<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
(X) Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (fee required) for the fiscal year ended March 31, 1996.
Commission File Number 0-16277
or
( ) Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange act of 1934 (no fee required)
FI LIQUIDATING COMPANY, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-2666121
-------- ----------
(State or other jurisdiction (IRS Employer
of 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 offices)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
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___
---
<PAGE>
State the aggregate market value of the voting stock held by non-affiliates of
the registrant, as of the latest practicable date.
At May 31, 1996, the approximate aggregate market value of the voting stock held
by non-affiliates of the registrant was $2,307,000 (A) based on a trade
occurring on May 22, 1996.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
At May 31, 1996, 9,271,453 shares of common stock of the Registrant were
outstanding.
(A) Excluding 3,503,170 shares of common stock held by Directors, Officers and
Stockholders whose ownership exceeded five percent of the common stock
outstanding.
2
<PAGE>
PART I
------
ITEM 1. BUSINESS
-----------------
INTRODUCTION
------------
On June 23, 1992 the stockholders of FI Liquidating Company, Inc. (the
"Company") (formerly Flextronics, Inc.) approved a plan of complete liquidation
and dissolution and a change of name. The Company filed a Certificate of
Dissolution with the Delaware Secretary of State on January 8, 1993 and is in
the process of completing the liquidation of its assets during the period
authorized by Section 278 of the Delaware General Corporation law. On December
13, 1995, the Company extended the period within which it is authorized to
liquidate until June 30, 1997.
The Company has no remaining operations. Its principal assets consist of 244,076
shares of Flextronics International Ltd., a Singapore corporation, which
provides contract electronics manufacturing services, as well as cash of
$560,602. On June 3, 1996 the Company distributed to its shareholders as a
liquidating dividend the 244,076 shares of Flextronics International Ltd.
COMPANY BACKGROUND
------------------
In 1980, the Company was founded to acquire its predecessor, which was then a
consignment manufacturer located in Northern California. During the 1980's, the
Company shifted its focus to full service turnkey manufacturing and expanded the
scope of its operations.
The Company also expanded geographically. Such expansion was accomplished in the
United States by acquisition of operations located in California, Massachusetts
and South Carolina. The Company established facilities in Singapore and Hong
Kong in 1982 and 1983, respectively, and in the Peoples' Republic of China in
1988.
Faced with significant excess capacity and operating losses, which began with
the late 1988 downturn in industries served by it and the need to fund the
Company's debts, in fiscal 1991 the Company sold a majority interest in its
Asian operations and subsequently decided to completely wind down its domestic
operations. In fiscal 1992, the Company sold its last remaining operating
assets, and, consequently, now has no direct operations. The Company continues
to liquidate its assets and settle its debts.
3
<PAGE>
RESTRUCTURING OF BUSINESS DURING THE YEAR
-----------------------------------------
Prior to fiscal 1996 the Company had closed all its operating facilities and
established reserves for the final wind up of its activities. The Company had
also negotiated settlements with substantially all of its creditors including
those creditors which held senior security interests in its assets. As a result,
at March 31, 1995 the Company's main assets consisted of 359,576 shares of
Flextronics International Ltd.
During fiscal 1996, the Company continued the process of liquidating assets and
winding up operations.
The Company sold 115,500 shares of Flextronics International Ltd. during fiscal
1996 for $2,376,594. At March 31, 1996 the Company owned a total of 244,076
shares of Flextronics International Ltd.
155,843 shares acquired by the Company upon the exercise of an option from
Flextronics International Ltd. were "restricted securities" as that term is
defined in Rule 144 under the Securities Act of 1933 (the "Act"). Consequently,
the Company could not resell in the public market any of these shares until
November 18, 1996 unless the shares were registered under the Act or an
exemption from registration became available. The 88,233 shares acquired through
cashless exchange with certain shareholders of Flextronics International Ltd.
were also "restricted securities" under the Act and the Company could not resell
these shares in the public market until February 17, 1996. The reported fair
value of Flextronics International Ltd. shares reflects discounts due to the
aforementioned restrictions as well as discounts due to the limited trading
activity of the shares. These 244,076 restricted securities were registered
under the Securities Act of 1933 effective June 3, 1996 and distributed to the
shareholders of the Company that day.
The Company has been unsuccessful in its attempts to sell the building in South
Carolina ("Assets held for sale"). The estimated recovery from the property has
been reduced to $75,000, an amount approximately equal to the unpaid property
taxes. The property is under foreclosure for delinquent taxes and is anticipated
to be auctioned in Fall 1996.
The Company is making current payments for operating expenses and, management
believes, has accumulated sufficient liquidity to effect an orderly liquidation.
The amount and timing of the final liquidating distributions to the shareholders
of the Company is dependent on the clearance of the remaining restrictions and
administrative requirements.
4
<PAGE>
CURRENT ACTIVITIES
------------------
Management is disposing of the Company's remaining assets and performing routine
tasks of administration in order to wind up the affairs of the Company. On June
3, 1996 the Company distributed to its shareholders as a liquidating dividend
the 244,076 shares of Flextronics International Ltd. it owned.
EMPLOYEES
---------
On March 31, 1996, the Company had no employees. The Company had retained a
consulting firm that has provided the part-time services of two individuals each
of whom devoted approximately 5% of his time to the affairs of the Company.
ITEM 2. PROPERTIES
--------------------
At March 31, 1996 the Company had no remaining operations. The Company is the
owner of a vacant 266,000 square foot industrial building in Great Falls, South
Carolina. The property taxes on the building are delinquent and it is
anticipated that the building will be sold at a foreclosure auction in Fall
1996.
ITEM 3. LEGAL PROCEEDINGS
---------------------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------------------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter ended March 31, 1996.
5
<PAGE>
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED
-----------------------------------------------------------
STOCKHOLDERS' MATTERS
---------------------
<TABLE>
<CAPTION>
1996 Fiscal Quarter Ended
-------------------------
<S> <C> <C> <C> <C>
Common
Prices: June 30 Sept. 30 Dec. 31 Mar. 31
------- -------- ------- -------
High $ .20 $ .94 $ .94 $ .82
Low .15 .28 .50 .57
<CAPTION>
1995 Fiscal Quarter Ended
-------------------------
<S> <C> <C> <C> <C>
June 30 Sept. 30 Dec. 31 Mar. 31
------- -------- ------- -------
High $ .15 $ .15 $ .15 $ .20
Low .063 .063 .08 .125
</TABLE>
Since January 1994 the Company has had very limited trading. Market information
is available by reference to the "NASDAQ Bulletin Board".
The number of stockholders of record for the Company's common stock as of May
31, 1996 was 272.
The Company paid a liquidating cash dividend of $.23 per share on January 4,
1996. The Company also distributed 244,076 shares of Flextronics International
Ltd. to its shareholders on June 3, 1996. A final liquidating dividend is
expected to be made after all regulatory approvals have been obtained and all
remaining obligations satisfied.
6
<PAGE>
ITEM 6 - SELECTED FINANCIAL DATA
--------------------------------
<TABLE>
<CAPTION>
(in thousands, except per share data) 1996 1995 1994 1993 1992
- ------------------------------------- ---------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
ANNUAL
Net sales $ - $ - $ - $ - $ -
Net income (loss) $ 4,058 $ 2,125 $ 11,902 $ 2,198 $ ( 2,812)
Net income (loss) per share $ .43 $ .23 $ 1.27 $ .23 $ (.30)
Total assets $ 5,923 $ 4,225 $ 3,003 $ 6,677 $ 6,884
Total liabilities $ 207 $ 433 $ 1,336 $ 20,643 $ 19,317
</TABLE>
Since the Company has ceased operations during the period and is in liquidation
the foregoing data is not comparable on a year to year basis.
7
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
- --------
As noted in Item 1, "Business - Restructuring of Business During the Year", 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 March 31, 1996 and its
operating results for the three years 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.
At March 31, 1996 its principal assets were 244,076 shares of Flextronics
International Ltd. as well as cash of $560,602.
RESULTS OF OPERATIONS
- ---------------------
Because of the restructuring and recapitalization described in the preceding
Overview, any comparison of net revenues and operating expenses for fiscal 1996
to those for fiscal 1995 and for fiscal 1995 to those for fiscal 1994 is, in the
opinion of management, not meaningful.
FISCAL YEAR 1996 COMPARED TO FISCAL YEAR 1995
- ---------------------------------------------
In fiscal 1996 realized and unrealized gain on Flextronics International Ltd. of
$3,913,000 was recognized. (See Note 3 to the financial statements.) This
reflects increasing the carrying value of the Company's remaining 244,076 shares
to their fair value at March 31, 1996 and the net gain from the sales of 115,500
shares during the year. The market close for Flextronics International Ltd.
common shares on March 31, 1996 was $30.50 and the market close on March 31,
1995 was $13.75. In fiscal 1995 realized and unrealized gain on Flextronics
International Ltd. of $1,567,000 was recognized. This reflects increasing the
carrying value of the Company's 359,576 shares held at March 31, 1995 to their
fair value and the net gain from the sales of 55,500 shares during fiscal 1995.
The market close for Flextronics International Ltd. common shares on March 31,
1995 was $13.75 and the market close on March 31, 1994 was $12.50.
8
<PAGE>
Other income of $301,000 in fiscal 1996 primarily consisted of a reversal of
provisions principally for tax claims against the Company which can no longer be
asserted of $274,000 and interest income of $87,000, net of a loss on rental
activities of $61,000. Other income of $662,000 in fiscal 1995 primarily
consisted of a reversal of provisions principally for tax claims against the
company which can no longer be asserted of $867,000 net of a reduction in the
estimated recovery on the assets held for sale of $125,000, additional net
losses on realization of receivables of $39,000, and a loss on rental activities
of $37,000.
The provision for taxes on income was $1,380,000 in fiscal 1996 versus $772,000
in fiscal 1995. The provisions are based on income before extraordinary credits
at the statutory rates and reflect the charge equivalent to tax benefits
resulting from utilization of net operating loss carryforwards.
FISCAL YEAR 1995 COMPARED TO FISCAL YEAR 1994
- ---------------------------------------------
In fiscal 1995 realized and unrealized gain on Flextronics International Ltd. of
$1,567,000 was recognized. (See Note 3 to the financial statements.) This
reflects increasing the carrying value of the Company's remaining 359,576
shares, after the exercise of the options, to their fair value at March 31, 1995
and the net gain from the sales of 55,500 shares during the year. The market
close for Flextronics International Ltd. common shares on March 31, 1995 was
$13.75 and the market close on March 31, 1994 was $12.50. In fiscal 1994
unrealized gain on Flextronics International Ltd. of $1,931,000 was recognized.
The carrying values of the 171,000 shares and options to acquire additional
266,222 shares were adjusted to their fair value at March 31, 1994. At March 31,
1994 the market close for Flextronics International Ltd. common shares was
$12.50 while at March 31, 1993 the fair value of Flextronics International Ltd.
was based on private financing.
Other income of $662,000 in fiscal 1995 primarily consisted of a reversal of
provisions principally for tax claims against the company which can no longer be
asserted of $867,000 net of a reduction in the estimated recovery on the assets
held for sale of $125,000, additional net losses on realization of receivables
of $39,000, and a loss on rental activities of $37,000. Other income of $618,000
in fiscal 1994 primarily consisted of interest income from notes receivable of
$86,000, recovery of accounts receivable previously written off of $112,000 and
a reversal of provisions principally for tax claims of $403,000 which can no
longer be asserted.
There was no interest expense in fiscal 1995 compared to $457,000 in fiscal
1994. Substantially all interest bearing debt was settled and discharged in June
1993.
9
<PAGE>
The provision for taxes on income was $772,000 in fiscal 1995 versus $667,000 in
fiscal 1994. The provisions are based on income before extraordinary credits at
the statutory rates and reflect the charge equivalent to tax benefits resulting
from utilization of net operating loss carryforwards.
CAPITAL RESOURCES AND LIQUIDITY
- -------------------------------
For fiscal 1996 cash increased by $551,000 as compared to decreases of $35,000
in 1995 and $473,000 in 1994. Cash outflows from operating activities during the
period primarily relate to the costs of closing down the operations and
liquidating the assets. The cash outflow from financing activities reflects the
first liquidating cash dividend of $.23 per share in fiscal 1996 and payments in
final settlement of debts in fiscal 1994.
The Company's balance sheet at March 31, 1996 shows a shareholders' equity of
$5,716,000. The Flextronics International Ltd. shares owned by the Company are
carried on the financial statements at $5,262,000 which is its fair value based
on the closing market price on NASDAQ on March 31, 1996 of $30.50 per share
reduced for the significant restrictions on transfer. (See Note 3 to financial
statements.) These shares were distributed as a liquidating dividend to the
shareholders of the Company on June 3, 1996.
The Company is making current payments for expenses related to its liquidation
and administration. The Company has cash at March 31, 1996 of $561,000. Such
amount should be sufficient to complete an orderly liquidation.
The timing for the Company to complete the liquidation is dependent upon its
ability to obtain the necessary regulatory clearances and on the disposition of
assets. The amount of the liquidating distribution is primarily dependent on the
Company's ability to dispose of its remaining assets and obligations.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
In order to obtain audited financial statements for the fiscal years ended March
31, 1996, 1995 and 1994 the Company would be required to expend a very
substantial sum in relation to the Company's resources. The quotes previously
received were very significant. In view of the Company's dissolution, the
Company believes that obtaining such audits would involve unreasonable effort
and expense and that it is not reasonably available to the Company. Accordingly,
the Consolidated Financial Statements are not audited. The Company believes that
the statements have been prepared in accordance with generally accepted
accounting principles on a liquidating basis. For further information about the
Company's method of accounting see Notes 1, 2 and 3.
10
<PAGE>
<TABLE>
<CAPTION>
Index to Consolidated Financial Statements
- ------------------------------------------
Page
----
<S> <C>
Consolidated Balance Sheet 12
Consolidated Statement of Operations 13
Consolidated Statement of Stockholders' Net
Capital Deficiency 14
Consolidated Statement of Cash Flows 15
Notes to Consolidated Financial Statements 16-19
</TABLE>
11
<PAGE>
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION> March 31,
(in thousands, except per share amounts) 1996 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash $ 561 $ 10
Marketable securities - 395
Prepaid expenses and other 25 20
Assets held for sale 75 75
------ ------
Total current assets 661 500
Investment in Flextronics International Ltd. 5,262 3,725
------ ------
$ 5,923 $ 4,225
====== ======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 6 $ 21
Other accrued liabilities 201 412
------ ------
Total current liabilities 207 433
Commitments and contingency
Stockholders equity:
Preferred stock, $.01 par value; 10,000 shares authorized
Common Stock, $.01 par value; 25,000 shares authorized;
9,281 shares issued and outstanding in both 1995 and 1994 93 93
Additional paid-in capital 29,748 29,748
Accumulated deficit (24,125) (26,049)
------ ------
Stockholders' equity 5,716 3,792
------ ------
$ 5,923 $ 4,225
====== ======
</TABLE>
See accompanying notes.
12
<PAGE>
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Years Ended March 31,
(in thousands, except per share amounts) 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ - $ - $ -
Costs and expenses:
Cost of sales - - -
General and administrative 156 104 134
------ ------ ------
Loss from operations ( 156) ( 104) ( 134)
Realized and unrealized gain on Flextronics International Ltd.:
Net realized gain 1,525 642 -
Change in unrealized appreciation 2,388 925 1,931
Other income, net 301 662 618
Interest expense - - ( 457)
------ ------ ------
Income before provision for taxes and
extraordinary credits 4,058 2,125 1,958
Provision for taxes on income 1,380 722 667
------ ------ -------
Net income before extraordinary credits 2,678 1,403 1,291
Extraordinary credits:
Gain on debt settlement - - 9,944
Utilization of net operating loss carryforward 1,380 722 667
------ ------ -------
Net income $4,058 $2,125 $11,902
====== ====== =======
Net income per share:
Income before extraordinary credits $ .28 $ .15 $ .14
Extraordinary credits .15 .08 1.13
------ ------ ------
Net income per share $ .43 $ .23 $ 1.27
====== ====== ======
Shares used in computing per share amounts 9,338 9,391 9,396
====== ====== ======
</TABLE>
See accompanying notes.
13
<PAGE>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)
(Unaudited)
<TABLE>
<CAPTION>
Stockholders'
Additional Equity
Common Stock Paid-in Accumulated (Net Capital
------------
(in thousands) Shares Amount Capital Deficit Deficiency)
- -------------- ------------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Balances, March 31, 1993 9,281 93 29,748 (40,076) (10,235)
Net income - - - 11,902 11,902
----- ----- ------ ------ ------
Balances, March 31, 1994 9,281 93 29,748 (28,174) 1,667
Net income - - - 2,125 2,125
----- ----- ------ ------ ------
Balances, March 31, 1995 9,281 93 29,748 (26,049) 3,792
Net income - - - 4,058 4,058
Cash dividend - January 4, 1996 - - - ( 2,134) ( 2,134)
----- ----- ------ ------ ------
Balances, March 31, 1996 9,281 $ 93 $29,748 $(24,125) $ 5,716
===== ===== ====== ====== ======
</TABLE>
See accompanying notes.
14
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Years Ended March 31,
(in thousands) 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating activities:
Net income $ 4,058 $ 2,125 $ 11,902
Adjustments to reconcile net income to
net cash used for operating activities:
Gain on debt settlements - - ( 9,944)
Realized and unrealized appreciation in Flextronics
International Ltd. ( 3,913) (1,567) ( 1,931)
Changes in operating assets and liabilities, net of
effects of dispositions:
Marketable securities 395 ( 395) -
Accounts and notes receivable - 308 14
Prepaid expenses and other assets ( 5) 125 200
Accounts payable, accrued restructuring
and other liabilities ( 226) ( 903) ( 321)
------ ----- ------
Net cash provided by (used for) operating activities 309 ( 307) ( 80)
Investing activities:
Proceeds from sales of shares of Flextronics
International Ltd. 2,376 772 -
Exercise of option from Flextronics International Ltd. - ( 500) -
------ ----- ------
Net cash provided by investing activities 2,376 272 -
Financing activities:
Payments on long-term debt and capital lease obligations ( - ) ( - ) ( 393)
Payment of liquidating cash dividend ( 2,134) - -
------ ----- ------
Net cash used for financing activities ( 2,134) ( - ) ( 393)
------ ----- ------
Increase (decrease) in cash and cash equivalents 551 ( 35) ( 473)
Cash and cash equivalents at beginning of year 10 45 518
------ ----- ------
Cash and cash equivalents at end of year $ 561 $ 10 $ 45
====== ===== ======
</TABLE>
See accompanying notes.
15
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)
1. BASIS OF PRESENTATION:
The accompanying financial statements as of March 31, 1996 and March 31, 1995
and for the three years ended March 31, 1996 have been prepared on a liquidating
basis of accounting with assets and liabilities stated at fair value. The
Company has wound down and sold all its operations and is continuing to
implement the formal plan of liquidation approved by the Shareholders in June
1992.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION. The accompanying consolidated financial statements
include the accounts of FI Liquidating Company, Inc. and its wholly-owned
subsidiaries for all periods presented after elimination of all significant
intercompany balances and transactions.
ASSETS HELD FOR SALE. Assets held for sale represent the net realizable value
of property which management expects to dispose of in fiscal 1997. Accordingly,
the amount is classified as a current asset.
INVESTMENT IN FLEXTRONICS INTERNATIONAL LTD. At March 31, 1996, 1995 and 1994,
the Company's interest in Flextronics International Ltd. was adjusted to reflect
fair value. (See Note 4.)
NET INCOME PER SHARE. Net income per share is computed based on the weighted
average number of common shares and dilutive common stock equivalents.
CONCENTRATIONS OF CREDIT RISK. Financial instruments which potentially subject
the Company to concentrations of credit risk consist of the investment in
Flextronics International Ltd.
3. INVESTMENT IN FLEXTRONICS INTERNATIONAL LTD.
Prior to fiscal 1994, the Company consummated the recapitalization and sale of a
portion of its Asian operations. The Company retained ownership of
approximately 44% and reported the investment at its fair value.
16
<PAGE>
Following a settlement with the holders of the Company's senior notes in
fiscal 1994 (see Note 5), the Company retained the present equivalent of 171,000
shares in Flextronics International Ltd. In addition, the Company obtained an
option from Flextronics International Ltd. to purchase the present equivalent of
155,843 of its shares at an exercise price of $3.21 per share, as well as an
option from certain shareholders of Flextronics International Ltd. to acquire
the present equivalent of 110,379 of its shares at an exercise price of $3.16
per share. Flextronics International Ltd. filed a registration statement with
the Securities and Exchange Commission covering the sale of up to 3,162,500
shares. The registration became effective on March 22, 1994 and 2,500,000
shares were issued at an initial public offering price of $14.00 per share.
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 fiscal 1996, the
Company sold 115,500 shares of Flextronics International Ltd. for $2,376,594.
The 88,233 shares acquired by the Company for the option from shareholders of
Flextronics International Ltd. and the 155,843 shares acquired from Flextronics
International Ltd. were "restricted securities" as that term is defined in Rule
144 under the Securities Act of 1933 (the "Act") and could not be resold until
February 17, 1997 and November 18, 1996, respectively, unless the shares were
registered under the Act or an exemption from registration became available. At
March 31, 1996 the closing price for Flextronics International Ltd. as reported
on NASDAQ was $30.50 per share. At March 31, 1996 the shares which the Company
could not resell under Rule 144 until February 17, 1997 and November 18, 1996
reflect discounts of 34% and 27%, respectively, from the closing price reported
on the NASDAQ National Market System due to aforementioned restrictions on
transfer. These 244,076 restricted securities were registered under the
Securities Act of 1933 effective June 3, 1996 and distributed as a liquidating
dividend to the shareholders of the Company that day.
4. STOCKHOLDERS' EQUITY
STOCK OPTION PLANS. The Company has a 1982 Non-Qualified Stock Option Plan and
has reserved a total of 2,445,000 shares of common stock for issuance under the
Plan. Under the Non-Qualified Plan, key employees and others may be granted
options to purchase the Company's authorized but unissued common stock at fair
market value on the date of grant. Options become exercisable over varying
periods and expire no later than ten years and two days after the date of the
grant. No options remain outstanding under the Plan,
17
<PAGE>
and the Company does not anticipate issuing any options. At March 1996, 1995
and 1994 no options were outstanding and 2,003,000 shares were available for
grant.
STOCK PURCHASE WARRANTS. During fiscal year 1990, the Company issued to a bank
warrants to purchase 30,000 shares of the Company's common stock at $.75 per
share, which warrants expire in the year 2000. In May 1996 the Company
purchased the warrants for $13,875.
5. GAIN ON DEBT SETTLEMENT
At March 31, 1993, the Company's Senior Notes were secured by substantially all
the Company's assets. The Company was in payment default as well as not being
in compliance with certain financial covenants. The Senior Note holders had not
agreed to any alternative arrangements and had issued a demand and acceleration
notice to the Company. The Company was also in payment default on its
arrangements with substantially all other creditors.
In order to make satisfactory arrangements with its creditors and avoid seeking
protection under the provisions of the bankruptcy laws, on June 30, 1993 the
Company reached settlements with the holder of the Senior Notes and most of its
other unsecured creditors.
The holder of the Senior Notes discharged all debt from the Company, including
accrued interest, in exchange for the transfer of the Company's interests in
Flextronics International Ltd. except for 171,000 shares which the Company
retained, and, as part of the settlement, the Company obtained options to
acquire additional shares of Flextronics International Ltd. (See Note 3.)
Cash payments of $369,000 were made by the Company on June 30, 1993 in complete
settlement of other unsecured credit obligations totalling $3,659,000 plus
accrued interest. Subsequently in fiscal 1994, the Company reached settlements
with certain other creditors by paying $24,000 in settlement of obligations
totalling $74,000 plus accrued interest.
6. RESTRUCTURING ACTIVITIES
RESTRUCTURING. Prior to fiscal 1994, the Company had closed or sold all its
operations and restructuring reserves were established for all remaining closure
costs. Disposal costs have been charged against restructuring reserves during
fiscal 1996, 1995 and 1994.
18
<PAGE>
7. PROVISIONS FOR DOUBTFUL ACCOUNTS
Provisions for doubtful accounts were approximately $39,000 1995. No additional
provision was made in fiscal 1996 of fiscal 1994.
8. TAXES ON INCOME
The provision for taxes on income consists of the following:
<TABLE>
<CAPTION>
(in thousands) Year ended March 31,
- -------------- --------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Charge equivalent to the
benefit resulting from the
utilization of net operating
loss carryforward $1,380 $722 $667
===== === ===
</TABLE>
The provision for taxes on income is computed by applying the statutory federal
income tax rate to income before provision for taxes on income in each year.
For federal income tax purposes, the Company has available approximately
$157,000 of investment tax credit carryforwards expiring in 1997 through 2000,
and approximately $343,000 of other tax credit carryforwards expiring in 1997
through 1998. Also, for federal tax purposes, the Company has net operating loss
carryforwards of approximately $12,891,000 and capital loss carryforwards of
approximately $4,227,000 expiring in 1997 through 2005.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
---------------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
No accountants have been retained during the period covered by this Annual
Report.
19
<PAGE>
PART III
---------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------
NON-DIRECTOR EXECUTIVE OFFICERS
- -------------------------------
Information concerning executive officers of the Company at March 31, 1996 who
were not also Directors, is set forth below:
Mr. John C. Roberts, age 57, joined the Company as President in March 1991. In
June 1992 he was appointed Chief Executive Officer. He is a partner in
Management Resource Partners, a professional management firm engaged by the
Company in October 1990. From 1978 to March 1991, he served as a consultant to
numerous entities and individuals. Concurrently, from 1980 to the present he
has been Managing General Partner of Centennial Petroleum Company.
Mr. Michael R. Ramelot, age 51, joined the Company as Chief Financial Officer in
March 1991. He is a partner in Management Resource Partners, a professional
management firm engaged by the Company in October 1990. From 1988 to March 1991
he served as consultant with numerous companies. From 1980 to 1988, he served
in various management functions for Dynatech Computer Systems, the most recent
being Chief Operating Officer.
Themistocles G. Michos, age 64, has served as Secretary of the Company since
1984. Mr. Michos has been a partner in the law firm of Collette & Erickson
since 1976. Collette & Erickson has served as general legal counsel to the
Company since March 1980.
DIRECTORS
- ---------
The names of the Directors at March 31, 1996, together with their ages, tenure,
positions and offices held by each with the Company and the number of shares of
Common Stock of the Company beneficially owned by each of them at May 31, 1996
are indicated in the following table.
<TABLE>
<CAPTION>
Shares of Percentage
Common Stock of Shares
Position and Beneficially of Common
Officers with Director Owned as of Stock as of
Company Age Since May 31, 1996 May 31, 1996
- ------------- --- -------- ------------ ------------
<S> <C> <C> <C> <C>
Robert G. Todd, Jr. 48 1980 2,050,833 (1) 22.10%
Director
Joseph E. Sullivan 53 1980 567,387 6.11%
Director
</TABLE>
(1) Includes 280,000 shares held by two trusts of which two of Mr. Todd's
children are beneficiaries.
20
<PAGE>
Robert G. Todd, Jr. has served as a Director since April 1980. He served as
Chairman of the Board from April 1980 and as Chief Executive Officer of the
Company from March 1984 until he resigned from both positions June 18, 1990 to
become Chief Executive Officer of Flextronics International Ltd. He also served
as the Company's Secretary from 1980 to 1984; as the Company's Chief Financial
Officer from 1984 to 1987; and as the Company's President from March 1984 to
July 1989. In May 1991, Mr. Todd resigned as Chief Executive Officer of
Flextronics International Ltd. but continued as Chairman of the Board of
Flextronics International Ltd. until June 30, 1993. Mr. Todd currently is
President and Chief Executive Officer of Computer Aided Services, Inc., a
privately held company that provides computer diagnostic systems to the
automobile service industry.
Joseph E. Sullivan has served as a Director of the Company since April 1980 and
as Chairman of the Board and Chief Executive Officer from June 18, 1990 to June
25, 1992. He served as President of the Company from 1980 to 1984 and as Senior
Vice President and Chief Sales and Marketing Officer of the Company from 1980
through March 1986. He is now a consultant to private companies. Effective
June 18, 1990, Mr. Sullivan also became Chairman of the Board of Flextronics
International Ltd. In April 1991, he resigned as Chairman of the Board of
Flextronics International Ltd., but continued as a Director of that company
until June 30, 1993.
Directors were paid a retainer of $1,000 monthly and any out-of-pocket travel
expenses incurred in connection with attendance at meetings of the Board of
Directors.
21
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
--------------------------------
The following table sets forth the cash compensation paid by the Company to each
of its executive officers, and to all executive officers as a group, for
services rendered in their capacities as executive officers during the fiscal
year ended March 31, 1995:
<TABLE>
<CAPTION>
Principal Cash Compensation (1)
Individual Capacities Regular
or Persons In Which ---------------------------
in Group Served 1996(2) 1995(2) 1994(2)
- ---------- ---------- ---- ---- ----
<S> <C> <C> <C> <C>
John C. Roberts President $ None $ None $ None
Michael R. Ramelot Chief
Financial
Officer $ None $ None $ None
All executive
officers as a group
(1996 - 1994 - $ None $ None $ None
2 persons)
</TABLE>
(1) The Company has no pension, retirement, annuity, savings or similar
benefit plan. No officer received other compensation in excess of the
lesser of $25,000 or 10% of such officer's cash compensation, and all
executive officers as a group did not receive other compensation in
excess of the lesser of $50,000 or 10% of the aggregate compensation
of the group.
(2) From and after July 1, 1992, Messrs. Roberts and Ramelot were no
longer compensated directly by the Company. Instead, Management
Resource Partners, a partnership in which Messrs. Roberts and Ramelot
are each general partners, was compensated on a per diem basis as
services were provided by Messrs. Roberts and Ramelot. Amounts paid
to Management Resource Partners are not included in the table but are
set forth under Item 13, Certain Transactions, below.
22
<PAGE>
ITEM 12. PRINCIPAL STOCKHOLDERS
--------------------------------
The following table provides certain information as of May 31, 1996 as to each
person who, to the Company's knowledge, beneficially owns more than 5% of the
outstanding shares of the Company's Common Stock and by all officers and
directors as a group:
<TABLE>
<CAPTION>
Name and Principal
Business Address of Number of Percent of
Beneficial owner Shares owned Class
------------------- ------------ ----------
<S> <C> <C>
Robert G. Todd, Jr.(1)............ 2,050,833 22.10%
c/o FI Liquidating Company, Inc.
3753 Howard Hughes Parkway, Suite 200
Las Vegas, NV 89109
S&M Machine Service, Inc.......... 884,950 (2) 9.53%
and related individuals
206 E. Highland Drive
Oconto Falls, WI 54154-1003
Joseph E. Sullivan................ 567,387 6.11%
c/o FI Liquidating Company, Inc.
3753 Howard Hughes Parkway, Suite 200
Las Vegas, NV 89109
Officers and Directors as
of May 31, 1996 as a group
(4 persons) (1)................... 2,618,220 28.21%
</TABLE>
(1) See footnote 1 to table under "Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT".
(2) S&M Machine Service, Inc. owned by the Griner Family owns 631,000 shares;
Frank W. Griner, Sr. and Lorrein Griner own 175,600 shares; Lorrein Griner
owns 23,000 shares; Frank W. Griner, Jr. owns 24,500 shares; Frank W.
Griner, III owns 13,250 shares; William R. Griner owns 6,700 shares; Anne
Griner owns 3,300 shares; Sarah Griner owns 5,900 shares; and Lewis Griner
owns 1,700 shares.
23
<PAGE>
ITEM 13. CERTAIN TRANSACTIONS
------------------------------
John C. Roberts, the Company's President, and Michael R. Ramelot, the Company's
Chief Financial Officer, are general partners in the management consulting firm
of Management Resource Partners. In November, 1990 the Company entered into a
management consulting agreement with Management Resource Partners to provide
financial and strategic services and interim management support to the Company.
Effective March 1, 1991, the terms of the consulting agreement were terminated
and the Company hired Messrs. Roberts and Ramelot. At the same time, the
Company issued to Management Resource Partners a warrant to purchase 80,000
shares of the Company's Common Stock at an exercise price of $0.3750 per share.
On June 20, 1995 this warrant was canceled and a bonus arrangement was entered
into with Management Resource Partners. In May, 1991 the Company entered into
an arrangement with Management Resource Partners whereby it would provide office
space and administrative services to the Company. Effective July 1, 1992 the
employment agreements with Messrs. Roberts and Ramelot were terminated and
amounts paid for their services began, instead, to be paid to Management
Resource Partners. Management Resource Partners was paid $49,500 by the Company
for contract officers' services, office space and administrative services
provided during fiscal 1996.
24
<PAGE>
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
-----------------------------------------------------
REPORTS ON FORM 8-K
-------------------
(a) 1. Financial Statements
--------------------
The financial statements listed in the accompanying index to financial
statements and financial statement schedules are filed as part of this
Annual Report on Form 10-K.
2. Financial Statement Schedules
-----------------------------
The financial statement schedules listed in the accompanying index to
financial statements and financial statement schedules are filed as
part of this Annual Report on Form 10-K.
3. Exhibits
--------
The exhibits listed in the accompanying Exhibit Index on pages 30-32
are filed or incorporated by reference as part of this Annual Report
on Form 10-K.
(b) Reports on Form 8-K
-------------------
The Company did not file any reports on Form 8-K during the fourth
quarter, which ended on March 31, 1996.
25
<PAGE>
FI LIQUIDATING COMPANY, INC.
----------------------------
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
---------------------------------------------------------------
(ITEM 14(A) (1) AND (2))
<TABLE>
<CAPTION>
Reference Page
--------------
<S> <C>
FI Liquidating Company, Inc. (filed in Part II,
Item 8 of this report on Form 10-K):
Consolidated Balance Sheet at March 31, 12
31, 1996 and 1995
Consolidated Statement of Operations 13
for each of the three years in the
period ended March 31, 1996
Consolidated Statement of Stockholders 14
Equity (Net Capital Deficiency) for
each of the three years in the period
ended March 31, 1996
Consolidated Statement of Cash Flows 15
for each of the three years in the
period ended March 31, 1996
Notes to Consolidated Financial Statements 16-19
Schedules for each of the three years in
the period ended March 31, 1996:
VIII Valuation and qualifying accounts 27
</TABLE>
All other schedules have been omitted because they are not applicable or
submission of the schedules is not required, or because the information required
is included in the financial statements or notes thereto.
26
<PAGE>
FI LIQUIDATING COMPANY, INC.
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
<TABLE>
<CAPTION>
Balance at Charged to Deductions Balance
Beginning Costs and and at End
Description of Period Expenses Write-offs of Year
- ------------- ---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
Allowance for doubtful accounts
1994 $ 779 $ - $ 207 $ 572
1995 $ 572 $ 39 $ 611 $ -
1996 $ - $ - $ - $ -
</TABLE>
27
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 of 15(d) 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.
Date: June 28, 1996 By: /s/Michael R. Ramelot
------------------------
Michael R. Ramelot
Chief Financial Officer
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John C. Roberts and Michael R. Ramelot,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
report on Form 10-K, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
28
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons in the capacities and on the
dates indicated.
Signature Title Date
- --------- ----- ----
/s/John C. Roberts President, Chief Executive June 28, 1996
- ---------------------
(John C. Roberts) Officer (Principal Executive
Officer)
/s/Michael R. Ramelot Chief Financial Officer June 28, 1996
- ---------------------
(Michael R. Ramelot) (Principal Financial
Officer)
/s/Joseph E. Sullivan Director June 28, 1996
- ---------------------
(Joseph E. Sullivan)
/s/Robert G. Todd, Jr. Director June 28, 1996
- ----------------------
(Robert G. Todd, Jr.)
29
<PAGE>
FI LIQUIDATING COMPANY, INC.
----------------------------
EXHIBIT INDEX
-------------
(ITEM 14(A)(3))
Exhibit
Number Description
- ------ -----------
2.0(5) Plan of Complete Liquidation and Dissolution.
3.0(3) Amendment to the By-laws of the Company.
3.1(1) Certificate of Incorporation of the Company, as amended.
3.2(1) By-Laws of the Company, as amended and restated.
3.3(2) Amendment to the By-laws of the Company.
3.4(3) Amendment to the By-laws of the Company.
3.5(6) Certificate of Amendment to Certificate of Incorporation to
change the name of the Registrant as filed with Delaware
Secretary of State on June 24, 1992.
3.6(7) Certificate of Dissolution of the Registrant as filed with the
Delaware Secretary of State on January 1, 1993.
4.1(3) Warrant Purchase Agreement, between the Company and The First
National Bank of Boston dated as of March 1, 1990, pursuant to
which the First National Bank of Boston acquired warrants to
purchase 30,000 shares of common stock.
4.2(4) Warrant Purchase Agreement dated as of February 28, 1991 between
the Company and Management Resource Partners, pursuant to which
Management Resource Partners acquired warrants to purchase 80,000
shares of common stock.
10.1(1) The Company's 1982 Non-Qualified Stock Option Plan, as amended,
and related form of non-qualified stock option agreement.
10.2(1) Purchase Agreement dated July 11, 1983 relating to the sale by
the Company of 650,000 shares of Series A Preferred Stock (now
Class A Redeemable Common Stock).
30
<PAGE>
10.3(1) Purchase Agreement dated January 20, 1984 relating to the sale by
the Company of 1,301,675 shares of Series B Preferred Stock and
the sale by Robert G. Todd, Jr., Joseph E. Sullivan and Jack L.
Watts of 185,961 shares of Common Stock.
10.4(1) Series C Preferred Stock Purchase Agreement dated October 18,
1984 relating to the sale by the Company of 521,739 shares of
Series C Preferred Stock.
10.5(1) Form of Indemnification Agreement between the Company and its
officers and directors.
10.6(2) Third amendment to the Company's 1982 Incentive Stock Option Plan
and the sixth amendment to the Company's 1982 Non-Qualified Stock
Option Plan.
10.7(7) Waiver and Consent to Foreclosure among the Registrant, certain
subsidiaries of the Registrant and CLG Partners, L.P., dated as
of June 30, 1993.
10.8(7) Option Agreement between the Registrant and CLG Partners, L.P.,
dated as of June 30, 1993.
10.9(7) Acquisition and Subscription Agreement among the Registrant, CLG
Partners, L.P., Flex Holdings Pte. Ltd. and certain other
investors dated as of June 30, 1993.
10.10(7) Shareholders Agreement among the Registrant, CLG Partners, L.P.,
Flex Holdings Pte. Ltd. and certain other investors dated as of
July 8, 1993.
10.11(7) Registration Rights Agreement among the Registrant, CLG Partners,
L.P., Flex Holdings Pte. Ltd. and certain other investors dated
as of July 8, 1993.
10.12(7) Option Agreement between the Registrant and Flex Holdings Pte.
Ltd. dated as of July 8, 1993
10.13(7) Form of Settlement Agreement and Mutual Release of Claims entered
into between the Registrant and certain of its unsecured
creditors.
10.14(8) Lock-Up Agreement for Initial Public Offering of Flextronics
International Pte. Ltd. between the Registrant and Montgomery
Securities and Cowen & Company of January 24, 1994.
10.15(8) Waiver of Registration Rights among the Registrant and Flex
Holdings Pte. Limited as of January 24, 1994.
31
<PAGE>
10.16(8) Amendment to Option Agreement between the Registrant and Flex
Holdings Pte. Limited dated as of February 18, 1994.
10.17(9) Amendment to Option Agreement between the Registrant and CLG
Partners, L.P. dated as of September 18, 1994.
10.18(10) Bonus Agreement by and between the Registrant and Management
Resource Partners dated as of July 20, 1995.
21 Subsidiaries of Registrant.
Footnotes to Exhibits
---------------------
(1) Incorporated by reference to exhibits to Registration Statement on Form S-
1, No. 33-16365.
(2) Incorporated by reference to exhibits to 1989 10-K Annual Report filed on
June 26, 1989.
(3) Incorporated by reference to exhibits to 1990 10-K Annual Report filed on
July 14, 1990.
(4) Incorporated by reference to exhibits to 1991 10-K Annual Report filed on
July 11, 1991.
(5) Incorporated by reference to Registrant's Proxy Statement date May 14, 1992
as filed on May 15, 1992.
(6) Incorporated by reference to exhibits to 1992 10-K Annual Report filed on
December 22, 1992.
(7) Incorporated by reference to exhibits to 1993 10-K Annual Report filed on
August 16, 1993.
(8) Incorporated by reference to exhibits to 1994 10-K Annual Report filed on
June 29, 1994.
(9) Incorporated by reference to exhibits to September 30, 1994 10-Q Quarterly
Report filed on November 14, 1994.
(10) Incorporated by reference to exhibits to September 30, 1995 10-Q Quarterly
Report filed on November 14, 1995.
32
<PAGE>
EXHIBIT 21
FI LIQUIDATING COMPANY, INC.
(FORMERLY FLEXTRONICS, INC.)
SUBSIDIARIES OF REGISTRANT
--------------------------
Jurisdiction
Name of of
Subsidiary Incorporation
---------- -------------
Flextronics California, Inc. California
Flextronics Southeast, Inc. South Carolina (1)
Flextronics Manufacturing, Inc. California (2)
(formerly Flextronics International, Inc.)
Flextronics Massachusetts, Inc. Massachusetts (2)
C.G. Industries California (2)
J.T.E. Graphics, Inc. California (2)
ETC Flextronics, Inc. California (2)
S.R.L., Inc. California (2)
All subsidiary shares are held of record by either FI Liquidating Company, Inc.,
or Portola Industries, Inc. (now FI Liquidating Company, Inc.).
(1) Charter was dissolved on April 3, 1996.
(2) Secretary of State has suspended activities.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM "FORM 10-K MARCH 31,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 561
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 661
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,923
<CURRENT-LIABILITIES> 207
<BONDS> 0
0
0
<COMMON> 5,716
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,923
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,058
<INCOME-TAX> 1,380
<INCOME-CONTINUING> 2,678
<DISCONTINUED> 0
<EXTRAORDINARY> 1,380
<CHANGES> 0
<NET-INCOME> 4,058
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
