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 QUARTER BY PERIOD ENDED APRIL 30, 1996
COMMISSION FILE NUMBER 33-17286
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LIFSCHULTZ INDUSTRIES, INC.
(Exact name of small business as specified in its charter)
State or other jurisdiction of incorporation or organization
DELAWARE
I.R.S. employer identification no. 87-0448118
Address of principal executive offices
641 West 59th Street, New York, NY 10019
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Registrant's telephone number, including area code: (212) 397-7788
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Former name, former address and former fiscal year, if changed since
last report.
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Check whether the issuer (1) 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 issuer was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
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State the number of shares outstanding of each of the issuer's classes
of common stock, as of January 31, 1996, the most recent date for which
figures are available.
Class Outstanding at April 30, 1996
- ---------------- -----------------------------
Common Stock 36,541,229
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I N D E X
Page
PART I. FINANCIAL INFORMATION Number
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Item 1. Financial Statements.
Consolidated Balance Sheet - April 30,
1996 and July 31, 1995 . . . . . . . . . . . 2
Consolidated Statement of Operations
for Three Months ended April 30,
1996 and April 30, 1995; Nine Months
ended April 30, 1996 and April 30, 1995 . . . 4
Consolidated Statements of Cash Flows -
Nine Months Ended April 30, 1996 and
April 30, 1995 . . . . . . . . . . . . . . . 5
Notes To Consolidated Financial
Statements . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations
Results of Operations . . . . . . . . . . . . 7
Financial Condition and Liquidity. . . . . . 8
PART II. OTHER INFORMATION. . . . . . . . . . . . . . 8
Item 1. Legal Proceedings
Item 2. Changes In Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of
Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 9
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LIFSCHULTZ INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
30-Apr-96 31-Jul-95
----------- -----------
ASSETS
Current Assets
Cash and cash equivalents $1,682,000 $1,139,000
Trade accounts receivable 1,747,000 1,669,000
Inventories 1,357,000 1,085,000
Other current assets 84,000 124,000
Total current assets ----------- -----------
4,870,000 4,017,000
Property held for sale or lease, net 2,966,000 3,319,000
Property & equipment, net 525,000 496,000
----------- -----------
Total Assets $8,361,000 $7,832,000
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Liabilities:
Note payable to a bank $ 200,000 $ 150,000
Trade accounts payable 763,000 312,000
Accrued liabilities 781,000 994,000
Notes payable to shareholders 50,000 50,000
Accounts payable and accrued liabilities
past due 243,000 2,088,000
Current portion of long-term debt 20,000 32,000
----------- -----------
Total current liabilities 2,057,000 3,626,000
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LIFSCHULTZ INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(unaudited)
30-Apr-96 31-Jul-95
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY (continued)
Long-term debt, less current portion 12,000 26,000
Shareholders' equity:
Convertible preferred stock, par value
$.01; authorized 4,900,000 shares
Series A; issued and outstanding
5,200 shares - -
Series B; issued and outstanding
1,004,215 shares 10,000 10,000
Series E; issued and outstanding
512,596 shares 6,000 6,000
(Note 1)
Common stock, par value $.001;authorized
80,000,000 shares; issued and
outstanding, 36,541,229 shares 36,000 36,000
Additional paid-in capital 10,978,000 10,938,000
Common stock subscriptions receivable
from related parties (15,000) (15,000)
Treasury Stock (at cost) (157,000) (157,000)
Retained (deficit) (4,566,000) (6,638,000)
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Total shareholders' equity 6,292,000 4,180,000
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Total liabilities and shareholders'
equity $8,361,000 $7,832,000
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LIFSCHULTZ INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) (unaudited)
Three months ended Nine months ended
30-Apr-96 30-Apr-95 30-Apr-96 30-Apr-95
----------- ----------- ----------- -----------
REVENUES:
Sales $2,948,000 $2,487,000 $8,279,000 $7,011,000
COSTS AND EXPENSES:
Cost of products
sold 1,379,000 1,325,000 4,063,000 3,737,000
Selling, general
and admin. 1,191,000 991,000 3,059,000 2,446,000
Research and
development 84,000 85,000 208,000 202,000
Interest Expense 24,000 (40,000) 39,000 69,000
---------- ----------- ---------- ----------
Total costs
and expenses 2,678,000 2,361,000 7,369,000 6,454,000
Income before income
taxes and extraor-
dinary item 270,000 126,000 910,000 557,000
Income Taxes 45,000 8,000 117,000 61,000
---------- ----------- ---------- ----------
Income before extraor-
dinary item 225,000 118,000 793,000 496,000
EXTRAORDINARY ITEM
Forgiveness of Debt,
net of tax effect 217,000 - 1,279,000 -
Net Income $ 442,000 $ 118,000 $2,072,000 $ 496,000
========== =========== ========== ==========
NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE:
Income before
extraordinary item 0.004 0.002 0.013 0.008
Extraordinary item 0.003 - 0.021 -
---------- ------------ ----------- -----------
$ 0.007 $ 0.002 $ 0.034 $ 0.008
========== ============ =========== ===========
Common Shares
Outstanding 57,240,000 58,630,000 57,240,000 58,630,000
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LIFSCHULTZ INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six months ended
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30-Apr-96 30-Apr-95
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OPERATING ACTIVITIES
Net income $2,072,000 $ 360,000
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 408,000 255,000
Gain on debt Forgiveness
(extraordinary item (1,279,000) -
Changes in assets and liabilities:
Trade Accounts receivable (78,000) (586,000)
Inventories (272,000) (172,000)
Other assets 40,000 (24,000)
Accounts payable (115,000) (25,000)
Accrued liabilities (213,000) 35,000
Net cash provided (used) by operating ----------- -----------
activities 563,000 (157,000)
INVESTING ACTIVITIES
Purchase of Property and Equipment (A) (84,000) (50,000)
----------- ----------
Net cash provided (used) by investing
activities (84,000) (50,000)
FINANCING ACTIVITIES
Proceeds from notes payable and long-term
obligations 50,000 200,000
Proceeds from notes payable to shareholders 0 0
Principal payments of notes payable and
long-term obligations (26,000) (750,000)
Proceeds from sale of equity securities 40,000 799,000
----------- -----------
Net cash provided (used) by financing
activities 64,000 249,000
Net increase (decrease) in cash 543,000 42,000
Cash and cash equivalents at beginning
of period 1,139,000 931,000
----------- -----------
Cash and cash equivalents at end of
period $1,682,000 $ 973,000
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(A) Net of Disposals
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NOTES TO FINANCIAL STATEMENTS
NOTE 1- ACCOUNTING POLICIES
In February 1992 the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 109 "Accounting
for Income Taxes," which is effective for fiscal years beginning after
December 15, 1992. Accordingly, the Company has implemented Statement
109 in the accompanying financial statements, without effect on reported
income.
NOTE 2- EARNINGS PER SHARE
Earnings per common and common equivalent shares for April 30, 1996 and
1995 is based on the weighted average number of common shares actually
outstanding during the period plus the shares that would be outstanding
assuming conversion of convertible preferred stock and exercise of stock
options and warrants, all of which are common stock equivalents. For
comparative purposes, the reported equivalent common shares outstanding
at 4/30/95 were recalculated to include diluting outstanding warrants
and options.
DISCUSSION AND ANALYSIS OF FINANCIAL
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CONDITION AND RESULTS OF OPERATIONS
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Results of Operations:
- ----------------------
Total revenues for the nine months ended April 30, 1996 were
$8,279,000 versus $7,011,000 for the same period last year, an 18%
increase. Total revenues for the three months ended April 30, 1996 were
$2,948,000 versus $2,487,000 for the same period last year, an 18%
increase.
Hart Scientific revenues for the current nine month period were
$7,858,000 versus $6,633,000 for the same period last year, an 18%
increase. Hart Scientific revenues for the current three month period
were $2,783,000 versus $2,359,000 for the same period last year, an 18%
increase.
General & Administrative costs for the current nine month period
were $2,236,000 versus $1,803,000 for the same period last year. These
costs included Lifschultz Fast Freight depreciation of the New York
leasehold ($353,000 in the current nine month period).
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Marketing and sales expenses for the current three month period
were $316,000 and $823,000 for the current nine month period. For the
current nine months ended April 30, 1996 marketing and sales expenses
are 11% of Hart revenues versus 10% for the same period last year.
Consolidated net income before extraordinary items for the nine
months ended April 30, 1996 was $793,000 versus $496,000 for the same
period last year, a 60% increase. Consolidated net income including
extraordinary items for the current nine months is $2,072,000 which
includes an extraordinary gain of $1,279,000 for forgiveness of debt.
Net income for the current nine month period at Hart Scientific was
$1,146,000 versus $820,000 for the same period last fiscal year, a 39%
increase.
Consolidated net income for the current three month period was
$225,000 compared to a $118,000 during the same three month period
last year, a 90% increase. Consolidated net income including
extraordinary items for the current three months was $442,000 which
includes an extraordinary gain of $217,000 for forgiveness of debt.
Net income for the current three month period at Hart Scientific was
$364,000 versus $232,000 for the same period last fiscal year, a
56% increase.
Financial Condition and Liquidity
- ---------------------------------
The company's current ratio at April 30, 1996 is 2.37 versus 1.11
at July 31, 1995. The company is continuing its efforts to improve the
balance sheet by reducing debt at the Fast Freight subsidiary. The
current ratio has improved from .49 on July 31, 1993 to 2.37 on April
30, 1996.
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PART II - OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS. Not Applicable
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ITEM 2. CHANGES IN SECURITIES. Not Applicable
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not Applicable
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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No items were presented for a vote of security holders
during the period ended April 30, 1996.
ITEM 5. OTHER INFORMATION. Not Applicable
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. Not applicable.
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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.
LIFSCHULTZ INDUSTRIES, INC.
Date XX June 1996 By:/s/ Dennis R. Hunter
Dennis R. Hunter
President, Director
and Chief Financial
Officer
Date XX June 1996 By:/s/ Tim O. Pont
Controller
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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.
LIFSCHULTZ INDUSTRIES, INC.
Date June 1996 By:/s/
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Dennis R. Hunter
President, Director and
Chief Financial Officer
Date June 1996 By:/s/
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Tim O. Pont
Controller
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> APR-30-1996
<CASH> $1,682,000
<SECURITIES> 0
<RECEIVABLES> $1,747,000
<ALLOWANCES> 0
<INVENTORY> $4,713,000
<CURRENT-ASSETS> $4,870,000
<PP&E> $525,000
<DEPRECIATION> 0
<TOTAL-ASSETS> $8,361,000
<CURRENT-LIABILITIES> $2,057,000
<BONDS> 0
0
$16,000
<COMMON> $36,000
<OTHER-SE> $6,240,000
<TOTAL-LIABILITY-AND-EQUITY> $8,361,000
<SALES> $2,948,000
<TOTAL-REVENUES> $2,948,000
<CGS> $1,379,000
<TOTAL-COSTS> $2,678,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $24,000
<INCOME-PRETAX> $270,000
<INCOME-TAX> $45,000
<INCOME-CONTINUING> $225,000
<DISCONTINUED> 0
<EXTRAORDINARY> $217,000
<CHANGES> 0
<NET-INCOME> $442,000
<EPS-PRIMARY> .004
<EPS-DILUTED> .016
</TABLE>
