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, 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 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 November 1, 1997, their were 3,412,059 shares of common stock
outstanding.
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LOGITEK, INC.
Quarterly Report on Form 10-QSB
INDEX
Page #
Part 1:FINANCIAL INFORMATION
Item 1.Financial Statements
Balance Sheets as of December 31, 1997 and June 30, 1997 3
Statements of Operations and Retained Earnings for the Six
and Three Months Ended December 31, 1997 and 1996 4
Statements of Cash Flows for the Six and Three Months
Ended December 31, 1997 and 1996 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, June 30,
1997 1997
Current Assets: (unaudited)
Cash $261,944 $393,797
Accounts Receivable 711,943 422,549
Inventories (Note 2) 1,056,293 1,046,082
Prepaid expenses and other 32,833 34,292
Due from officer 30,500 30,500
Total Current Assets 2,093,513 1,927,220
Property and equipment, less
accumulated depreciation 622,361 668,861
Other Assets:
Goodwill 34,441 34,441
Other 35,415 36,323
Total Assets $2,785,730 $2,666,845
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Current portion of long-term debt $135,229 $145,182
Capitalized lease obligation, current 12,693 11,783
Accounts payable 357,857 385,882
Accrued expenses 179,303 154,507
Total current liabilities 685,082 697,354
Capitalized lease obligation,
less current portion 38,672 50,119
Long-term debt, less current maturities 336,941 398,596
Deferred income taxes 55,380 15,380
Total Liabilities 1,116,075 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 1,360,952 1,196,693
Sub-total 1,677,307 1,513,048
Less:
Treasury shares, at cost, 187,941 shares (7,652) (7,652)
Total stockholders' equity 1,669,655 1,505,396
Total liabilities and stockholders'equity $2,785,730 $2,666,845
See notes to the financial statements.
<PAGE>
LOGITEK, INC
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
For the Three and Six Months Ended December 31, 1997 and 1996
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1997 1996 1997 1996
Net sales $1,209,400 $1,084,930 $2,310,262 $1,793,043
Cost of goods sold 757,353 641,657 1,409,486 1,110,792
Gross profit 452,047 443,273 900,776 682,251
Operating expenses:
Selling 72,997 74,285 164,913 139,976
General and
administrative 152,763 148,191 351,119 252,896
Research and development 40,221 48,346 77,920 95,686
Total operating expenses 265,981 270,822 593,952 488,558
Income (loss) from operations 186,066 172,451 306,824 193,693
Other (income) expense:
Interest expense,net 12,245 21,502 28,565 41,445
Total other (income) expense 12,245 21,502 28,565 41,445
Income (loss) before
provision for income taxes 173,821 150,949 278,259 152,248
Provision for income taxes 70,000 30,190 114,000 30,450
Net Income (Loss) 103,821 120,759 164,259 121,798
Retained earnings ,
beginning of period 1,257,131 873,166 1,196,693 872,127
Retained earnings,
end of period $1,360,952 $993,925 $1,360,952 $993,925
Per share amounts
Net Income (loss) $0.03 $0.04 $0.05 $0.04
Weighted average shares
outstanding 3,412,059 3,424,000 3,412,059 3,424,000
See notes to financial statements.
<PAGE>
LOGITEK INC.
STATEMENTS OF CASH FLOWS
For the Three and Six Months Ended December 31,1997 and 1996
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1997 1996 1997 1996
Net income (loss) $103,821 $120,759 $164,259 $121,798
Adjustments to reconcile net
income (loss) to cash provided
(used) by operations:
Depreciation 23,250 24,250 46,500 48,500
Accounts Receivable (337,884) (150,481) (289,394) (196,917)
Inventories (55,501) (5,390) (10,211) (95,390)
Prepaid expenses and other (27,409) 43,932 1,459 18,362
Other assets 1,136 1,628 908 (406)
Accounts Payable 41,966 (40,095) (28,025) 22,220
Accrued Expenses 80,194 46,576 24,983 (84,057)
Deferred taxes 30,000 910 40,000 4,086
Total adjustments (244,248) (78,670) (213,780) (283,602)
Net cash provided(used) by
operating activities (140,427) 42,089 (49,521) (161,804)
Cash flows from investing activities:
Purchase of Equipment 0 (3,275) 0 (5,323)
Net Cash provided by investing
activities 0 (3,275) 0 (5,323)
Cash flows from financing activities:
Repayment of long term debt (34,699) (41,350) (71,795) (69,741)
Capitalized lease obligation (7,439) (1,135) (10,537) (2,269)
Net cash (used) by
financing activities (42,138) (42,485) (82,332) (72,010)
Net increase (decrease) in cash (182,565) (3,671) (131,853) (239,137)
Cash, beginning of period 444,509 113,513 393,797 348,979
Cash , end of period 261,944 109,842 261,944 109,842
Supplemental disclosures:
Cash paid for :
Interest $18,546 $26,253 $35,510 $50,267
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,
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 and six months ended December 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:
December 31, June 30,
1997 1997
Raw materials $515,492 $505,280
Work-in-process 326,954 326,954
Finished goods 213,847 213,848
Total $1,056,293 $1,046,082
For the three months ended December 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 Six Months Ended
12/31/97 12/31/96 12/31/97 12/31/96
Statutory rate 34% 34% 34% 34%
State income taxes, net of
federal tax benefit 4 4 4 4
General Business Credit (6) (18) (6) (18)
Deferred Tax Provision 8 8
Effective Tax Rate 40% 20% 40% 20%
CONDITION AND RESULTS OF OPERATIONS
The following table presents selected financial information for the periods
December 31, 1997 and 1996, respectively.
Three Months Ended Six Months Ended
December 31, December 31,
1997 1996 1997 1996
Net sales $1,209,400 $1,084,930 $2,310,262 $1,793,043
Gross profit $452,047 $443,273 $900,776 $682,251
Gross margin 37.4% 40.8% 38.9% 38.0%
Operating expenses $265,981 $270,822 $593,952 $488,558
Net income $103,821 $120,759 $164,259 $121,798
Net income per share $0.03 $0.04 $0.05 $0.04
General
Logitek, Inc. (the "Company") reported a profit of $164,259 for the six
months ended December 31, 1997 versus a profit of $121,798 for the prior
year period. For the quarter ended December 31, 1997 the Company reported a
profit of $103,821 compared to a profit of $120,759 for the prior year
quarter. The Company's sales backlog is approximately $2,500,000 at December
31,1997. This reflects a$ 500,000 increase which the Company hopes will
continue to grow.
Results of Operations
Net sales for the first six months of fiscal 1997 were $2,310,262 compared
to $1,793,043, or an increase of $517,219. Net sales for the quarter ended
December 31, 1997 were $1,209,400 compared to $1,084,930 or an increase of
$124,470.
Gross profit increased to 38.9% in the current six month period compared to
38.0% for the prior year. This increase is attributable to increased sales
with only minimal additional manufacturing overhead.
Operating expenses for the six months ended December 31, 1996 increased
$105,394. This occurred as a result of additional general and administrative
overhead incurred as the Company plans for greater sales volume based on
increased bookings and increased sales activity.
Liquidity
As of December 31, 1997 and June 30, 1997 the Company had cash on hand of
$261,944 and $393,797, respectively; and, as of December 31, 1997 the
Company's current ratio was 2.81 compared to 2.76 as of June 30, 1997.
Total borrowings were $516,084 at December 31, 1997, $605,680 at June 30,
1997 and $656,954 at December 31, 1996.
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 24, 1997
the following votes were recorded:
1.To elect a board of three 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 3,167,675 0 7,400
Howard Fein 3,167,675 0 7,400
Francis Vuccii 3,167,675 0 7,400
2.To elect Marcum & Kliegman, Certified Public Accountants as the Company's
independent certified accountants:
Votes Cast
For Against Abstained
3,169,175 0 5,900
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
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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/ 13 / 98 By: /s/ Herbert L. Fischer
Herbert L. Fischer
President and
Chief Executive Officer
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