SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the Transition Period From to
Commission File No. 0-16293
LANXIDE CORPORATION
(Exact name of Small Business Issuer in its charter)
Delaware 51-0270253
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1300 Marrows Road
P.O. Box 6077
Newark, DE 19714-6077
(Address of principal executive offices) (Zip Code)
(302) 456-6200
Issuer's telephone number, including area code
Check whether the Issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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.
[ X ] Yes [ ] No
Transitional Small Business Disclosure Format (check one):
[ ] Yes [ X ] No
The number of shares of Common Stock outstanding as of August 11, 1998 was:
1,325,598.
<PAGE>
THIS FORM 10-QSB CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 WITH RESPECT TO
THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF LANXIDE
CORPORATION, INCLUDING STATEMENTS UNDER ITEM 1. FINANCIAL STATEMENTS AND ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION. THESE FORWARD-LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY SUCH MATTERS WILL BE REALIZED.
FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE
FOLLOWING POSSIBILITIES: (I) COMPETITIVE CONDITIONS IN THE INDUSTRIES IN WHICH
LANXIDE OPERATES; (II) FAILURE TO FURTHER COMMERCIALIZE ONE OR MORE OF THE
TECHNOLOGIES OF LANXIDE; (III) GENERAL ECONOMIC CONDITIONS THAT ARE LESS
FAVORABLE THAN EXPECTED AND (IV) ABILITY TO SECURE ADEQUATE FUNDING.
<PAGE>
LANXIDE CORPORATION
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheet at
June 30, 1998 and 1997 (Unaudited).............. 2
Consolidated Statement of Operations
for the Three Months and Nine Months Ended
June 30, 1998 and 1997 (Unaudited).............. 3
Consolidated Statement of Cash Flows
for the Nine Months Ended
June 30, 1998 and 1997 (Unaudited).............. 4
Notes to Consolidated Financial
Statements (Unaudited)...................... 5 - 8
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition.................................... 9-11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............ 14-15
<PAGE>
<TABLE>
<CAPTION>
Lanxide Corporation
Consolidated Balance Sheet
(Amounts in thousands, except per share data)
(Unaudited)
June 30, September 30,
Assets 1998 1997
---------- ------------
<S> <C> <C>
Cash and cash equivalents, including amounts restricted for use
by majority owned affiliate $ 96 $ 3,892
Accounts receivable 243 2,738
Inventories 0 3,036
Other current assets 0 447
---------- ------------
Total current assets 339 10,113
Property and equipment, net 2,226 9,681
Investment in affiliate 0 377
Other assets 0 346
========== ============
$ 2,565 $ 20,517
========== ============
Liabilities and Shareholders' Deficit
Current portion of long term debt 479 6,789
Accounts payable and accrued expenses 1,304 4,237
Deferred compensation 1,400 1,377
Deferred revenue 490 380
---------- ------------
Total current liabilities 3,673 12,783
Long-term debt 8,814 14,079
Deferred credit 0 357
---------- ------------
8,814 14,436
Minority interest in consolidated affiliates 0 2,006
Redeemable Series E preferred stock (aggregate liquidation value, $261); 224 225
---------- ------------
Shareholders' deficit
Preferred stock 15,000,000 shares authorized
Series A preferred stock (aggregate liquidation value,$2,000) $.01 par value;
1,101,683 shares issued and outstanding 11 11
Series H preferred stock (aggregate liquidation value,$2,000) $.01 Par value;
20,000 shares issued and outstanding Common stock,$.01 par value,
25,000,000 shares authorized:
1,325,598 issued and outstanding 13 13
Additional paid-in capital 191,006 191,006
Accumulated deficit (201,176) (200,883)
Cumulative translation adjustment 0 920
========== ============
(10,146) (8,933)
========== ============
$ 2,565 $ 20,517
========== ============
</TABLE>
See notes to consolidated financial statements.
Page 2
<PAGE>
<TABLE>
<CAPTION>
Lanxide Corporation
Consolidated Statement of Operations
(Amounts in thousands, except per share data)
(Unaudited)
Three Months ended June 30, Nine Months ended June 30,
------------------------------- ---------------------------------
1998 1997 1998 1997
----------- ---------- ---------- -----------
Revenue:
<S> <C> <C> <C> <C>
Sales 314 1,817 4,613 6,451
Licensing revenue 783 1,550 7,960 9,070
Research and development contract revenue 311 1,167 1,708 4,151
----------- ---------- ---------- -----------
1,408 4,534 14,281 19,672
----------- ---------- ---------- -----------
Operating costs:
Cost of sales 336 1,581 4,229 5,829
Research and development costs 365 820 3,601 3,587
Product development and engineering 301 1,983 1,375 4,986
Selling, general and administration 259 1,933 3,576 6,181
----------- ---------- ---------- -----------
1,261 6,317 12,781 20,583
----------- ---------- ---------- -----------
Income (loss) from operations before
minority allocation 147 (1,783) 1,500 (911)
Minority allocation of operating income 0 202 173 (944)
----------- ---------- ---------- -----------
Income (loss) from operations 147 (1,581) 1,673 (1,855)
Write-off of affiliate (377)
Income (loss) on sale of affiliates 798 (1,230)
Interest expense (271) (471) (1,112) (1,328)
Other income (33) 1 (6) 995
----------- ---------- ---------- -----------
Income (loss) before income taxes 641 (2,051) (1,052) (2,188)
Income tax expense (80) (150) (120)
----------- ---------- ---------- -----------
Net income (loss) 641 (2,131) (1,202) (2,308)
Dividends on mandatorily redeemable (3) (8) (11) (23)
preferred stock
Gain on redemption of of subsidiary's preferred stock 680
=========== ========== ========== ===========
Net income (loss) applicable to common shares 638 (2,139) (1,213) (1,651)
=========== ========== ========== ===========
Income (loss) per share
Basic $0.48 ($1.61) ($0.92) ($1.25)
Diluted $0.35 ($1.61) ($0.92) ($1.25)
</TABLE>
See notes to consolidated financial statements
Page 3
<PAGE>
<TABLE>
<CAPTION>
Lanxide Corporation
Consolidated Statement of Cash Flows
(Amounts in thousands)
(Unaudited)
Nine Months ended June 30,
--------------------------
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss ($1,202) ($2,308)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 480 1,420
Loss on sale of affiliates 1,230
Write-off of affiliate investment 377
Minority allocation of operating income 944
Loss (Gain) on the sale of equipment 53 (81)
Change in assets and liabilities:
Decrease in receivables 1,861 646
Decrease (increase) in inventories 306 (749)
Decrease in other assets 392 361
(Decrease) increase in accounts payable and accrued expenses (1,170) 688
(Decrease) increase in deferred revenue and deferred credit (226) 960
Increase in other liabilities 108
---------- ------------
Net cash provided by operating activities 2,101 1,989
========== ============
Cash flows from investing activities
Capital additions (4) (434)
Proceeds from the sale of equipment 396 115
---------- ------------
Net cash provided by (used in) investing activities 392 (319)
========== ============
Cash flows from financing activities
Redemption of a subsidiary's preferred stock (4,000)
Proceeds from issuance of debt obligations 4,141
Repayment of debt obligations (4,721) (371)
---------- ------------
Net cash used in financing activities (4,721) (230)
========== ============
Effect of exchange rate translations 920 (197)
---------- ------------
Net (decrease) increase (1,308) 1,243
Cash and cash equivalents, beginning of period 1,404 3,458
---------- ------------
Cash and cash equivalents, end of period $96 $4,701
========== ============
Cash paid for interest $653 $1,173
========== ============
</TABLE>
<PAGE>
Supplemental Schedule of Noncash investing and Financing Activities
The Company sold it's ownership in the capital stock of Lanxide Electronic
Components, Inc., Lanxide Armor Products, Inc, Lanxide KK (by transfer) and DLC
for the cancellation of debt of $8,654. In conjunction with the sale and
transfer, debt was satisfied as follows:
LAP/LEC KK/DLC Total
------- ------ -----
Net book value of assets disposed of $7,831 $3,596 11,427
Cancellation of debt (5,740) (2,914) (8,654)
Minority interest (63) (1,480) (1,543)
--------- ------ ------
(Gain) Loss on disposal $2,028 ($798) $1,230
========= ======= ======
See notes to consolidated financial statements
Page 4
<PAGE>
(Dollar amounts in thousands, except per share data)
(Unaudited)
4. PER SHARE DATA (continued)
<TABLE>
<CAPTION>
Three Months ended June 30, Nine Months ended June 30,
------------------------------ --------------------------------
1998 1997 1998 1997
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net income (loss) 641 (2,131) (1,202) (2,308)
Dividends on mandatorily redeemable
preferred stock (3) (8) (11) (23)
Gain on redemption of
subsidiary's preferred stock 680
Net income (loss) applicable
----------- ---------- ---------- -----------
to common shareholders 638 (2,139) (1,213) (1,651)
----------- ---------- ---------- -----------
Weighted average common
shares outstanding (basic) 1,325,598 1,325,598 1,325,598 1,325,598
Employe stock options 96,341 (a) (a) (a)
Warrants to purchase common shares 3,712 (a) (a) (a)
Convertible preferred stock 409,767 (a) (a) (a)
----------- ---------- ---------- -----------
Weighted average common
shares outstanding (diluted) 1,835,418 1,325,598 1,325,598 1,325,598
=========== ========== ========== ===========
Earnings (loss) per share-basic $0.48 ($1.61) ($0.92) ($1.25)
=========== ========== ========== ===========
Earnings (loss) per share-diluted $0.35 ($1.61) ($0.92) ($1.25)
=========== ========== ========== ===========
</TABLE>
(a) Due to the Company's net loss during these periods, a dilutive calculation
in accordance with SFAS 128 is not required.
As of June 30, 1998, the following employee stock options and warrants to
purchase shares of common stock were outstanding:
Exercise
Number Price
------ -----
Employee stock options 667,956 $1 - $320
Warrants to purchase common stock 359,513 $1.00-$7.50
Page 6
<PAGE>
LANXIDE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet at June 30, 1998, the consolidated
statements of operations and of cash flows for the nine months ended June
30, 1998 and 1997 have been prepared by Lanxide Corporation (the Company)
and have not been audited by the Company's Independent Auditors. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows at June 30, 1998 and for all periods presented
have been made.
These consolidated financial statements should be read in conjunction with
the financial statements and notes thereto included in the Company's Annual
Report on Form 10-KSB for the fiscal year ended September 30, 1997, filed
with the Securities and Exchange Commission. The results of operations for
the period ended June 30, 1998 are not necessarily indicative of operating
results for the full year.
2. CASH AND CASH EQUIVALENTS
All highly liquid investments with a maturity of three months or less when
purchased are considered to be cash equivalents.
3. INVENTORIES
Inventories are valued at the lower of cost (primarily average cost) or
market and consists of raw materials and supplies and are held by a
subsidiary company which amounts are not generally available to the
Company.
4. PER SHARE DATA
Net income (loss) per share is computed using the weighted average number
of common shares and potentially dilutive securities outstanding during the
period. The Company adopted the Financial Accounting Standards Board (FASB)
statement No. 128 "Earnings Per Share" for the periods presented below:
5. SIGNIFICANT EVENTS
Loan from Lanxide K.K.
On December 29, 1997, Lanxide K.K., a 65% owned Japanese subsidiary, agreed
to loan $1.8 million to the Company (the Lanxide K.K. Loan). The Company
received $1.3 million on December 29, 1997 and an additional $0.5 million
was received on January 12, 1998. The Lanxide K.K. Loan was to mature on
January 31, 1998 and bore interest at the rate of 6% per annum. Upon an
event of default under the Lanxide K.K. Loan, the Company was required to
transfer to Lanxide K.K. its 10% ownership in DuPont Lanxide Composites,
Inc. (the DLC interest). The loan came due on February 10, 1998, and the
Company negotiated an assignment and transfer with Lanxide K.K. on April 1,
1998 to settle the outstanding balance. As a result of the settlement, the
Company's interest in DLC was transferred to Lanxide KK on June 23, 1998,
the loan has been satisfied in full, and the Company realized a net
consolidated gain of $630,000 on the disposition.
<PAGE>
Restructure of Lanxide K.K.
The operations of Lanxide K.K. have been discontinued. By an agreement on
April 1, 1998, between the Company and Kanematsu Corporation (KG), the net
assets of Lanxide K.K. have been distributed to the owners, 65% to Lanxide
and 35% to KG. The Company distribution from Lanxide K.K. has in turn been
paid over to KG as a payment against the Company's loan from KG. The
Company incurred a loss of $1.0 million as a result of the disposition of
Lanxide K.K. The distribution rights to sell electronic components in Japan
using Lanxide Technology(TM) have been sold by Lanxide K.K. to Lanxide
Electronic Components, Inc., a subsidiary of DHB Capital Group. The
proceeds from that sale have also been distributed proportionately to KG
and the Company, again with the Company's distribution being further
applied to its balance on the KG loan. While there is the potential for
some further economic benefit to the Company under certain circumstances
from the further sale of the former distribution rights of Lanxide K.K.,
that former subsidiary is inactive, and the Company no longer owns any
stock in Lanxide K.K. In that connection, the Company has taken back all of
the rights to its technology in Japan, with the exception of previously
licensed rights to Nihon Cement Co., LTD; AKN Corporation; Celanx K.K.;
Lanxide Electronic Components, Inc.; Lanxide Armor Products, Inc. and
DuPont Lanxide Composites, Inc. Royalties from the AKN license agreement
for Japan will be distributed, pursuant to agreements, after a certain
amount of royalties are paid to KG from AKN, 48% to KG and 52% to the
Company.
Restructure of Loan with Kanematsu Corporation
The Company and KG have agreed to restructure the $10 million loan from KG
(capital loan) to the Company that had been scheduled to mature in December
1998. Under the new agreement, payments have been applied to the loan
balance from the sale of surplus equipment, the conversion of part of the
loan to an equipment installment loan dated June 18, 1998 and amended July
10, 1998, and the disposition of Lanxide K.K. described above. As a result
of such transactions, the Capital loan balance as of June 30, 1998 was $7.0
million and the balance of the Installment Note was $1.9 million as of the
same date. The new payment schedule for the loan requires principal and
interest payments over a seven-year period commencing April 1, 1999. During
the moratorium of principal payments in effect until that date, the Company
is required to make nine payments of $5,000 each toward interest on the
loan. The interest rate on the loan was reduced as of July 1, 1998 from
LIBOR plus 2% to the Japanese Yen Long Term Prime Rate of the Industrial
Bank of Japan plus 1%. As noted above and as part of the restructure of the
KG loan, the Company has agreed to sell its surplus equipment and apply the
proceeds from such sales to reduce the loan principal. In that connection,
the Company incurred a loss of approximately $335,000 on the sale of
surplus equipment and the write-down of obsolete equipment during the
quarter. The book value of all equipment kept by the Company that was
collateral for the loan has also been offset against the loan in exchange
for the execution of the new Installment Note in the amount of $1.9
million. The Installment Note will mature over an eight-year period
commencing May 10, 1998. The interest rate on the Installment Note is LIBOR
plus 2%.
Subsequent event: License issuance
On August 11, 1998, the Company issued two licenses to AlliedSignal, Inc.
(AlliedSignal) in the field of friction materials. One license is for a
worldwide territory, outside Japan, and the other license is for the
<PAGE>
territory of Japan. Simultaneous with the issuance of the licenses to
AlliedSignal, Lanxide K.K. sold its 10% interest in DLC to AlliedSignal,
whereby by prior agreement 65% of the proceeds were applied to reduce the
Capital Loan from Kanematsu. The combination of these related transactions
realized revenues of $1.1 million.
Elimination of Deferred Credit
As a result of the restructure of Lanxide K.K. and the restructure of the
KG loan, various potential contingencies related to the Company's interests
in Japan no longer exist. Consequently, the Company released $720,000 of
its deferred credit to licensing revenue. This portion of the Company's
deferred credit was generated in a prior period related to a license it had
issued to Celanx K.K. for which it had received cash. In addition, during
the quarter the Company released $330,000 of the deferred credit to gain on
the sale of assets that resulted in a lease-back of the sold property. The
Company renegotiated the lease rent resulting in present value benefits
that greatly exceeded the deferred gain. The gain had been amortizing over
the life of the lease, but has now been fully realized.
The Company continues to pursue additional technology license sales to
further resolve its financial situation. No assurances can be given that
additional technology licenses can be sold at a rate sufficient to allow
the Company to continue any of its operations.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The following is a discussion of the consolidated financial condition and
results of operations of the Lanxide Corporation and its majority-owned
affiliates (the Company) for the nine months ended June 30, 1998 and 1997, as
well as certain factors that may affect the Company's prospective financial
condition. This section should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto included elsewhere in this 10-QSB.
Overview
The Company's revenues consist mainly of technology licensing revenue, sales to
outside customers and contract funding. The Company operates principally in the
United States.
Commencing in 1995, the Company embarked on a program to license its technology
in certain specific market sectors by product and geography in order to generate
immediate cash for the Company. Since implementing this strategy, the Company
has consummated license agreements with A.P. Green Industries, Inc. ("A.P.
Green"), Waupaca Foundry, Inc. ("Waupaca"), Sturm Ruger & Company, Inc. ("Sturm
Ruger"), Brembo S.p.A. ("Brembo"), AKN Corporation ("AKN"), Nihon Cement Co.,
Ltd. ("Nihon Cement") and Commodore Polymer Technologies, Inc. ("Commodore")
which have generated license fees, as well as, in some cases future royalties.
In addition, the Company entered into two license agreements pursuant to the
sale of two wholly-owned subsidiaries and converted its joint venture with Nihon
Cement into a license arrangement.
Results of Operations
Results of operations may vary from period to period depending on several
factors including licensing transactions. Revenues from license agreements often
do not occur evenly in each reporting period, which can cause the results to
fluctuate.
"Licensing and other related revenues" represent amounts earned by the Company
from licensing its technology by product and geographic area and are recognized
as revenue when the Company fulfills its obligation under the applicable license
agreement. Also included in this revenue category are ancillary product sales
that are produced solely in support of existing or potential license agreements.
Costs incurred by the Company from licensing its technology are included in
"Product development and engineering" (PD&E) costs. PD&E also includes costs
incurred for projects sponsored by the Company and/or its joint venture partners
through the Company's consolidated affiliates. Operating income and losses
allocated to commercial venture partners through the Company's consolidated
affiliates are reported under "Minority allocation of operating (income) loss."
Revenues from research and development contracts and commercial development
agreements (other than the Company's agreements with its consolidated
affiliates) are reported under "Research and development contract revenue" in
the Company's Consolidated Statement of Operations. Expenses related to these
contracts and agreements are reported under operating costs as "Research and
development contract costs."
The Company's significant revenue sources in the first half of fiscal year 1998
consist primarily of (i) technology licensing revenues; (ii) sales revenues of
consolidated subsidiaries of the Company; and (iii) revenues from a brake
component development program between the Company and AKN;
<PAGE>
Percentage Relationship to Net Revenues
The following table sets forth the percentage relationship to net revenues of
certain items in the Company's Consolidated Statement of Operations for the
periods presented:
<TABLE>
<CAPTION>
Nine months ended June 30,
--------------------------
1998 1997
---- ----
<S> <C> <C>
Revenues 100% 100%
Operating costs:
Cost of sales (29) (30)
Research and development contract costs (25) (18)
Product development and engineering (10) (25)
Selling, general, and administrative (25) (31)
Minority allocation of operating loss (income) 1 (5)
Interest expense (8) (7)
Other income 5
Net (loss) income (8) (8)
</TABLE>
Nine months ended June 30, 1998 compared to nine months ended June 30, 1997
The Company recorded a net loss of $1,213,000 for the nine months ended June 30,
1998, as compared to a $1,651,000 net loss for the nine months ended June 30,
1997. The reduction in the loss incurred was due to a release of a deferred real
estate property gain of $320,000 and the release of $720,000 of a license
revenue that was previously deferred.
Net Sales and Cost of Sales
Sales for the nine months ended June 30, 1998 were $14,282,000 compared to
$19,672,000 for the nine months ended June 30, 1997.The cost of goods sold for
the most recent six month period was $4,229,000 yielding a gross profit on sales
of $384,000, consistent with the gross profit margins earned for the nine months
ended June 30, 1997.
Licensing and Other Related Revenues
Licensing and other related revenues were $7,960,000 and $9,070,000 for the nine
months ended June 30, 1998 and 1997, respectively. During the second quarter of
this fiscal year the Company executed a license with Commodore, for $5,300,000
in cash and debt cancellation and royalties on future sales. Total license
income reduced due to the receipt of $7,800,00 from AKN in the third quarter of
1997, which did not recur.
Product Development and Engineering
There were no significant fluctuations in the expenditures on product
development and engineering activities.
<PAGE>
Research and Development Contract Revenue and Contract Costs
Due to the lay-off of the employees in early February 1998, the Company booked
significantly less research and development contract revenue during the quarter
ended March 31, 1998. In addition, The Company did not work on government funded
projects during the last six months. For the nine months ended June 30, 1998 and
1997, revenue from research and development contract revenue was $1,708,000 and
$4,151,000 respectively, representing a gross revenue reduction for the most
recent nine months of $2,443,000.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were reduced during the quarter
ended June 30, 1998 due to the reduced number of administrative staff, the sale
of two of the Company's wholly-owned subsidiaries, Lanxide Electronic Components
Inc. and Lanxide Armor Products Inc. and the transfer of the Company's interest
in Lanxide KK. For the nine months ended June 30, 1998 selling general and
administrative expenses of $3,576,000 were approximately $2,605,000 less than
the nine months ended June 30, 1997.
Interest Expense
As a result of the cancellation of $5,740,000 bank debt by the sale of two
affiliates and the reduction of $4,500,000 of debt to Commodore Environmental
Services, Inc. and accrued interest through a licensing agreement, interest
expense was reduced by 16% in the nine months ended June 30, 1998.
Income Tax Expense
Income tax expense reflects taxes withheld on foreign source income for the
quarters presented.
Liquidity and Capital Resources
Since its inception, the Company has financed its working capital and capital
expenditure requirements with the proceeds from the sale of stock, borrowings,
product sales, research and development contracts and, more recently, technology
licensing revenues. The Company's working capital was a deficit $3,334,000 at
June 30, 1998, as compared to a deficit $2,670,000 at September 30, 1997. The
cash balance at June 30, 1998 was $96,000. At June 30, 1998, the Company had no
significant commitments to purchase capital equipment and continues to sell
surplus equipment to generate cash.
The Company is dependent on licensing its technology in order to generate
sufficient cash flows to fund its operations. No assurances can be given that
any additional licenses will be concluded at a sufficient rate to allow the
Company to continue its operations.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 27 Financial Data Schedule
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
LANXIDE CORPORATION
Date: August 11, 1998 By: /s/Marc S. Newkirk
------------------
Marc S. Newkirk
President and Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Company's Consolidated Balance Sheet at June 30, 1998 and Consolidated Statement
of Operations for the 9 months ended June 30, 1998, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 96
<SECURITIES> 0
<RECEIVABLES> 2,432
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 339
<PP&E> 10,103
<DEPRECIATION> (7,877)
<TOTAL-ASSETS> 2,565
<CURRENT-LIABILITIES> 3,673
<BONDS> 9,293
224
11
<COMMON> 13
<OTHER-SE> 191,006
<TOTAL-LIABILITY-AND-EQUITY> 2,565
<SALES> 4,613
<TOTAL-REVENUES> 14,281
<CGS> 4,229
<TOTAL-COSTS> 9,205
<OTHER-EXPENSES> 3,576
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,112
<INCOME-PRETAX> 1,052
<INCOME-TAX> 150
<INCOME-CONTINUING> 394
<DISCONTINUED> 1,607
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,213
<EPS-PRIMARY> 0.91
<EPS-DILUTED> 0.91
</TABLE>
