<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
---- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995 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 0-16277
FI LIQUIDATING COMPANY, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-2666121
-------- ----------
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Hughes Center
Suite 200
3753 Howard Hughes Parkway
Las Vegas, Nevada 89109
(702) 892-3772
(Address, including zip code and telephone number, including area code, of
registrant's principal executive officers)
Indicate by checkmark 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 periods 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
At June 30, 1995, 9,281,453 shares of common stock of the registrant were
outstanding.
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PART I - FINANCIAL INFORMATION
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ITEM 1 - FINANCIAL STATEMENTS
-----------------------------
FI LIQUIDATING COMPANY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months
Ended June 30
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1995 1994
------ ------
<S> <C> <C>
Net sales $ - $ -
Costs and expenses:
Cost of sales - -
General and administrative 30 38
------ ------
Loss from operations ( 30) ( 38)
Realized and unrealized gain (loss) on
Flextronics International Ltd.:
Realized gain 491 -
Change in unrealized appreciation 1,592 ( 820)
Other income (loss), net 13 ( 35)
------ ------
Income (loss) before provision for taxes on
income and extraordinary credit 2,066 ( 893)
Provision for taxes on income 702 -
------ ------
Income (loss) before extraordinary credit 1,364 ( 893)
Extraordinary credit - utilization of net
operating loss carryforward 702 -
------ ------
Net income (loss) 2,066 ( 893)
====== ======
Net income (loss) per share:
Income (loss) before extraordinary credit .15 ( .10)
Extraordinary credit .07 -
------ ------
Net income (loss) per share .22 ( .10)
====== ======
Shares used in computing per share amounts 9,391 9,281
====== ======
</TABLE>
See accompanying notes.
2
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FI LIQUIDATING COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
June 30 March 31
1995 1995
------- --------
Assets
<S> <C> <C>
Current assets:
Cash $ 36 $ 10
Marketable securities 1,291 395
Prepaid expenses and other 20 20
Assets held for sale 75 75
------ ------
Total current assets 1,422 500
Investment in Flextronics International Ltd. 4,875 3,725
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$ 6,297 $ 4,225
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 22 $ 21
Other accrued liabilities 417 412
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Total current liabilities 439 433
Stockholders' equity:
Preferred Stock, $.01 par value; 10,000
shares authorized;
Common Stock, $.01 par value;
25,000 shares authorized;
9,281 shares issued 93 93
Additional paid-in capital 29,748 29,748
Accumulated deficit (23,983) (26,049)
Stockholders' equity 5,858 3,792
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$ 6,297 $ 4,225
====== ======
</TABLE>
See accompanying notes.
3
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FI LIQUIDATING COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months
Ended June 30
------------------
<S> <C> <C>
1995 1994
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Operating activities:
Net income (loss) $ 2,066 $( 893)
Adjustment to reconcile net income (loss)
to net cash used for operating activities:
Realized and unrealized (gain) loss on
Flextronics International Ltd. (2,083) 820
Changes in operating assets and liabilities:
Prepaid expenses and other assets ( 14) ( 3)
Accounts payable and accrued liabilities 6 59
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Net cash used for operating activities ( 25) ( 17)
Investing activities:
Proceeds from sales of shares in Flextronics
International Ltd. 933 -
Purchase of marketable securities ( 882) -
------
Net cash provided by investing activities 51 -
------- ------
Increase (decrease) in cash 26 ( 17)
Cash beginning of period 10 45
------- ------
Cash end of period $ 36 $ 28
======= ======
</TABLE>
See accompanying notes.
4
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. Basis of presentation
The accompanying financial statements as of June 30, 1995 and March 31,
1995 and for the three months ended June 30, 1995 and June 30, 1994 have
been prepared on a liquidating basis of accounting with assets and
liabilities stated at fair value. The Company has wound down its
operations and is continuing to implement a formal plan of liquidation
approved by the Shareholders in June 1992.
The condensed consolidated financial statements at June 30, 1995 and March
31, 1995 and for the three months ended June 30, 1995 and June 30, 1994,
respectively, are unaudited but include all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of management,
necessary to present a fair statement of the results of interim periods.
The condensed consolidated financial statements and notes thereto should be
read in conjunction with the consolidated financial statements for the year
ended March 31, 1995, as presented in the Registrant's Annual Report on
Form 10-K.
2. Investment in Flextronics International Ltd.
At March 31, 1994, the Company held 171,000 shares of Flextronics
International Ltd. capital stock. In addition, the Company held an option
from Flextronics International Ltd. to purchase 155,843 of its ordinary
shares at an exercise price of $3.21 per share ("Flex Option"), as well as
an option from certain shareholders of Flextronics International Ltd. to
acquire 110,379 additional ordinary shares of Flextronics International
Ltd. at an exercise price of $3.16 per share (the "Shareholder Option").
During fiscal 1995, the Company sold 55,500 shares of Flextronics
International Ltd. for $772,375. The Company exercised its options from
Flextronics International Ltd. and purchased 155,843 shares for $500,000.
The Company also negotiated a cashless exchange with the shareholders of
Flextronics International Ltd. whereby the Company acquired 88,233 shares
of Flextronics International Ltd. for the surrender of that option.
During the three months ended June 30, 1995, the Company sold 60,000 shares
of Flextronics International Ltd. for $933,125.
5
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The 155,843 shares acquired from Flextronics International Ltd. are
"restricted securities" as that term is defined in Rule 144 under the
Securities Act of 1933 (the "Act") and may not be resold until November 18,
1996 unless the shares are registered under the Act or an exemption from
registration is available. The 88,233 shares acquired by the Company for
the option from shareholders of Flextronics International Ltd. were also
"restricted securities" as that term is defined in Rule 144 under the Act.
However, such restrictions terminated on June 30, 1995. At June 30, 1995
the closing price for Flextronics International Ltd. as reported on NASDAQ
was $21.875 per share. At June 30, 1995 the fair value of the 155,843
shares which the Company may not resell under Rule 144 until November 18,
1996 reflects a discount of 40% from the closing price reported on the
NASDAQ National Market System due to aforementioned restrictions on
transfer. The reported fair value of the 143,733 shares of Flextronics
International Ltd. which are not restricted under the Act reflects a 10%
discount due to the limited trading activity of the shares.
3. Net income (loss) per share
Net income per share is computed based on the weighted average number of
common shares and dilutive common stock equivalents. The computation of
net loss per share excludes common equivalent shares since they were
antidilutive.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
---------------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Overview
- --------
The Company has substantially completed a major restructuring and wind down of
its worldwide business and in June 1992 adopted a plan of liquidation. As a
result of these activities, the Company's financial position at June 30, 1995,
and its operating results for the three months then ended, are not indicative of
the Company's expected operating performance and liquidity and capital resource
needs. The restructuring and wind down results in eliminating revenues and
expenses other than general and administrative expenses needed to manage its
assets and creditor relations. The liquidation activities of the Company will
be the orderly disposal of its remaining assets to fund its remaining
obligations. Its principal assets are 299,576 shares of Flextronics
International Ltd. as well as cash and marketable securities of $1,327,000.
6
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Results of operations
- ---------------------
Three months ended June 30, 1995 compared to three months ended June 30, 1994
- -----------------------------------------------------------------------------
Because of the restructuring and recapitalization described in the preceding
Overview, any comparison of net revenues and operating expenses for the three
months ended June 30, 1995 to those for the three months ended June 30, 1994 is,
in the opinion of management, not meaningful.
For the three months ended June 30, 1995 realized and unrealized gain on
Flextronics International Ltd. of $2,083,000 was recognized. (See Note 2 to the
financial statements.) The market close on March 31, 1995 was $13.75 and the
market close on June 30, 1995 was $21.875. For the three months ended June 30,
1994 a devaluation of Flextronics International Ltd. of $820,000 was recognized.
The market close on March 31, 1994 was $12.50 and the market close on June 30,
1994 was $9.375.
Other income of $13,000 for the three months ended June 30, 1995 primarily
consisted of reversal of provisions for claims which can no longer be assessed.
Other income (loss) of $(35,000) for the three months ended June 30, 1994
primarily consisted of a charge-back on a prior year's insurance policy.
The provision for taxes on income of $702,000 is provided for the three months
ended June 30, 1995 based on income before extraordinary credit. No provision
for taxes is provided for the three months ended June 30, 1994 due to the loss
before extraordinary credit in the period.
Capital resources and liquidity
- -------------------------------
For the three months ended June 30, 1995 cash increased by $26,000 as compared
to a decrease of $17,000 for the three months ended June 30, 1994. Cash
outflows from operating activities consisted primarily of winding down
operations and liquidating the assets in both years. The cash inflow from
investing activities reflects the sales of Flextronics International Ltd. shares
net of purchases of marketable securities.
The Company's balance sheet at June 30, 1995 shows a shareholders' equity of
$5,858,000. The Flextronics International Ltd. shares owned by the Company are
carried on the financial statements at $4,875,000 which is the aggregate fair
value of such shares based on the closing market price on NASDAQ on June 30,
1995 of $21.875 per share reduced for the significant restrictions on transfer.
(See Note 2 to financial statements.)
The Company has cash and marketable securities at June 30, 1995 of $1,327,000 as
well as 143,733 shares in Flextronics International Ltd. which may be sold in
the public market. (Between July 1, 1995
7
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and August 6, 1995, the Company has sold 30,000 shares of Flextronics
International Ltd. for $720,000.) Such amounts should be sufficient to complete
an orderly liquidation.
The timing for the Company to complete the liquidation is dependent upon its
ability obtain the necessary regulatory clearances and eliminate the remaining
restrictions on the disposition of assets. The amount of the liquidating
distributions is primarily dependent on the performance of Flextronics
International Ltd. and the Company's ability to dispose of its remaining assets
and obligations.
8
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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 thereunder duly authorized.
FI LIQUIDATING COMPANY, INC.
(Registrant)
Date: August 11, 1995
By: /s/John C. Roberts
------------------
John C. Roberts
President, Chief Executive
Officer (Principal
Executive Officer)
Date: August 11, 1995 By: /s/Michael R. Ramelot
---------------------
Michael R. Ramelot
Chief Financial Officer
(Principal Financial
Officer)
9
<PAGE>
PART II - OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS
-------------------------
During the quarter there were no material developments in legal proceedings
since the report filed on Form 10K for the fiscal year ended March 31, 1995.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------
(a) Exhibits
--------
None
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended June 30,
1995.
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10 Q
JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 36
<SECURITIES> 1,291
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,422
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,297
<CURRENT-LIABILITIES> 439
<BONDS> 0
<COMMON> 5,858
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,297
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,066
<INCOME-TAX> 702
<INCOME-CONTINUING> 1,364
<DISCONTINUED> 0
<EXTRAORDINARY> 702
<CHANGES> 0
<NET-INCOME> 2,066
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
