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, 1998
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 September 30,1998, their were 3,382,859 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, 1998 and
June 30, 1998 3
Statements of Operations and Retained Earnings
for the Three Months Ended September 30, 1998 and 1997 4
Statements of Cash Flows for the Three Months
Ended September 30, 1998 and 1997 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 September30,1998 June 30,1998
Current Assets: (Unaudited)
Cash $424,833 $429,713
Accounts receivable, 604,899 676,704
Inventories 1,058,604 1,061,103
Prepaid expenses and other 11,857 15,332
Total Current Assets 2,100,193 2,182,852
Property and equipment,less
accumulated depreciation 658,234 680,134
Other Assets:
Deferred Income Taxes,State 7,000 7,000
Goodwill 34,441 34,441
Other 47,649 48,695
Total Assets 2,847,517 2,953,122
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Current portion of long-term debt $81,220 $90,525
Capitalized lease obligation,current 22,802 22,123
Accounts payable 301,991 324,736
Accrued expenses 85,610 194,398
Total current liabilities 491,623 631,782
Capitalized Lease Obligation,
Less Current Portion 70,099 75,350
Long-term debt, less current maturities 288,018 300,360
Deferred income taxes 52,000 52,000
Total Liabilities 901,740 1,059,492
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 1,649,630 1,597,483
Sub-total 1,965,985 1,913,838
Less:
Treasury shares,at cost,187,941 shares (20,208) (20,208)
Total stockholders' equity 1,945,777 1,893,630
Total liabilities and stockholders'equit $2,847,517 $2,953,122
See notes to the financial statements.<PAGE>
LOGITEK, INC
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
For the Three Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended
September 30,
1998 1997
Net sales $1,089,905 $1,100,862
Cost of goods sold 708,642 652,133
Gross profit 381,263 448,729
Operating expenses:
Selling 78,108 91,916
General and
administrative 161,921 198,356
Research and development 55,305 37,699
Total operating expenses 295,334 327,971
Income (loss) from operations 85,929 120,758
Interest expense,net 13,782 16,320
Income (loss) before
provision for income taxes 72,147 104,438
Provision for income taxes 20,000 44,000
Net income (loss) 52,147 60,438
Retained earnings,beginning of period 1,597,483 1,196,693
Retained earnings,end of period $1,649,630 $1,257,131
Per share amounts
Net income (loss) $.02 $.02
Weighted average shares
outstanding 3,382,859 3,412,059
See Notes to financial statements<PAGE>
LOGITEK INC.
STATEMENTS OF CASH FLOWS
For the Three Months ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended
September 30,
1998 1997
Cash Flows from Operating Activities
Net income (loss) $52,147 $60,438
Adjustments to reconcile net
income (loss) to cash provided
by operating activiities:
Depreciation 21,900 23,250
Accounts receivable 71,805 48,490
Inventories 2,499 45,290
Prepaid expenses and other 3,475 28,862
Other assets 1,046 (228)
Accounts payable (22,745) (69,991)
Accrued expenses (108,788) (55,392)
Deferred Taxes 0 10,000
Total adjustments (30,808) 30,281
Net cash provided by (used in) operating
activities 21,339 90,719
Cash Flows from Financing Activities:
Repayment of Long Term Debt (26,219) (40,007)
Purchase of Property, Plant and Equipment 0 0
Net cash (used in) financing activities (26,219) (40,007)
Net increase (decrease) in cash (4,880) 50,712
Cash, beginning of period 429,713 393,797
Cash, end of period $424,833 $444,509
Supplemental disclosures:
Cash paid for:
Interest 13,782 16,320
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, 1998.
The results of operations for the three months ended September 30, 1998 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,
1998 1998
Raw materials $545,828 $547,117
Work-in-process 346,941 347,760
Finished goods 165,835 166,226
Total $1,058,604 $1,061,103
For the three months ended September 30, 1998 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,
%
1998 1997
Statutory rate 34.0 34.0
State income taxes, net of federal tax benefit 2.0 2.0
Utilization of tax credit (10.3) (6.0)
Other 2.0 12.0
Effective tax rate 27.7 42.0
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, 1998 and 1997.
Three Months Ended
September 30,
1998 1997
Net sales $1,089,905 $1,100,862
Gross profit $381,263 $448,729
Gross margin 35.0% 40.8%
Net income (loss) $52,147 $60,438
Net income (loss), per share $0.02 $0.02
General
Logitek, Inc. (the "Company") reported net income of $52,147 for the three
months ended September 30, 1998 versus $60,438 for the prior year period.
The Company's sales backlog is aproximately $1,750,000 at September 30, 1998
versus $2,500,000 at September 30, 1997.
Results of Operations
Net sales for the three months ended September 30,1998 were $1,089,905
compared to $1,100,862 or an decrease of $10,957, or 1%, from the prior year
period. This decrease is the result of certain jobs being delayed awaiting
engineering release. These releases are expected to occur early in the
second quarter.
<PAGE>
Gross profit decreased to 35.0% in the quarter ended September 30, 1998
compared to 40.8% for the prior year quarter. This decrease in gross profit
is a result of the Company's committment to additional labor in the
engineering and quality control areas. The Company belieives this investment
will pay off in the near term.
Operating expenses for the three months ended September 30, 1998 decreased
$32,637 or 10% This occurred as a result of the Company continuing to
maintain tight cost controls over its general and administrative expenses
as well as its general overhead.
Liquidity
As of September 30 and June 30, 1998 the Company had cash on hand of $424,833
and $429,713, respectively; and, as of September 30, 1998 the Company's
current ratio was 4.27 compared to 3.46 at June 30, 1998. Total borrowings
were $462,139 at September 30, 1998 and $488,358 at June 30, 1998 for a
decrease of $26,219 while accounts payable and accrued expenses decreased
$138,533.
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/ 5/ 98 By: /s/ Herbert L. Fischer
Herbert L. Fischer
President and
Chief Executive Officer
Date: 11/ 5/ 98 By: /s/ Herbert L. Fischer
Herbert L.Fischer
Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> SEP-30-1998
<CASH> 424,833
<SECURITIES> 0
<RECEIVABLES> 604,899
<ALLOWANCES> 0
<INVENTORY> 1,058,604
<CURRENT-ASSETS> 100,947
<PP&E> 658,234
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,847,517
<CURRENT-LIABILITIES> 491,623
<BONDS> 0
0
0
<COMMON> 36,000
<OTHER-SE> 1,909,777
<TOTAL-LIABILITY-AND-EQUITY> 2,847,517
<SALES> 1,089,905
<TOTAL-REVENUES> 1,089,905
<CGS> 708,642
<TOTAL-COSTS> 295,334
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,782
<INCOME-PRETAX> 72,147
<INCOME-TAX> 20,000
<INCOME-CONTINUING> 52,147
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 52,147
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
