<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal quarter ended June 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number 0-17580
FIRETECTOR INC.
-----------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 11-2941299
(State or jurisdiction of incorporation (IRS employer identification Number)
or organization)
262 Duffy Avenue, Hicksville, New York 11801
(Address of principal executive offices Zip Code)
(516) 433-4700
(Registrant's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes[ X ] No[
]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of August 12, 1999, 1,571,097
shares of Registrant's Common Stock were issued and outstanding.
Transitional Small Business Disclosure Format (check one Yes[ ] No[ X ]
<PAGE>
INDEX
Part I - Financial Information (unaudited)
Item 1. Financial Statements.
Consolidated Balance Sheet as at June 30, 1999
Consolidated Statements of Operations for the Three Month
Periods Ended June 30, 1999 and 1998
Consolidated Statements of Operations for the Nine Month
Periods Ended June 30, 1999 and 1998
Consolidated Statements of Cash Flows for the Nine
Month Periods Ended June 30, 1999 and 1998
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Part II - Other Information
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
<PAGE>
FIRETECTOR INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30, 1999
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 179,616
Accounts receivable, principally trade, less
allowance for doubtful accounts of $233,814 5,466,237
Inventories 2,382,129
Deferred taxes 168,000
Prepaid expenses and other current assets 197,729
----------
TOTAL CURRENT ASSETS 8,393,711
----------
PROPERTY, PLANT AND EQUIPMENT -at cost, less
accumulated depreciation and
amortization of $947,185 308,289
SOFTWARE DEVELOPMENT COSTS, net 1,548
OTHER ASSETS 248,654
DEFERRED TAXES 126,000
----------
TOTAL ASSETS $9,078,202
==========
See accompanying Notes to the Consolidated Financial Statements
<PAGE>
FIRETECTOR INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30, 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable to Mirtronics $423,188
Other notes payable - principally to affiliate 75,753
Accounts payable and accrued expenses 2,214,361
Unearned service revenue 321,637
Current portion of capital lease obligations 26,404
-----------
TOTAL CURRENT LIABILITIES 3,061,343
-----------
Note payable to bank 2,050,790
Other notes payable, less current portion 193,679
Capital lease obligations, less current portion 32,686
-----------
TOTAL LIABILITIES 5,338,498
-----------
STOCKHOLDERS' EQUITY
Convertible preferred stock, 2,000,000 shares authorized-
$1.00 par value; none issued and outstanding
Common stock, 25,000,000 shares authorized, $.001
par value; issued and outstanding 1,571,097 shares 1,571
Capital in excess of par 5,158,624
Deficit (1,420,491)
-----------
TOTAL STOCKHOLDERS' EQUITY 3,739,704
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,078,202
==========
See accompanying Notes to the Consolidated Financial Statements
<PAGE>
FIRETECTOR INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Nine months ended
June 30,
1999 1998
------- ---------
Net sales $ 9,254,047 $ 6,936,817
Service revenue 3,082,690 3,208,808
----------- -----------
Total revenues 12,336,737 10,145,625
----------- -----------
Cost of sales 6,197,644 4,496,564
Cost of service 2,161,873 2,046,960
Selling, general and administrative 3,227,088 3,057,678
Interest expense 187,109 186,514
Depreciation and amortization expense 162,387 156,668
Other (income) - net (8,578) (30,796)
----------- -----------
11,927,523 9,913,588
----------- -----------
Income from operations before provision
for income taxes 409,214 232,037
Provision for income taxes:
Current 35,000 21,000
Deferred 80,000
----------- ----------
115,000 21,000
----------- ----------
Net Income $ 294,214 $ 211,037
=========== ==========
Earnings Per Common Share
Basic Earnings Per Share 0.19 0.16
Diluted Earnings Per Share 0.17 0.13
=========== ==========
Weighted Average Number of Common
Shares Outstanding 1,571,097 1,317,229
Weighted Average Number of Common and
Potential DilutiveCommon Shares Outstanding 1,698,926 1,742,972
See accompanying Notes to the Consolidated Financial Statements
<PAGE>
FIRETECTOR INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
For the Three Months Ended
June 30,
1999 1998
----------- -----------
Net sales $3,678,520 $2,840,635
Service revenue 988,811 1,027,698
----------- -----------
Total revenues 4,667,331 3,868,333
----------- -----------
Cost of sales 2,507,930 1,911,950
Cost of service 763,920 679,968
Selling, general and administrative 1,127,014 1,044,210
Interest expense 81,112 75,050
Depreciation and amortization expense 57,997 51,775
Other (income) - net (8,578) (10,463)
----------- -----------
4,529,395 3,752,490
----------- -----------
Income from operations before provision
for income taxes 137,936 115,843
Provision for income taxes:
Current 7,000 11,000
Deferred 28,000
----------- -----------
35,000 11,000
----------- -----------
Net Income $ 102,936 $ 104,843
=========== ===========
Earnings per common share
Basic earnings per share 0.07 0.07
Diluted earnings per share 0.06 0.07
=========== ===========
Weighted average number of common
shares outstanding 1,571,097 1,570,963
Weighted average number of common and
potential dilutive common shares
outstanding 1,749,851 1,747,813
See accompanying Notes to the Consolidated Financial Statements
<PAGE>
Firetector Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
For The Nine Months Ended
June 30,
1999 1998
---------- --------
OPERATING ACTIVITIES
Net income $294,214 $211,037
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 162,387 175,433
Provision for doubtful accounts 54,000 54,000
Changes in operating assets and liabilities:
Accounts receivable (651,795) (633,077)
Inventories, prepaid expenses and other
current assets (552,499) (207,584)
Other assets 84,156 34,747
Accounts payable and accrued expenses 476,462 324,387
Unearned service revenue (21,298) (11,918)
Accounts receivable from affiliated companies (33,933)
Due to affiliated companies 30,215 31,708
---------- ----------
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES (124,158) (55,200)
INVESTING ACTIVITIES
Purchases of property, plant and equipment (98,163) (37,526)
---------- ----------
NET CASH (USED IN) INVESTING ACTIVITIES (98,163) (37,526)
FINANCING ACTIVITIES
Borrowings under new revolving
credit agreement 1,716,415
Principal payments on revolving line of
credit, long term debt, notes payable
and capital lease obligations 34,479 (1,891,702)
Proceeds from revolving line of credit,
notes payable and capital
lease obligations 262,544 33,905
Issuance of common stock in connection
with exercise of options 552,000
Repurchase of common stock (552,000)
Other 1,532
---------- ----------
NET CASH (USED IN)
FINANCING ACTIVITIES 297,023 (139,850)
---------- ----------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS 74,702 (232,576)
Cash and cash equivalents at beginning
of period 104,914 579,052
---------- ----------
Cash and cash equivalents at end of period $179,616 $346,476
========== ==========
Cash paid during the year for:
Income taxes $ 80,836 $171,593
Interest 170,501 150,640
Supplemental Cash Flow information
During the nine months ended June 30, 1999 the Company incurred capital lease
obligations of $23,520 for the acquisition of equipment. There were no capital
lease obligations incurred in the nine months ended June 30, 1998.
In the nine month periods ending June 30, 1998, the Company restructured
preferred stock and notes payable to Mirtronics by the issuance of $845,000 of
new notes. (See Note 5 - Transactions With Related Parties).
See accompanying Notes to the Consolidated Financial Statements.
<PAGE>
FIRETECTOR INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Results for the three and nine months ended June 30, 1999 are not necessarily
indicative of the results that may be expected for the fiscal year ending
September 30, 1999. For further information, refer to the consolidated financial
statements and footnotes thereto included in Firetector Inc. ("the Company") and
Subsidiary's annual report on Form 10-KSB for the year ended September 30, 1998.
2. INVENTORY
Inventories are priced at the lower of cost (first-in, first-out) or market and
consist primarily of raw materials.
3. LONG TERM DEBT
The Company has a revolving Credit Facility with Citizens Business Credit
Company of Boston, Mass, (the "Credit Facility"). The credit facility provides
for a $3,000,000 revolving line of credit for the three year period ending June
2001. The Credit Facility provides for interest at prime rate plus 3/4% on
outstanding balances. At June 30, 1999 $2,050,790 was outstanding under this
facility. Advances under the Credit Facility are measured against a borrowing
base calculated on eligible receivables and inventory. The Credit Facility is
secured by all of the assets of the Company and all of its operating
subsidiaries, as well as a $300,000 letter of credit provided by Mirtronics
Inc., the Company's largest stockholder, an Ontario corporation ("Mirtronics"),
The Credit Facility includes certain restrictive covenants, which among other
things impose limitations on declaring or paying dividends, acquisitions and
capital expenditures. The Company is also required to maintain certain financial
ratios. At June 30, 1999, the Company was not in default of any of its
covenants.
4. NOTE PAYABLE TO MIRTRONICS
At June 30, 1999, the note payable to Mirtronics totaled $423,188. While this
note is payable on demand, it is subordinate to and subject to a payment
restriction under the Company's Credit Facility with it's bank. Also see Note 5
- - Transactions with Related Parties.
<PAGE>
FIRETECTOR INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
NINE MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
5. TRANSACTIONS WITH RELATED PARTIES
In consideration of collateral support for a previous credit facility for the
Company and various loans over several years, the Company had granted to
Mirtronics options to purchase the Company's Common Stock. Mirtronics had the
right to acquire up to an aggregate of 613,333 shares of common stock at an
exercise price of $.90 per share, a portion of which were held for the benefit
of the Company's Chairman. These options were to expire on December 31, 1998. In
addition, the Company had previously entered into a Debt/Equity Agreement with
Mirtronics, that provided for the retirement of debt and the issuance to
Mirtronics of $675,000 of Preferred Stock, which could also be converted into
450,000 shares of common stock.
In February 1998, the Company and Mirtronics reached an agreement to reorganize
the options, convertible debt and preferred stock held by Mirtronics so as to
reduce the potential dilution of these securities by 366,667 shares of common
stock. Under this agreement, Firetector redeemed the $675,000 of Convertible
Preferred Stock and $170,000 of convertible debt for an aggregate price of
$845,000. These securities were convertible into 563,333 shares of common stock.
In satisfaction thereof, Firetector issued a $620,000 Convertible Note with
interest at 10% (payable upon demand and convertible into 413,333 shares of
common stock at a conversion price of $1.50 per share until December 31, 2002),
and a $225,000 Note (without a convertible feature), with interest at 10%,
payable upon demand. The foregoing notes are limited as to repayment based upon
covenant requirements and borrowing availability under the terms of the
Company's Credit Facility. Also in connection with this reorganization,
Mirtronics exercised 613,333 options for common stock for an aggregate
consideration of $552,000 and Firetector simultaneously repurchased and retired
216,667 of the newly issued shares for $552,000.
In September 1998, the Company entered into a Debt Matching Agreement with
Mirtronics whereby an aggregate of $508,619 due to Firetector by Mirtronics was
applied to reduce the notes payable and interest due by Firetector to
Mirtronics. As a consequence of this debt matching agreement, the $225,000
Non-Convertible note with interest of $13,870 was satisfied in full and the
$620,000 Convertible Note with interest of $38,219 was reduced to a new balance
of $392,973. In addition, the right to convert this note into 413,333 shares of
common stock was surrendered in consideration for a new warrant to purchase
310,000 shares of common stock (the "1998 warrants"). These 1998 warrants are
exercisable at anytime until December 31, 2003 at an exercise price of $1.02 per
share.
In consideration of collateral support for the Company's Credit Facility in
1994, the Company granted Genterra Investment Corporation, an Ontario
Corporation, ("GIC") options for 166,667 unregistered shares of the Company's
common stock at $.90 per share through December 31, 1999. In July 1996, GIC
exercised 33,334 of these options at $.90 per share. An officer of GIC is also a
director of Mirtronics.
At the termination of employment of an officer/director of the Company (other
than for cause), the officer was granted the right to cause the Company to
repurchase up to 8,437 shares of common stock from the officer/director at a
price of $38.88 per share by means of a seven year installment promissory note
bearing interest of 4% per
<PAGE>
FIRETECTOR INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
NINE MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
5. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
annum. On December 1, 1996 the officer exercised the option and, commencing
January 1, 1997, the Company repurchased 8,437 shares at a price of $38.88
payable monthly over seven years at an interest rate of 4% per annum.
6. EARNINGS PER SHARE
The Financial Accounting Standards Board issued SFAS No. 128 "Earnings Per
Shares" which requires companies to report basic and diluted earnings per share
("EPS") computations effective with the Company's quarter ending December 31,
1997. Basic EPS excludes dilution and is based on the weighted-average common
shares outstanding and diluted EPS gives effect to potential dilution of
securities that could share in the earnings of the Company. Diluted EPS reflects
the assumed issuance of shares with respect to the Company's employee stock
options, non-employee stock options, warrants and convertible notes and
preferred stock. The computation for the three and nine months ending June 30,
1998 has been restated to conform to the requirements of SFAS N0. 128. Shown
below is a table that sets forth the respective calculations for basic and
diluted EPS:
FIRETECTOR INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
<TABLE>
<CAPTION>
Three Months ended June 30, Nine Months ended June 30,
1999 1998 1999 1998
----------------------------- ----------------------------
<S> <C> <C> <C> <C>
Basic EPS Computation
Net Income available to common
shareholders $102,936 $104,843 $294,214 $211,037
Weighted average outstanding shares 1,571,097 1,570,963 1,571,097 1,317,229
Basic EPS $.07 $.07 $.19 $.16
========= ========== ========= =========
Diluted EPS Computation Three Months ended June 30, Nine Months ended June 30,
1999 1998 1999 1998
------------------------------ ----------------------------
Income available to common
shareholders $102,936 $104,843 $294,214 $211,037
Impact of convertible notes 12,400 14,467
-------- ---------- --------- ---------
Diluted net income $102,936 $117,243 $294,214 $225,504
======== ========== ========= ==========
Weighted-average shares 1,571,097 1,570,963 1,571,097 1,317,229
--------- --------- --------- ----------
Plus: Incremental shares from
assumed conversions
Non Employee Stock Options 56,756 128,708 44,103 360,196
Employee Stock Options 24,213 48,142 16,957 48,880
Warrants* 97,785 66,769 16,667
Dilutive potential common shares 178,754 176,850 127,829 425,743
---------- ---------- ---------- ----------
Adjusted weighted-average shares 1,749,851 1,747,813 1,698,926 1,742,972
---------- ---------- ---------- ----------
Diluted EPS $.06 $.07 $.17 $.13
==== ==== ==== ====
</TABLE>
*Warrants convertible into 33,334 shares were antidilutive in both 1999 periods.
Warrants convertible into 33,334 shares were antidilutive the three months ended
June 30, 1998 and 16,667 were antidilutive for the nine months ended June 30,
1998.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Unaudited)
Liquidity and Capital Resources
In June 1998, the Company signed a three-year revolving credit facility with
Citizens Business Credit Company of Boston, (the "Credit Facility"). The Credit
Facility provides for a $3,000,000 revolving line of credit for a three year
period through June, 2001. The Credit Facility provides for interest at prime
plus 3/4% on outstanding balances. Advances under the Credit Facility are
measured against a borrowing base calculated on eligible receivables and
inventory. The Credit Facility is secured by all assets of the Company and all
of its operating subsidiaries, as well as a $300,000 letter of credit provided
by Mirtronics.
The Credit Facility includes various covenants, which among other things, impose
limitations on declaring or paying dividends, acquisitions and capital
expenditures. The Company is also required to maintain certain financial ratios.
At March 31, 1999, the Company was not in default with any of its financial
covenants.
Initial proceeds from the Credit Facility amounting to $1,716,415 were used to
pay off principal and interest due on the Company's previous loan agreement with
another bank. The Company owed $2,050,790 under the Credit Facility at June 30,
1999.
Net cash used by operations for the nine months ended June 30, 1999 amounted to
$124,158 as compared to $55,200 for the comparable prior year period. The
primary reason for the additional cash used by operations was due to an increase
in accounts receivable arising from a $2.2 million increase in sales. In
addition, inventories increased $480,000 since September 30, 1998 and represent
purchases of materials for projects to be shipped over the next three to six
months. These increases were funded in part by a $476,000 increase in accounts
payable and accrued expenses.
The ratio of the Company's current assets to current liabilities increased to
approximately 2.74 to 1 at June 30, 1999 from 2.37 to 1 at June 30, 1998 due to
continued profitable operations.
Results of Operations
Revenues
The Company's product revenues during the three and nine months ended June 30,
1999 increased 29% to $3,678,520 and 33% to $9,254,047, respectively as compared
to $2,840,635 and $6,936,817 for the comparable prior year. These product
revenue increases resulted from delivery to certain large New York City
Metropolitan area commercial and transit projects where the Company acts as
prime contractor and/or resells equipment manufactured by a third party vendor.
These projects included an audio/visual project at a museum and shipments of
communication equipment to several subway complexes. A portion of these projects
amounting to $820,000 during the 1999 quarter and $1,600,000 during the nine
month period of 1999 were completed by subcontractors for the Company and/or
included purchases from a third party vendor for resale; both of which involved
limited gross margin for the Company. In comparison, the 1998 three and nine
month periods only had $400,000 of product revenues that were derived from such
contracts. The 1999 periods also reflect increased product sales in the Dallas
market area particularly from fire alarm systems for school construction.
<PAGE>
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Unaudited)
Service revenues during the same three and nine month periods of 1999 were
$988,811 and $3,082,690 as compared to $1,027,698 and $3,208,008, respectively,
for the comparable prior year periods. The decrease reflects lower call-in
service on fire systems. Competition for new service contracts, retention of
existing service contracts and intense price competition continues to remain
high in New York.
Gross Profit
Gross profit from product revenues increased 26% to $1,170,590 for the three
months ended June 30, 1999 and increased 25% to $3,056,403 for the nine months
ended June 30, 1999. These increases in gross margin are attributed to increased
product revenues during the 1999 periods. Gross profit percentage on product
revenues for the three and nine month periods ended June 30, 1999 was 32% and
33%, respectively, as compared with 33% and 35%, respectively, for comparable
1998 periods, essentially constant. The impact of lower margin product mix in
1999 (as discussed above) was offset by contribution to fixed overhead from
increased product revenues.
Gross profit percentage on service revenues for the three and nine months
periods ended June 30, 1999 was 23% and 30% respectively, as compared with 33%
and 35%, respectively, for the comparable 1998 period. The lower gross profit
percentage on service revenues for the three and nine periods ended June 30,
1999 is due to the decrease in call-in service on essentially a fixed overhead
structure, as well as higher union benefit costs, and from increased price
competition in New York City.
Income
Income from operating activities for the three and nine month periods ended June
30, 1999 was $137,936 and $409,214, respectively as compared with income from
operations of $115,843 and $232,037 for the comparable 1998 periods. This
increase in operating income is primarily attributed to the increase in product
revenues and related gross margin during the three and nine month periods of
1999 as compared with comparable periods in 1998. However, this contribution to
operating income was mitigated to some extent by increased selling, general and
administrative expenses. During the past eighteen months, the Company has
intensified its marketing efforts and expanded its product territory. While this
effort has offset certain other savings in selling, general and administrative
cost, the Company has experienced higher revenue and an improvement in new order
bookings and quotation activity (see new order information below). The new
marketing and support structure that is in place can support a higher level of
shipments. During the 1998 periods, other income represents interest on notes
receivable from Mirtronics. These obligations where extinguished in September
1998 through a Debt Matching agreement that reduced a like amount of notes
payable due to Mirtronics.
The Company had a deferred income tax provision in 1999 which reflects the
reduction of the deferred tax asset due to utilization of that portion of its
net operating loss that was recorded in prior years. The deferred tax provision
will not require the outlay of cash as the Company has a net operating loss for
tax purposes of approximately $300,000 at June 30, 1999. The Company's current
income tax provision represents state and local taxes and the alternative
minimum tax for federal income purposes.
Order Position
The Company order position, excluding service, at June 30, 1999 amounted to
$8,300,000 as compared to $8,200,000 at March 31, 1999 and $9,600,000 at June
30, 1998. Subsequent to June 30, 1999 the Company received $2.5 million 2.
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Unaudited)
of new orders for communication systems for a New York City airport terminal and
a high speed rail facility in New York City. With these orders the Company's
order position exceeded $10 million. The high level of order position reflects
in part the Company's recent intensified marketing efforts. Due to the fact that
the Company's products are sold and installed as part of larger construction on
mass transit projects, there is typically a delay between the booking of the
contract and its revenue realization. The Company expects to fulfill the
majority of its backlog over the next twelve months. The order position
includes, and the Company continues to bid on projects that might include
significant subcontractor labor, involving low margin but setting a platform for
future product additions, tenant installations and service revenues.
Year 2000
The Company has conducted an evaluation of the actions necessary in
order to ensure that its computer systems will be able to function without
disruption with respect to the application of dating systems in the Year 2000.
As a result of these evaluations the Company has begun upgrading and replacing
certain of its computer information and other computer systems so as to be able
to operate without disruption due to Year 2000 issues. The Company has purchased
and installed new software for its computer information system that is Year 2000
compliant. The upgraded computer information system is presently performing all
tasks and is accepting dates in the year 2000. Certain peripheral personal
computers used outside the main computer information system still need to be
upgraded or replaced.. Performance of the Company's proprietary products is not
date sensitive. However, date information is displayed on certain console
equipment. The Company has completed software changes so that its proprietary
equipment is also compliant with respect to display information and the Company
is installing these software upgrades to customer equipment in buildings as part
of normal maintenance service. The Company does not anticipate that the costs of
its remedial actions taken or to be taken will be material to the results of
operations or financial condition. However, there can be no assurance that all
the remedial actions being implemented by the Company will be completed by the
time necessary to avoid dating systems problems or that the cost of doing so
will not be material. In addition, disruptions with respect to the computer
systems of vendors or customers, which systems are outside the control of the
Company, could impair the ability of the Company to obtain necessary materials
or products or to sell to or service their customers. The Company continues to
review Year 2000 issues with its major suppliers of product and its service
providers. However, there can be no guarantee that the systems of other
companies on which the Company's systems rely will be timely converted, or that
a failure to convert by another company, or a conversion that is incompatible
with the Company's systems would not have a material adverse effect on the
Company.
<PAGE>
Part II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable
Item 2. Changes in Securities.
Not applicable
Item 3. Defaults Upon Senior Securities.
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable
Item 5. Other Information.
Item 6. Exhibits and Reports on form 8-K.
a. Exhibits.
Ex-27 Financial Data Schedule
b. Reports on Form 8-K
No Reports on Form 8-K were filed during the quarter ended
June 30, 1999.
<PAGE>
SIGNATURES
Pursuant to 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.
FIRETECTOR, INC
(Registrant)
/s/JOHN A. POSERINA
------------------------------
John A. Poserina,
Chief Financial Officer, Secretary
And Director
Date: August 14, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from this
Consolidated Statement of Financial Condition at June 30, 1999 (Unaudited) and
the Consolidated Statement of Income for the Three and Nine Months Ended June
30, 1999 (Unaudited) and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> JUN-30-1999
<CASH> 179,616
<SECURITIES> 0
<RECEIVABLES> 5,466,237
<ALLOWANCES> 233,814
<INVENTORY> 2,382,129
<CURRENT-ASSETS> 8,393,711
<PP&E> 1,255,474
<DEPRECIATION> 947,185
<TOTAL-ASSETS> 9,078,202
<CURRENT-LIABILITIES> 3,061,343
<BONDS> 0
<COMMON> 1,571
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,078,202
<SALES> 12,336,737
<TOTAL-REVENUES> 12,336,737
<CGS> 8,359,517
<TOTAL-COSTS> 11,927,523
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 187,109
<INCOME-PRETAX> 409,214
<INCOME-TAX> 115,000
<INCOME-CONTINUING> 294,214
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 294,214
<EPS-BASIC> .19
<EPS-DILUTED> .17
</TABLE>
