UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended March 30, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number 0-16088
CERAMICS PROCESS SYSTEMS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 04-2832509
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
111 South Worcester Street, P.O. Box 338,
Chartley, Massachusetts 02712
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code:
(508) 222-7282
Former Name, Former Address and Former Fiscal Year if Changed
since Last Report:
Not Applicable.
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period than the registrant was required
to file such reports), and (2) has been subject to the filing
requirements for the past 90 days.
[ ] Yes [X] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date. Number of shares of common stock outstanding as of May
1, 1996: 7,917,504.
CERAMICS PROCESS SYSTEMS CORPORATION
Form 10-Q
For The Fiscal Quarter Ended March 30, 1996
Index
PART I: FINANCIAL INFORMATION Page
Item 1: Consolidated Financial Statements 3-8
Consolidated Balance Sheets as of
March 30, 1996 and December 30, 1995 3-4
Consolidated Statements of Operations
for the fiscal quarters ended March 30,
1996 and April 1, 1995 5
Consolidated Statements of Cash Flows
for the fiscal quarters ended March 30,
1996 and April 1, 1995 6
Notes to Consolidated Financial
Statements 7-8
Item 2: Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8-9
PART II: OTHER INFORMATION
Items 1-6 10
Financial Data Schedule 11
Signatures 12
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
<TABLE>
CERAMICS PROCESS SYSTEMS CORPORATION
Consolidated Balance Sheets
March 30, December 30,
1996 1995
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 1,084 $ 32,127
Accounts receivable, trade 171,195 211,575
Inventories 49,026 29,026
Prepaid expenses 9,524 10,824
Other current assets 300 475
Total current assets 231,129 284,027
Property and equipment:
Production equipment 948,322 941,512
Furniture and office equipment 65,529 65,529
1,013,851 1,007,041
Less accumulated depreciation ( 792,035) ( 765,635)
Net property and equipment 221,816 241,406
Deposits 1,328 953
Total Assets $ 454,273 $ 526,386
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CERAMICS PROCESS SYSTEMS CORPORATION
Consolidated Balance Sheets
March 30, December 30,
1996 1995
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 222,433 $ 176,494
Accrued expenses 602,888 523,257
Current portion of convertible
notes payable:
Related parties 920,000 920,000
Other 900,000 900,000
Total current liabilities 2,645,321 2,519,751
Convertible notes payable
less current portion:
Related parties -- --
Other 500,000 500,000
Total Liabilities 3,145,321 3,019,751
Stockholders' Equity (Deficit)
Common stock, $0.01 par value.
Authorized 15,000,000 shares;
issued 7,780,766 shares at March
30, 1996 and December 30, 1995 77,808 77,808
Preferred stock, $.01 par value.
Authorized 5,000,000 shares;
no shares issued and outstanding -- --
Additional paid-in capital 30,457,384 30,457,384
Accumulated deficit (33,165,405) (32,967,722)
( 2,630,213) ( 2,432,530)
Less treasury stock, at cost,
22,883 common shares ( 60,835) ( 60,835)
Total stockholders' equity
(deficit) ( 2,691,048) (2,493,365)
Total Liabilities and
Stockholders' Equity
(Deficit) $ 454,273 $ 526,386
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CERAMICS PROCESS SYSTEMS CORPORATION
Consolidated Statements of Operations
Fiscal Quarters Ended
March 30, April 1,
1996 1995
<S> <C> <C>
Revenue:
Product sales $ 386,482 $ 400,795
License agreements -- 2,000
Total revenue 386,482 402,795
Operating expenses:
Cost of product sales 409,908 430,092
Selling, general, and
administrative 115,505 161,425
Total operating expenses 525,413 591,517
Operating income (loss) ( 138,931) ( 188,722)
Other income (expense), net ( 58,752) ( 42,300)
Net income (loss) ($ 197,683) ($ 231,022)
Net income (loss) per share ($ 0.03) ($ 0.03)
Weighted average number of
common and common
equivalent shares
outstanding 7,757,883 7,587,903
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CERAMICS PROCESS SYSTEMS CORPORATION
Consolidated Statements of Cash Flows
Fiscal Quarters Ended
March 30, April 1,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ($197,683) ($231,022)
Adjustments to reconcile net loss to
cash provided by (used in)
operating activities:
Depreciation & amortization 26,400 39,568
Settlement of interest obligation -- 46,986
Changes in assets and liabilities:
Accounts receivable, trade 40,380 9,936
Inventories ( 20,000) 679
Prepaid expenses 1,300 ( 559)
Other current assets 175 8,519
Accounts payable 45,939 ( 46,061)
Accrued expenses 79,631 ( 42,104)
Deferred revenue -- ( 6,300)
Net cash used in
operating activities ( 23,858) ( 220,358)
Cash flows from investing activities:
Additions to property and equipment ( 6,810) ( 16,459)
Net change in deposits ( 375) 1,090
Net cash used in investing
activities ( 7,185) ( 15,369)
Cash flows from financing activities:
Repayment of capital lease obligations -- ( 7,532)
Proceeds from issuance of convertible
notes payable -- 250,000
Net cash provided by financing
financing activities -- 242,468
Net increase (decrease) in cash ( 31,043) 6,741
Cash at beginning of quarter 32,127 252,503
Cash at end of quarter $ 1,084 $259,244
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
CERAMICS PROCESS SYSTEMS CORPORATION
Notes to Consolidated Financial Statement
(Unaudited)
(1) Nature of Business
Ceramics Process Systems Corporation ("CPS" or "the Company"),
incorporated on June 19, 1984, is engaged in the design, development,
and manufacture of advanced ceramic and composite products for the
electronics and defense industries.
(2) Interim Consolidated Financial Statements
As permitted by the rules of the Securities and Exchange
Commission applicable to quarterly reports on Form 10-Q, these
notes are condensed and do not contain all disclosures required
by generally accepted accounting principles.
The accompanying financial statements for the fiscal quarters
ended March 30, 1996 and April 1, 1995, and the financial position as of
December 30, 1995, are unaudited. In the opinion of management, the
unaudited consolidated financial statements of CPS reflect all
adjustments necessary to present fairly the financial position and
results of operations for such periods.
The consolidated financial statements include the accounts
of CPS and its wholly-owned subsidiary, CPS Superconductor
Corporation. All significant intercompany balances and
transactions have been eliminated.
The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full
year.
(3) Net Loss per Share
Net loss per share is computed based on the weighted average number
of common shares outstanding during the period. Common stock
equivalents pertaining to stock options and convertible notes payable
were not considered in the calculations of net loss per share since
their effect would be antidilutive.
<TABLE>
(4) Inventory
Inventories consist of the following:
March 30, December 30,
1996 1995
<S> <C> <C>
Raw Materials $ 7,399 $ 7,399
Work in process 8,970 8,970
Finished goods 32,657 12,657
$ 49,026 $ 29,026
(5) Accrued Expenses
Accrued expenses consist of the following:
March 30, December 30,
1996 1995
Accrued legal and
accounting $ 159,673 $ 150,549
Accrued interest 277,680 219,839
Accrued payroll 52,173 67,364
Due to Kilburn Isotronics 79,583 57,713
Accrued other 33,779 27,792
$ 602,888 $ 523,257
<FN>
</TABLE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition
The Company incurred a net loss in the first fiscal
quarter of 1996 in the amount of $198 thousand, versus a
net loss of $231 thousand in the first fiscal quarter of 1995.
The Company's cash balance at March 30, 1996 and at December 30,
1995 was $1 thousand and $32 thousand, respectively.
The slight improvement in the Company's overall financial
performance in the first fiscal quarter of 1996 versus the first fiscal
quarter of 1995 was primarily attributable to decreased payroll costs
related to personnel reductions in the third quarter of 1995.
The Company's entire operations are currently housed in a leased
facility in Chartley, Massachusetts. The Company is operating at the
Chartley facility as a tenant at will.
Through the first four months of 1996, the Company has financed its
working capital requirements through operations. Although the Company
has historically made timely payments to its trade creditors, in 1996
the Company will require working capital support for its operations from
external financing, and there is no assurance that adequate funds will
be available or on terms acceptable to the Company.
Results of Operations
The Company's total revenue in the first fiscal quarter of 1996 was
$386 thousand, similar to the $403 thousand amount of revenue recognized
in the first fiscal quarter of 1995. Total operating expenses in the
first fiscal quarter of 1996 amounted to $525 thousand, versus operating
expenses of $591 thousand in the first fiscal quarter of 1995.
Of the $66 thousand decrease in operating expenses between the
first fiscal quarter of 1996 and the first fiscal quarter of 1995, $20
thousand related to a decrease in cost of sales, and $46 thousand
related to a decrease in selling general and administrative expenses.
Most of the decrease in operating expenses was due to a $47 thousand
decrease in payroll and related costs, as a result of personnel
reductions in the third fiscal quarter of 1995. The remaining decrease
in operating expenses between the fiscal quarters was primarily due to
decreases in marketing and insurance expenses.
Other expense increased $17 thousand, from $42 thousand in the
first fiscal quarter of 1995 to $59 thousand in the first fiscal quarter
of 1996. Other expense consisted almost exclusively of interest
expense. The increase in interest expense in the first fiscal quarter
of 1996 versus the first fiscal quarter of 1995 was due to a $450K
increase in notes payable, the proceeds of which were received in the
second and third fiscal quarters of 1995.
The cumulative effect of these revenues and costs resulted
in a net loss of $198 thousand, or $0.03 loss per share, in the
first fiscal quarter of 1996, versus a net loss of $231 thousand,
or $0.03 loss per share, in the first fiscal quarter of 1995.
PART II OTHER INFORMATION
Item 1 through Item 5: None
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None
[TYPE] EX-27
[DESCRIPTION] ART. 5 FDS for 3RD QUARTER 10-Q
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-28-1996
[PERIOD-END] MAR-30-1996
[CASH] 1,084
[SECURITIES] 0
[RECEIVABLES] 171,195
[ALLOWANCES] 0
[INVENTORY] 49,026
[CURRENT-ASSETS] 231,129
[PP&E] 1,013,851
[DEPRECIATION] 792,035
[TOTAL-ASSETS] 454,273
[CURRENT-LIABILITIES] 2,645,321
[BONDS] 0
[COMMON] 77,808
[PREFERRED] 0
[OTHER-SE] (2,768,856)
[TOTAL-LIABILITY-AND-EQUITY] 454,273
[SALES] 386,482
[TOTAL-REVENUES] 386,482
[CGS] 409,908
[TOTAL-COSTS] 525,413
[OTHER-EXPENSES] 58,752
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 59,097
[INCOME-PRETAX] ( 197,683)
[INCOME-TAX] 0
[INCOME-CONTINUING] ( 197,683)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] ( 197,683)
[EPS-PRIMARY] ( 0.03)
[EPS-DILUTED] ( 0.03)
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Ceramics Process Systems Corporation
(Registrant)
Date: May 14, 1996 /s/Grant C. Bennett
Grant C. Bennett
President and Director
(Principal Executive
Officer)
Date: May 14, 1996 /s/Peter F. Valentine
Peter F. Valentine
Controller and
Treasurer
(Principal Financial
and Accounting Officer)
