U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 1996
Commission File Number 0-18296
(Exact name of registrant as specified in its charter)
ENVIRONMENTAL MONITORING & TESTING CORPORATION
Delaware 62-1265486
- --------------------- ------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
825 Main Street South, New Ellenton, SC 29809
(Address of principal executive offices)
Registrant's telephone number, including area code:(803)652-2718
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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Title of each clas Outstanding at January 31, 1997
Common stock, 3,825,383
par value $0.01
Transitional Small Business Disclosure Format (Check one) Yes
No X
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited financial statements for the quarter ended December 31, 1996 are
provided on the four following pages.
INDEX
Balance Sheet Page 3
Statements of Operations and Retained Earnings Page 4
Statements of Cash Flows Page 5
Notes to Financial Statements Page 6
<PAGE>
ENVIRONMENTAL MONITORING & TESTING CORPORATION
BALANCE SHEET
(UNAUDITED)
<TABLE>
ASSETS December 31,1996
<S> <C>
Current Assets:
Cash $ 215,882
Accounts Receivable 30,935
Inventories 4,000
Other Current Assets 12,053
_______
Total Current Assets 262,870
Property, Plant, & Equipment 426,997
________
$ 689,867
========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 8,674
Accrued Expenses 6,472
________
Total Current Liabilities 15,146
________
Stockholders' Equity:
Preferred Stock, $.01 Par Value,
1,000,000 shares authorized,
and none issued
Common Stock,$.01 Par Value,
30,000,000 and 10,000,000
shares authorized and
6,144,000 shares issued 61,440
Capital-In-Excess of Par 1,963,508
Retained Earnings (1,153,300)
_________
871,648
Less: Cost of Treasury Stock,
2,318,617 shares held on
December 31, 1996 (196,927)
________
Total Shareholders' Equity 674,721
$ 689,867
</TABLE>
See Accompanying Notes
<PAGE>
ENVIRONMENTAL MONITORING & TESTING CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(UNAUDITED)
<TABLE>
Three Months Ended December 31
1996 1995
<S> <C> <C>
------------- --------------
Contract Revenue $ 83,589 $ 99,368
------------- --------------
Cost and Expenses:
Direct Contract Cost 32,465 52,315
Indirect Contract Cost 51,894 21,024
Selling, General, and Admin. 78,035 82,690
Depreciation 24,397 29,067
(Gain) Loss on Sale of
Property and Equipment (63,462) 0
-------------- --------------
Total Cost and Expenses 123,329 185,096
-------------- --------------
Income (Loss) from Operations (39,740) (85,728)
-------------- --------------
Other Income (Expenses):
Interest Income Net 1,535 2,517
Other, Net 325 0
------------- --------------
Total Other Income 1,860 2,517
------------- --------------
Net Income (Loss) (37,880) (83,211)
============= ==============
Retained Deficit,
Beginning of Period (1,115,420) (593,772)
------------- --------------
Retained Deficit, End of Period $ (1,153,300) $ (676,983)
============= ==============
Earnings (Loss) per Common Share$ (0.01) $ (0.02)
============= ==============
</TABLE>
See Accompanying Notes
<PAGE>
ENVIRONMENTAL MONITORING & TESTING CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
Three Months Ended December 31,
1996 1995
----------------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss) $ (37,880) $ (83,211)
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Depreciation 24,397 29,067
(Gain) on Sale of Property & Equipment (63,462) 0
Changes in Certain Assets and Liabilities:
Accounts Receivable 154,714 (3,694)
Other Current Assets 12,502 944
Accounts Payable (24,792) (228)
Other Current Liabilities (24,992) 3,951
---------------- --------------
Net Cash Provided by (used in)
Operating Activities 40,487 (53,171)
---------------- --------------
Cash Flows from Investing Activities:
Sale of Machinery & Equipment 135,600 0
---------------- --------------
Net Cash Provided by (used in)
Investing Activities 135,600 0
---------------- --------------
Cash Flows from Financing Activities:
Principal Payments for Borrowings 0 0
---------------- ---------------
Net Cash Provided by (used in)
Financing Activities 0 0
---------------- ---------------
Net Increase in Cash and Cash
Equivalents 176,087 (53,171)
Cash and Cash Equivalents,
Beginning of period 39,795 206,014
---------------- ---------------
Cash and Cash Equivalents,
End of period $ 215,882 $ 152,843
=============== ===============
Supplemental Disclosure of Cash Paid:
Interest $ 0 $ 0
</TABLE>
See Accompanying Notes
<PAGE>
ENVIRONMENTAL MONITORING & TESTING CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three month period ended December 31, 1996, are
not necessarily indicative of the results that may be expected for the year
ended September 30, 1997. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report on
Form 10-KSB for the year ended September 30, 1996.
2. Sales to Major Customer
The Company derived approximately 92 percent and 99 percent of its revenue
in the three months ended December 31, 1996 and 1995, respectively, from a
single customer, the Savannah River Site, a material processing facility
operated for the United States Department of Energy by the Westinghouse
Savannah River Company.
3. Net Income Per Common Share
The Company has common stock equivalents and has used the treasury stock
method to calculate the number of equivalent shares. The number of common
shares outstanding used in calculating earnings per share were based on
the weighted average method, as follows:
Three Months Ended December 31,
1996 1995
Primary shares 3,825,383 3,825,383
Fully diluted shares 3,825,383 4,825,383
4. Commitments & Contingencies
On August 7, 1996 the Company and an officer of the Company were named as
defendants in a sexual harassment and defamation suit filed by a former
female employee in the United States District Court for the District of
South Carolina. The suit seeks unspecified actual and punitive damages.
The Company is aggressively defending this action and alleges that this
action is malicious and without merit.
Item 2. Management's Discussion and Analysis
Three months ended December 31, 1996 vs. 1995
Contract revenue for the three months ended December 31, 1996 decreased
approximately 16% over the same period of the prior fiscal year. The
decrease is a result of a general decline in the need for drilling
services offered by the Company. Management, in an effort to continue
profitability, has reduced non-productive personnel. Indirect costs and
selling, general and administrative costs increased in relation to
sales due to the significant decrease in revenues. The Company had realized
gains on sales or property and equipment of $63,462 in the same period of
the prior year. The net loss for the three months ended December 31, 1996
was $37,880 as compared to a net loss of $83,211 incurred in the same
period of the previous year.
The Company has adopted FASB 109 Accounting for Income Taxes, and
consequently is not required to record any tax expense due to its
utilization of its net operating loss carry forwards. Therefore, no
income tax expense or benefit is recorded in the three month period ending
December 31, 1996 and 1995.
Liquidity and Capital Resources
During the three month period ended December 31, 1996, the Company
generated its working capital requirements through operating activities.
The Company's capital expenditures are generally for the replacement of
equipment and are being kept to a minimum. The Company continues to perform
repairs and maintenance on equipment and therefore does not anticipate any
replacement of equipment in the current fiscal year. Although no assurances
can be given, management is of the opinion that the working capital is
sufficient to meet the Company's anticipated needs during the ensuing
twelve months. At December 31, 1996 the Company had working capital of
$247,724, a current ratio of 17:1, a debt to equity ratio of .02:1, and
shareholders' equity of $674,721.
The Company has instituted ongoing programs to minimize any short term
shortages of working capital, generate revenue, reduce operating costs and
to increase accounts receivable turnover to generate positive cash flow.
These programs include the implementation of controls to reduce indirect
labor costs, the reduction of management, and the implementation of strict
controls over the acquisition of capital assets. All non-productive assets
are being identified and evaluated and are being sold when feasible. The
Company believes that these actions will result in adequate liquidity for
the fiscal year. In addition the Company may seek other sources of
capital, however the unfavorable operating results may impede the Company's
ability to obtain bank financing to meet its working capital needs in the
future.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
On August 7, 1996 the Company and an officer of the Company were named as
defendants in a sexual harassment and defamation suit filed by a former
female employee in the United States District Court for the District of
South Carolina. The suit seeks unspecified actual and punitive damages.
The Company is aggressively defending this action and alleges that this
action is malicious and without merit.
During 1995 the Company signed a letter of intent to merge with Jansko,
Inc. Jansko, Inc. was engaged in designing, manufacturing and marketing
office furniture including seating products, desks, tables, and credenzas.
Since the signing of the letter of intent the Company advanced $385,841 to
Jansko, Inc. in conjunction with the proposed merger of the two Companies.
The Company did not merge with Jansko, Inc., and on May 1, 1996 Mr.
Georges, the Company's President and CEO, filed a petition in the Federal
District Court of Fort Lauderdale, Florida to move Jansko, Inc., into
Chapter 7 Liquidation of the Bankruptcy Act and its Amendments. On May 23,
1996 an Order For Relief was entered by the United State Bankruptcy Court,
Southern District of Florida in Fort Lauderdale, Florida. As a result of
these events and uncertainty of any recovery, the Company recorded a loss
during the quarter ended March 31, 1996 on all advances and loans to
Jansko, Inc.
A majority shareholder of the Company has filed various lawsuits against
certain officers and directors of Jansko, Inc. and related parties on
behalf of the Company and other parties seeking restitution of funds
advanced. There can be no assurances that this litigation will result in
any recovery, as such no recovery has been recorded by the Company.
Item 4. Submission Matters to a Vote of Security Holders.
The board of directors set a record date of December 13, 1996 for an annual
stockholders' meeting that was held on January 15, 1997 at 10:45 a.m. EST
at the corporate offices of the Company. The proxies and financial
information were mailed on or about December 17, 1996.
The following actions were acted upon at the meeting of the stockholders:
I. The following were elected to serve on the board of directors of
the Company until the Company's next annual meeting:
George J. Georges votes: for 3,359,902 against 8,650 withheld 9,400
Stephen A. Lassak votes: for 3,364,902 against 3,650 withheld 9,400
Rebecca Del Medico votes: for 3,364,902 against 3,650 withheld 9,400
II. Ratify the appointment of Sweeney & Company, P.A. as independent
auditors for the fiscal year ending September 30, 1997.
Votes: for 3,372,202 against 3,000 withheld 2,750
III. No other matters were acted upon.
Item 6. Exhibits and Reports on Form 8-K.
None during the quarter ended December 31, 1996.
<PAGE>
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.
Environmental Monitoring
& Testing Corporation
(Registrant)
Date: February 2, 1997By /s/ George J. Georges
George J. Georges, President and CEO
(Principal Executive Officer)
By /s/ Stephen A. Lassak
Stephen A. Lassak, Vice President and CFO
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 215,882
<SECURITIES> 0
<RECEIVABLES> 30,935
<ALLOWANCES> 0
<INVENTORY> 4,000
<CURRENT-ASSETS> 262,870
<PP&E> 1,090,701
<DEPRECIATION> 663,704
<TOTAL-ASSETS> 689,867
<CURRENT-LIABILITIES> 15,146
<BONDS> 0
0
0
<COMMON> 1,828,021
<OTHER-SE> (1,153,300)
<TOTAL-LIABILITY-AND-EQUITY> 689,867
<SALES> 83,589
<TOTAL-REVENUES> 83,589
<CGS> 123,329
<TOTAL-COSTS> 123,329
<OTHER-EXPENSES> (1,860)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (37,880)
<INCOME-TAX> 0
<INCOME-CONTINUING> (37,880)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (37,880)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
