603 (84,057) 31,932
Due from officer 0 (27,000) 0 (27,000)
Deferred taxes 910 22,600 4,086 22,600
Total adjustments (78,670) (6,488) (283,602) (92,891)
Net cash provided(used) by
operating activities 42,089 72,132 (161,804) 35,783
Cash flows from
investing activities:
purchase of equipment (3,275) (49,803) (5,323) (69,809)
Net cash provided by
investing activities (3,275) (49,803) (5,323) (69,809)
Cash flows from financing
activities:
Repayment of long term debt (41,350) 18,314 (69,741) (9,140)
Capitalized lease obligation (1,135) 0 (2,269) 0
Net cash (used) by
financing activities (42,485) 18,314 (72,010) (9,140)
Net increase
(decrease) in cash (3,671 40,643 (239,137) (43,166)
Cash, beginning of period 113,513 55,942 348,979 139,751
Cash , end of period 109,842 55,942 109,842 96,585
Supplemental disclosures:
Cash paid for :
Interest $26,253 $20,927 $50,267 $42,271
See notes to financial statements
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
LOGITEK, INC.
Notes to Financial Statements
Note 1 - Basis of Presentation
The financial statements included herein have been prepared by the Company,
withoutaudit, 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 six months ended December 31,
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:
December 31, June 30,
1996 1996
Raw materials $524,333 $479,414
Work-in-process 308,592 282,155
Finished goods 280,539 256,505
Total $1,113,464 $1,018,074
For the three and six months ended December 31, 1996 the Company used the
gross profit method to calculate ending inventory values.
Note 5 - 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 Six Months Ended
12/31/96 12/31/95 12/31/96 12/31/95
Statutory rate 34% 34% 34% 34%
State income taxes,
net of federal
tax benefit 4 2 4 4
General Business Credit (18) (11) (18) (13)
Reversal of prior year
deferred tax provisions (10) (10)
Effective tax rate 20% 15% 20% 15%
CONDITION AND RESULTS OF OPERATIONS
The following table presents selected financial information for the periods
December 31,1996 and 1995, respectively.
Three Months Ended Six Months Ended
December 31, December 31,
1996 1995 1996 1995
Net sales $1,084,930 $970,077 $1,793,043 $1,671,837
Gross profit $443,273 $405,096 $682,251 $677,734
Gross margin 40.8% 41.7% 38.0% 40.5%
Operating expenses $270,822 $291,782 $488,558 $484,189
Net income (loss) $120,759 $78,620 $121,798 $128,674
General
Logitek, Inc. (the "Company") reported a profit of $121,798 for the six
months ended December 31, 1996 versus a profit of $128,674 for the prior
year period. For the quarter ended December 31, 1996 the Company reported a
profit of $120,759 compared to a profit of $78,620 for the prior year quarter.
Results of Operations
Net sales for the first six months of fiscal 1996 were $1,793,043 compared
to $1,671,837, or an increase of $121,206. Net sales for the quarter ended
December 31, 1996 were $1,084,930 compared to $970,077 or an increase of
$114,853.
Gross profit decreased to 38.0% in the current six month period compared
to 40.5% for the prior year..
Operating expenses for the six months ended December 31, 1996 decreased
$20,910.
Liquidity
As of December 31, 1996 and June 30, 1996 the Company had cash on hand of
$109,842 and $348,979, respectively; and, as of December 31, 1996 the
Company's current ratio was 2.48 compared to 2.26 as of June 30, 1996.
Total borrowings were $656,954 at December 31, 1996, $728,964 at June 30,
1996 and $749,379 at December 31, 1995. This represents decreases of
$74,010 and $92,425 for the six and twelve month periods ended December 31,
1996. For the twelve month period ended June 30, 1996 the Company reduced
total debt by $29,555.
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. Submission of Matters to a Vote of Security Holders
At the Company's regularly scheduled Annual Meeting held on November 22,
1996 the following votes were recorded:
1.To elect a partial board of two directors, each to serve for a term of
one year or until his successor shall have been duly elected and
qualified:
Votes Cast
For Against Abstained
Herbert L. Fischer 2,032,376 20,000 5,000
Howard Fein 2,032,376 20,000 5,000
Francis Vuccii 2,032,376 20,000 5,000
.
2.To elect Marcum & Kliegman, Certified Public Accountants as the
Company's independent certified accountants:
Votes Cast
For Against Abstained
2,032,076 20,000 0
Item 6. 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: 2/ 14 / 97 By: /s/ Herbert L. Fischer
Herbert L. Fischer
President and
Chief Executive Officer
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<PERIOD-END> DEC-31-1996
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<SECURITIES> 0
<RECEIVABLES> 525,718
<ALLOWANCES> 0
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<PP&E> 677,752
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<CURRENT-LIABILITIES> 724,780
<BONDS> 0
0
0
<COMMON> 36,000
<OTHER-SE> 0
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<TOTAL-COSTS> 1,110,792
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<INCOME-TAX> 30,450
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<DISCONTINUED> 0
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<NET-INCOME> 121,798
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