Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended December 31, 1998
Transition Report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number 0-16152
Metrisa, Inc.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 04-2891557
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
25 Wiggins Avenue, Bedford, Massachusetts 01730
(Address of Principal Executive Offices)
(781) 275-3300
(Issuers Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act 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 No
As of December 31, 1998, 1,020,074 shares of Common Stock were
outstanding.
Transitional Small Business Disclosure Format:
Yes No _______
FORM 10-QSB
QUARTERLY REPORT
TABLE OF CONTENTS
Facing Page . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 1
Table of Contents . . . . . . . . . . . . . . . . . . . . . . .... . 2
PART I. FINANCIAL INFORMATION (*)
Item 1. Condensed Consolidated Financial Statements Balance Sheets 3
Statements of Loss . . . . . . . . . . . . . . . . . . . . 5
Statements of Cash Flows. . . . . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements.. . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . 12
Item 2. Changes in Securities . . . . . . . . . . . . .. . 12
Item 3. Defaults upon Senior Securities . . . . . . . . . . 12
Item 4. Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . . . . . 12
Item 5. Other Information . . . . . . . . . . . . . . .. . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . .. . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 13
(*) The financial information at September 30, 1998 has been
taken from the audited financial statements at that date. All
other financial statements are unaudited.
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
METRISA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, September 30,
1998 1998
(Unaudited) (*)
CURRENT ASSETS:
Cash and cash equivalents $1,624,092 $ 2,469,053
Accounts receivable, less allowance
for doubtful accounts of $78,500
at December 31, 1998 and
September 30, 1998 1,757,357 1,926,602
Inventories 1,408,056 1,370,460
Other current assets 124,179 93,029
TOTAL CURRENT ASSETS 4,913,684 5,859,144
EQUIPMENT AND FIXTURES - net 350,895 377,783
OTHER ASSETS - net 1,922,231 1,970,981
TOTAL ASSETS $7,186,810 $8,207,908
The accompanying notes are an integral part of these financial statements.
(*)Balance sheet at September 30, 1998 has been derived from the
audited financial statements at that date. All other financial
statements are unaudited.
METRISA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - Continued
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, September 30,
1998 1998
(Unaudited) (*)
CURRENT LIABILITIES:
Notes payable to bank $ 213,059 $ 213,059
Accounts payable 1,053,262 1,312,773
Accrued expenses and other 410,785 508,319
Current portion of long-term debt 399,775 561,441
TOTAL CURRENT LIABILITIES 2,076,881 2,595,592
Long- term debt,
less current portion 2,695,172 2,833,777
Commitments
STOCKHOLDERS' EQUITY:
Common stock, $.50 par value,
2,000,000 shares authorized;
1,020,074 and 1,022,911 shares
issued and outstanding at
December 31, 1998 and
September 30, 1998, respectively 510,037 511,456
Additional paid-in capital 1,995,939 2,455,069
Retained earnings
(accumulated deficit) (78,229) 242,276
2,427,747 3,208,801
Less: Treasury stock (at cost) (12,990) (430,262)
TOTAL STOCKHOLDERS' EQUITY 2,414,757 2,778,539
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $7,186,810 $8,207,908
The accompanying notes are an integral part of these financial
statements.
(*)Balance sheet at September 30, 1998 has been derived from the
audited financial statements at that date. All other financial
statements are unaudited.
METRISA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(Unaudited)
Three-Month Period Ended December
31,
1998 1997
NET REVENUES $1,627,938 $1,634,223
COST OF SALES 828,956 836,858
GROSS PROFIT 798, 982 797,365
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 856,573 885,822
RESEARCH AND DEVELOPMENT 155,803 172,792
TOTAL OPERATING EXPENSE 1,012,376 1,058,614
`
LOSS FROM OPERATIONS (213,394) (261,249)
INTEREST EXPENSE - net (107,111) (27,282)
LOSS BEFORE MINORITY INTEREST (320,505) (288,531)
MINORITY INTEREST IN NET INCOME
OF CONSOLIDATED SUBSIDIARY - (2,318)
NET LOSS ( $320,505) ( $290,849)
NET LOSS PER COMMON SHARE:
basic and diluted ($0.31) ($0.34)
Shares Outstanding--
basic and diluted 1,020,074 862,070
The accompanying notes are an integral part of these financial
statements.
METRISA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three-Month Period Ended December 31
CASH FLOWS FROM OPERATING
ACTIVITIES:
1998 1997
Net loss ($320,505) ($290,849)
Adjustments to reconcile net loss to
net
cash provided by (used for)
operating activities:
Depreciation and amortization 89,535 57,165
Minority interest - 2,318
Changes in operating assets and
liabilities:
Accounts receivable 169,245 373,718
Notes receivable - 100,000
Inventories (37,596) (13,517)
Other current assets (31,150) (36,914)
Accounts payable and accrued expenses (357,045) (450,187)
Net cash used for operating activities (487,516) (258,266)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Equipment and fixtures additions (15,231) (23,171)
Decrease in other assets 1,334 --
Cash paid for Micromet acquisition (208,166) --
Net cash used for investing activities (222,063) (23,171)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal payments of long-term debt (92,105) (59,817)
Proceeds from sale of common stock -- 11,416
Purchase of treasury stock (43,277) --
Net cash used for financing activities (135,382) (48,401)
Net decrease in cash and cash equivalents (844,961) (329,838)
Cash and cash equivalents,
beginning of period 2,469,053 935,717
Cash and cash equivalents,
end of period $1,624,092 $605,879
The accompanying notes are an integral part of these financial
statements.
METRISA, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles. They include the accounts of Tytronics (defined
below), and subsidiaries for the period ended December 30, 1997
and the accounts of Metrisa, Inc. including the effects of the
Reorganization (defined below) from the closing date forward, for
the period ended December 31, 1998.
On May 1,1998, the Company (formerly Holometrix, Inc.)
completed a reorganization ("Reorganization") pursuant to which
Tytronics Incorporated ("Tytronics"), the majority owner of the
Company, and National Metal Refining Company ("Nametre"), the
majority owned subsidiary of the Company, were merged into the
wholly-owned subsidiary of the Company, Holometrix Acquisition
Corp., which was followed by the merger of Holometrix Acquisition
Corp. into the Company. As part of this Reorganization,
Holometrix changed its name to Metrisa, Inc., and effected a 50:1
reverse stock split of its issued and outstanding capital stock.
On February 13, 1998, Tytronics acquired the assets of Micromet
Instruments Inc. ("Micromet"), and thus Micromet was also merged
into Holometrix Acquisition Corp., but as part of Tytronics.
Although Metrisa is the surviving corporation, because the
shareholders of Tytronics obtained a majority of voting rights in
Metrisa, Tytronics is deemed to be the acquiring entity for
accounting purposes. Accordingly, the Reorganization has been
accounted for as a recapitalization of Tytronics and the
acquisition by Tytronics of the minority interests of Metrisa
(formerly Holometrix) and Nametre under the purchase method of
accounting in accordance with Accounting Principles Board Opinion
No. 16, "Business Combinations." The accompanying financial
statements reflect at the closing date, the acquisition by
Tytronics of the minority interest of Metrisa and Nametre based
on an independent valuation of Tytronics, Nametre, and Metrisa by
an independent investment banker.
A 50 to 1 reverse stock split was effected in May 1998 in
connection with the Company's Reorganization and resulting
recapitalization. In addition, the Company's Certificate of
Incorporation was amended to change its authorized common stock
and par value to 2,000,000 shares with a $.50 par value. All net
income per share information and common stock information
presented in the accompanying consolidated financial statements
and notes to the financial statements have been retroactively
restated to reflect the stock split and recapitalization.
The results of operations for the interim period reported
are not necessarily indicative of those that may be expected for
the full year. The accompanying financial information is
unaudited; however, in the opinion of management, all adjustments
(consisting solely of normal recurring adjustments) necessary to
a fair presentation of the operating results of the period have
been included. The interim financial statements should be read
in conjunction with the audited financial statements and notes
thereto for the years ended and as of September 30, 1998 included
in the Company's Annual Report on Form 10-KSB
Note B - Inventory
Inventory consisted of the following at:
December 31, 1998 September 30, 1998
Raw materials $896,659 $858,241
Work-in-process 290,003 263,213
Finished Goods 221,394 249,006
$1,408,056 $1,370,460
Note C - Net Income/Loss Per Share
In the first quarter of fiscal 1998, the Company adopted
Statement of Financial Accounting Standards No. 128 ("SFAS 128"),
"Earnings Per Share". SFAS 128 requires the presentation of both
basic and diluted earnings per share and replaces the previously
required standards for computing and presenting earnings per
share. Outstanding options and warrants are inlcuded in the
computation of diluted earnings per share using the treasury
stock method when their effect is dilutive. For the period
presented, the exercise price of the options and warrants was
greater than the average market price of the Company's common
stock. Net Income (loss) per share amounts for all periods have
been presented and where appropriate restated to conform to the
requirements of SFAS 128. The following is a reconciliation of
the denominator (number of shares) used in the computation of
income (loss) per share. The numerator (net income or loss) is
the same for the basic and diluted computations.
Three Month Period
Ended December 31,
1998 1997
Basic shares 1.020,074 862,070
Effect of dilutive -- --
securities
Dilutive shares 1,020,074 862,070
The following table summarizes securities that were
outstanding as of December 31, 1998 and 1997, but not included in
the calculation of diluted income (loss) per share because such
shares are antidilutive:
Three Month Period
Ended December 31,
1998 1997
Options 151,580 99,504
Warrants 539,340 171,756
Preferred Stock -- 149,276
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three-Month Period Ended December 31, 1998, as Compared With the
Three-Month Period Ended December 31, 1997
Net Revenues in the first quarter of fiscal 1999 totaled
$1,627,938 as compared to $1,634,223 in the comparable quarter of
1998, a decrease of $6,285. Revenues were basically the same
from the first quarter of fiscal 1998 due to the decrease in
sales to the southeast Asian countries from the Nametre division,
offset by increased sales in the other divisions.
Cost of sales decreased by $7,902, or 1%, from $836,858 (51%
of sales) in the first quarter of fiscal 1998 to $828,956 (also
51% of sales) in the same period of fiscal 1999.
Selling, general and administrative expenses decreased by
$29,249, or 3%, from $885,822 (54% of sales) to $856,573 (53% of
sales). The decrease was primarily a result of the consolidation
of selling and marketing distribution, offset by increased
general and administrative costs resulting from the amortization
of expenses related to the Reorganization of the Company in April
1998, and the amortization of financing costs related to the
$2,000,000 subordinated debt financing in September 1998.
Research and development decreased $16,989 from $172,792
(11% of sales) to $155,803 (10% of sales). This decrease is a
result of consolidating of expenses as a consequence of the
Reorganization.
Loss from operations was $213,394 in the first quarter of
fiscal 1999, compared with a loss of $261,249 in the comparable
period of fiscal 1998. Net loss was $320,505 in the first
quarter of 1999 compared to a net loss of $290,849 in the first
period of 1998. This increased loss was a result of increased
interest expenses associated with the subordinated debt
financing.
LIQUIDITY AND CAPITAL RESOURCES
Total Assets decreased by $1,021,098 (12%) in the first
quarter of fiscal 1998, from $8,207,908 to $7,186,810. Cash
decreased by $844,961, primarily due to the completion of the
payment of debt associated with the acquisition of Micromet,
expenses associated with the funding of the $2,000,000
subordinated debt financing, and its associated interest
expenses, and payment of extended payables. Due to increased
collection activity, accounts receivable decreased by $169,245.
Inventories increased by $37,596, other current assets increased
by $31,150 and equipment and fixtures decreased by $26,888
primarily due to depreciation. Other assets decreased by $48,750
mainly due to amortization.
Total Liabilities decreased by $657,316, primarily due to a
decrease in accounts payable of $259,511, a decrease of $97,534
in accrued expenses, and a decrease of $300,271 in long-term
debt. Accounts payable decreased by $259,511 from $1,312,773 at
September 30, 1998 to $1,053,262 at December 31, 1998 due to
payment of extended payables, payment of commissions due to
Manufacturers' representatives and expenses associated with the
$2,000,000 subordinated debt financing.
Accrued expenses decreased by $97,534, from $508,319 at
September 30, 1998 to $410,785 at December 31, 1998 primarily
because of payment of taxes. Long-term debt decreased by
$300,271 from $3,395,218 at September 30, 1998 to $3,094,947 at
December 31, 1998 due to the retiring of debt associated with the
Micromet acquisition, and a portion of other long-term debt
obligations.
Operating cash flows were negative in the first quarter of
fiscal 1999, amounting to $487,516 as compared to a negative
$258,266 in the comparable quarter of fiscal 1998. Operating
cash flows approximated the sum of net loss of $320,505 plus
depreciation and amortization of $89,535, with decreases in
accounts receivable of $169,245, offset by increases in inventory
of $37,596 and other current assets of $31,150 and a decrease in
accounts payable and accrued expenses of $357,045.
The Company funded increases in equipment and fixtures of
$15,231 along with a decrease in other assets of $1.334.
Decrease in long-term debt of $300,271 resulted from the payment
of the remainder of the purchase of the Micromet acquisition, in
the amount of $208,166, and other long-term debt.
The net affect of these transactions was a decrease in cash
of $844,961, providing cash at the end of the first quarter of
fiscal 1999 of $1,624,092.
As of December 31, 1998 the Company had an outstanding order
backlog for product and services of approximately $978,900, as
compared to a backlog of $1,031,000 as of December 31, 1997. The
Company believes substantially all of the $978,900 backlog will
be realized in fiscal 1999.
Notes Payable Line of Credit
As of December 31, 1997, the Company was party to a Silicon
Valley Bank combined line of credit and term loan of $1,500,000,
secured by substantially all assets of the Company. As of
September 23, 1998, this line was increased to $1,750,000.
Advances under this line cannot exceed 75% of the Company's
eligible accounts receivable plus 20% of inventory, as defined.
All outstanding amounts are payable on demand and advances are
contingent upon maintaining certain covenants relative to
profitability, liquidity and tangible net worth. As of December
31, 1998, the Company was in compliance with all covenants and
ratios of this line of credit.
As of September 29, 1998, the company was party to a
$2,000,000 subordinated debt financing agreement with its
subordinated debt lender secured by substantially all of the
assets of the Company, but subordinated to the Silicon Valley
Bank financing. This loan is due in full September 30, 2003,
with interest-only payments for the first two years.
Effect of Reorganization and Other Company Initiatives
The Company expects to continue to invest in enhanced sales
and marketing efforts, new product development, and the
development of strategic relationships, including licensing,
acquisitions, mergers, or OEM agreements. Management believes
that operating capital and the line of credit from Silicon Valley
Bank, and the $2,000,000 subordinated debt financing from Sirrom,
will provide sufficient capital to maintain stable Company
operations throughout fiscal 1999. As of May 1, 1998, the
Company completed the Reorganization previously discussed,
pursuant to which Tytronics, Micromet and Nametre were merged
into the wholly-owned subsidiary of the Company, Holometrix
Acquisition Corp., which was followed by the merger of Holometrix
Acquisition Corp. into the Company. As part of the
Reorganization, Holometrix changed its name to Metrisa, Inc., and
effected a 50 to 1 reverse stock split of its issued and
outstanding capital stock. Management believes that the
Reorganization will result in increased efficiencies for the
Company and provide for more stable Company operations. However,
there can be no assurance that additional or adequate
profitability and operating funds will be generated as a result
of revenue increases or the Reorganization, or that strategic
relationships will materialize, or that additional funding, if
required, can be obtained on acceptable terms.
Year 2000 ("Y2K")
The Company is aware of the issues related to the approach
of the Year 2000 and has assessed and investigated what steps
must be taken to ensure that its critical systems and equipment
will function appropriately after the turn of the century. The
assessments included a review of what systems and equipment need
to be changed or replaced in order to function correctly.
With the exception of remediation and implementation
consequences not known to the Company at this time, the Company
believes that all systems should be fully implemented by the end
of the fourth quarter of fiscal 1999.
As part of the Company's assessment of Y2K issues,
consideration was given to the possible impact upon the Company
from using purchased software, suppliers and outside service
providers. The Company's efforts with regard to Y2K issues are
dependent in part upon information received from such suppliers
and vendors upon which the Company has reasonably relied. While
it is not possible for the Company to predict all future outcomes
and eventualities, the Company is not aware, at this time, of any
Y2K non-compliant situations with regard to any of its purchased
software or its use of suppliers and outside service providers.
The Company estimates that it will spend approximately
$100,000 to fully implement its Y2K compliance program. All Y2K
costs have been and will continue to be funded from operations.
The Company has evaluated its instruments and associated
software and has found them to be Y2K compliant, since the
software does not rely on any date-related information for its
normal operation.
The Company has formulated a contingency plan to deal with
Y2K issues. However, due to the complexity and widespread nature
of such issues, the contingency planning process of necessity
must be an ongoing one requiring possible further modification as
more information becomes known regarding (1) the Company's own
systems and facilities, and (2) the status and changes therein of
the Y2K compliance efforts of outside suppliers and vendors. As
significant Y2K uncertainties remain outside the control of the
Company, at this time the Company is unable to determine a most
reasonably likely worst case scenario.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company was not involved in any material legal
proceedings as of the date of this report.
Item 2. Changes in Securities
Not applicable.
Item 3.Defaults Upon Senior Securities
Not applicable.
Item 4.Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders,
whether through the solicitation of proxies or otherwise,
during the quarter ended December 31, 1998.
Item 5. Other Information
Not applicable.
Item 6.Exhibits and Reports on Form 8-K
(a) Exhibits
Financial Data Schedule.
(b) Reports on Form 8-K
No applicable.
SIGNATURE
Pursuant to the requirements of the Exchange Act, the
Registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Metrisa, Inc.
By: \s\ John E. Wolfe
John E. Wolfe
President
Date: February 10, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-QSB
DECEMBER 31, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 1,624,092
<SECURITIES> 0
<RECEIVABLES> 1,835,857
<ALLOWANCES> (78,500)
<INVENTORY> 1,408,056
<CURRENT-ASSETS> 4,913,684
<PP&E> 1,239,755
<DEPRECIATION> (888,860)
<TOTAL-ASSETS> 7,186,810
<CURRENT-LIABILITIES> 2,076,881
<BONDS> 2,695,172
0
0
<COMMON> 510,037
<OTHER-SE> 1,904,720
<TOTAL-LIABILITY-AND-EQUITY> 7,186,810
<SALES> 1,627,938
<TOTAL-REVENUES> 1,627,938
<CGS> 828,956
<TOTAL-COSTS> 828,956
<OTHER-EXPENSES> 1,012,376
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 107,111
<INCOME-PRETAX> (320,505)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> (320,505)
<EPS-PRIMARY> (0.31)
<EPS-DILUTED> (0.31)
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