UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Amendment No. 1)
(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
Commission file number 0-16225
EMCON
(Exact name of Registrant as specified in its charter)
California 94-1738964
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 South El Camino Real, Suite 1200
San Mateo, California 94402
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 375-1522
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 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 [ ]
8,723,099 shares of Common Stock Issued and Outstanding as of November 3, 1998.
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INFORMATION TO BE INCLUDED IN THE REPORT
Amendment No. 1
The undersigned registrant hereby amends its Form 10-Q for the period ended
September 30, 1998 filed with the Securities and Exchange Commission on November
6, 1998, to include the following disclosure.
Year 2000
Impact of Year 2000: The year 2000 (Y2K) issue is the result of computer
programs being written using two digits rather than four to define applicable
years. Any of the Company's computer programs that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business activities.
The Company's State of Readiness: The Company is in the process of completing
its internal analysis of potential Y2K compliance issues. Internal surveys are
being completed to identify potential hardware and software concerns and other
potential non-IT systems that may be affected. During 1998, the Company began
testing its internal systems for Y2K compliance and anticipates completing the
testing phase in the first quarter of 1999. The Company has begun to review
third party vendor/suppliers and customers that management believes could have a
material effect to its business, to ascertain if, and when they will be Y2K
compliant. Survey letters to these third parties will be distributed early in
the first quarter of 1999. Information supplied by third parties will be entered
into a database and reviewed by the Company's IT department and business
managers to determine whether there are any potential issues. Once issues are
identified (second quarter of 1999), senior management will determine their
potential impact to the Company's business and develop action plans accordingly.
The Cost to Address the Company's Year 2000 Issues: Budgets for the Company's
internal computer, network, phone and related system needs were completed in the
fourth quarter of 1998. It is anticipated that the costs to bring these systems
into Y2K compliance is approximately $1,850,000; consisting primarily of
software updates, computer replacements, telephone system changes and other
costs, including disposition of assets, and outside consulting. The majority of
these costs are being incurred in the ordinary course of business as part of
EMCON's normal replacement/upgrade program for it's computer, network, telephone
and related systems. It is expected that 40%, 35%, 20% and 5% of the total costs
will be incurred in first, second, third and fourth quarters of 1999,
respectively. Approximately $1,000,000 of the $1,850,000 estimated costs will be
financed through multi-year operating leases. The costs of the project and the
dates on which the Company believes it will complete the Y2K modifications are
based on management's best estimates, which were derived utilizing numerous
assumptions of future events.
The Company believes it will be able to test and remedy the majority of any Y2K
issues utilizing its existing IT staff with minimal use of outside consultants.
The Risks of the Company's Year 2000 Issues: The Company does not expect the Y2K
project to have a significant effect on operations. At this time, the Company
believes that any internal Y2K issues can be resolved prior to the year 2000.
The potential impact of Y2K issues on the Company's two reporting segments, the
PSD and EOC is expected to be somewhat different. PSD, a consulting operation,
has less exposure due to the personal services nature of its business. A portion
of EOC's revenues, however, involve the use of sophisticated equipment which at
this time, based on initial testing, the Company believes to be Y2K compliant.
To date, the Company has not received from its vendors, any indication that the
Company would not be able to receive necessary supplies for its construction of
fabrication processes.
The Company's Contingency Plans: The Company has not established a contingency
plan to address unexpected failures due to Y2K problems. Internal testing of
systems should be substantially finished prior to April, 1999. The Company plans
to evaluate the status of completion of its internal testing and the information
supplied by its vendors and customers in June, 1999 and determine whether such a
plan is necessary.
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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.
Date: March 11, 1999 EMCON
\s\ R. Michael Momboisse
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R. MICHAEL MOMBOISSE
Chief Financial Officer,
Vice President - Legal, and Secretary
(Duly authorized and principal
financial and accounting officer)
