ION
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 quarterly period ended September 30, 1997.
[ ] Transition Report Under to Section 13 or 15(d) of the Exchange Act for
the transition period from _______ to _______, _______.
1-10361
Commission File Number
TANKNOLOGY-NDE INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 95-3634420
(State of Incorporation) (IRS Employer Identification No.)
8900 Shoal Creek Blvd., Bldg. 200 Austin , Texas 78757
(Address of Principal Executive offices)
Issuer's telephone number, including area code (512) 451-6334
(Former name NDE Environmental Corporation)
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 ninety 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.
Class Outstanding at September 30, 1997
- ------------------ ---------------------------------------------
Common 15,978,610
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
Page 1
<PAGE>
TANKNOLOGY-NDE INTERNATIONAL, INC.
INDEX
Page
Number
------
PART I FINANCIAL INFORMATION............................................. 3
Item 1. Financial Statements (Unaudited)................................ 3
Condensed Consolidated Balance Sheets
September 30, 1997 and December 31, 1996........................ 3
Condensed Consolidated Statements of Operations
Three Months and Nine Months Ended September 30, 1997 and 1996.. 4
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1997 and 1996................... 5
Notes to Condensed Consolidated Financial ...................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations .......................................... 7
PART II OTHER INFORMATION................................................. 11
Item 6. Exhibits and Reports on Form 8-K................................ 11
SIGNATURES................................................................. 12
Page 2
<PAGE>
TANKNOLOGY-NDE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
---------------- ---------------
ASSETS (Unaudited)
<S> <C> <C>
Cash ........................................................... $ 148,537 $ 2,412,233
Restricted cash ................................................ 3,000,000 --
Trade accounts receivable, less allowance for doubtful
accounts of $944,808 in 1997 and $837,480 in 1996 .......... 8,835,576 5,735,550
Inventories .................................................... 622,023 367,362
Prepaid expenses and other current assets ...................... 1,328,344 1,578,097
---------------- ---------------
Total Current Assets ....................................... 13,934,480 10,093,242
Equipment and improvements, net of accumulated
depreciation of $8,629,294 in 1997 and $7,611,234 in 1996 .. 4,585,910 5,736,391
Goodwill, net of accumulated amortization of $55,122 in 1996 ... -- 4,922,617
Patents licenses and other intangible assets, net of accumulated
amortization of $1,070,113 in 1997 and $773,140 in 1996 ... 1,703,185 3,374,962
Deferred financing costs ...................................... 755,969 922,424
---------------- ---------------
Total Assets ............................................... $ 20,979,544 $ 25,049,636
================ ===============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable ............................................... $ 2,511,110 $ 1,673,470
Accrued liabilities ............................................ 2,681,808 4,885,260
Accrued payroll and payroll taxes .............................. 1,411,447 1,469,786
Current portion of long-term debt .............................. 4,497,982 1,963,564
---------------- ---------------
Total Current Liabilities .................................. 11,102,347 9,992,080
Long term debt, less current portion ........................... 10,070,238 14,192,011
Deferred license revenue ....................................... 570,836 --
Warrants with put option ....................................... 2,200,750 1,600,000
---------------- ---------------
Total Liabilities .......................................... 23,944,171 25,784,091
---------------- ---------------
Stockholders' Deficit
Series AAA Convertible Preferred Stock, $.0001 par value;
authorized, 400 shares; issued and outstanding 1 share
stated at liquidation value of $5,000 per share............ 5,000 5,000
Common stock, $.0001 par value; authorized, 50,000,000 shares;
issued and outstanding 15,978,610 shares at September 30,
1997, and December 31, 1996................................ 1,598 1,598
Additional paid-in capital...................................... 27,578,446 27,578,446
Accumulated deficit............................................. (30,519,334) (28,302,374)
Cumulative foreign currency translation adjustment.............. (30,337) (17,125)
---------------- ---------------
Total Stockholders' Deficit..................................... (2,964,627) (734,455)
---------------- ---------------
Total Liabilities and Stockholders' Deficit.......................... $ 20,979,544 $ 25,049,636
================ ===============
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
Page 3
<PAGE>
TANKNOLOGY-NDE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September, 30
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues .................................................... $ 9,889,309 $ 3,097,897 $ 25,407,707 $ 8,638,503
Cost of sales ............................................... 7,410,762 1,915,355 19,211,475 5,447,412
------------ ------------ ------------ ------------
Gross Margin ........................................... 2,478,547 1,182,542 6,196,232 3,191,091
Selling, general and administrative ......................... 1,853,215 1,729,720 5,971,560 4,702,238
Impairment of long-lived assets ............................. -- 833,321 -- 833,321
------------ ------------ ------------ ------------
Operating Profit ( Loss) ............................... 625,332 (1,380,499) 224,672 (2,344,468)
Other income (expense):
Interest income ............................................ 66,202 -- 66,202 37
Interest expense ........................................... (810,570) (225,808) (2,481,934) (593,285)
------------ ------------ ------------ ------------
Net loss before Extraordinary Item .......................... (119,036) (1,606,307) (2,191,060) (2,937,716)
Extraordinary gain ......................................... -- 1,813,149 -- 1,813,149
------------ ------------ ------------ ------------
Net income (loss) before Provision
for income taxes ....................................... (119,036) 206,842 (2,191,060) (1,124,567)
Provision for income taxes .................................. 600 -- 25,900 --
------------ ------------ ------------ ------------
Net income (loss) ...................................... $ (119,636) $ 206,842 $ (2,216,960) $ (1,124,567)
============ ============ ============ ============
Net loss per share before
extraordinary item ..................................... $ (0.01) $ (0.20) $ (0.14) $ (0.64)
Extraordinary item, per share ..................... -- 0.23 -- 0.40
------------ ------------ ------------ ------------
Net income (loss ) per share ...................... $ (0.01) $ 0.03 $ (0.14) $ (0.24)
Weighted average number of
shares outstanding ..................................... 15,978,610 7,978,610 15,978,610 4,558,601
============ ============ ============ ============
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
Page 4
<PAGE>
TANKNOLOGY-NDE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
----------------------------------------
September 30, 1997 September 30, 1996
------------------ ------------------
Cash Flows from Operating Activities
<S> <C> <C>
Net loss ........................................................ $ (2,216,960) $ (1,124,567)
Adjustments to Reconcile Net Loss to Net Cash
Used in Operating Activities:
Extraordinary gain .............................................. -- (1,813,149)
Depreciation and amortization .................................. 2,933,932 1,116,044
Amortization of discounts and financing costs ................... 1,101,222 82,679
Gain on sale of assets .......................................... (75,589) (199,711)
Write down of assets ............................................ 16,396 833,321
Other ........................................................... (13,212) (12,380)
Changes in Operating Assets and Liabilities:
(Increase) decrease in trade accounts receivable ................ (3,100,026) 447,636
Increase in inventories ......................................... (254,661) (167,572)
Decrease in prepaid expenses and other current assets ........... 331,476 111,933
Increase in accounts payable ................................... 837,640 481,659
Decrease in accrued liabilities ................................. (2,386,785) (236,300)
Decrease in accrued payroll and
payroll taxes ............................................... (58,339) (147,436)
------------------ ------------------
Net cash used in operating activities ........................... (2,884,906) (627,843)
Cash Flows from Investing Activities
Proceeds from sale of USTMAN .................................... 5,250,000 --
Proceeds from sale of licenses .................................. 1,947,500 --
Additions to equipment and improvements ......................... (1,729,250) (458,597)
Proceeds from sale of equipment ................................. 79,758 253,590
Other ........................................................... (4,095) --
------------------ ------------------
Net cash provided by(used in) investing
activities .................................................. 5,543,913 (205,007)
Cash Flows from Financing Activities
Net proceeds from line of credit ................................ -- 244,384
Proceeds from long-term debt .................................... 2,840,688 --
Payments on long-term debt ...................................... (4,763,391) (717,994)
Proceeds from issuance of notes payable ......................... -- 1,000,000
------------------ ------------------
Net cash provided by (used in) financing
activities .................................................. (1,922,703) 526,390
Net increase (decrease) in cash ................................. 736,304 (306,460)
Cash at beginning of period ..................................... 2,412,233 327,035
------------------ ------------------
Cash (including restricted cash) at end of period ............... $ 3,148,537 $ 20,575
================== ==================
</TABLE>
Page 5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: ACCOMPANYING UNAUDITED FINANCIAL STATEMENTS
Basis of Presentation: The financial statements of Tanknology-NDE
International, Inc. (formerly, NDE Environmental Corporation) and its
subsidiaries (the "Company") included herein have been prepared without audit
pursuant to the rules and regulations of the Securities and Exchange Commission,
and, in the opinion of management, reflect all adjustments necessary to present
fairly the results of operations for such interim periods. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations; however, management believes
that the disclosures are adequate to make the information presented not
misleading. The accompanying unaudited financial statements for the three and
nine month periods ended September 30, 1997 and 1996 contain all adjustments,
consisting of only normal recurring accruals, necessary to present fairly the
financial position of the Company as of September 30, 1997 and 1996 and the
results of operations and cash flows for the periods then ended. The results of
operations for the Company's interim periods are not necessarily indicative of
the results to be expected for the entire year. It is suggested that these
financial statements be read in conjunction with the audited financial
statements and notes thereto included in the Company's annual report on Form
10-KSB/A for the year ended December 31, 1996.
Certain amounts shown in the 1996 financial statements have been
reclassified to conform to the 1997 presentation.
NOTE 2: COMMITMENTS AND CONTINGENCIES
There have been no material changes in the information reported as of
December 31, 1996 as reported on Form 10- KSB/A in Footnote 11 accompanying the
audited financial statements.
NOTE 3: IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards 128 "Earnings per Share" (SFAS
128"), effective for financial statements for periods ending after December 15,
1997. SFAS 128 primarily substitutes a somewhat different calculation, labeled
"Basic" earnings per share, for the previously issued statistic, "Primary"
earnings per share. The Company believes that the future adoption of this
pronouncement will not have a significant impact on disclosures for earnings per
share for the periods presented.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports issued to shareholders. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. SFAS No. 131 is effective for financial statements for fiscal years
beginning after December 15, 1997. The adoption of SFAS 131 will have no impact
on the Company's consolidated results of operations, financial position or cash
flows.
NOTE 4: RESTRICTED CASH
As a condition of approval for the sale of USTMAN by the company's senior
bank and subordinated debt holder, $3,000,000 of the cash proceeds have been
placed in a restricted account with the Company's senior bank and is held as
collateral against outstanding loans until the Company identifies appropriate
investment opportunities.
Page 6
<PAGE>
TANKNOLOGY-NDE INTERNATIONAL, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
The following table reflects the percentage relationship to net revenues of
certain items included in the company's statement of operations for the three
month and nine month periods ended September 30, 1997 and 1996. The 1997 results
of operations include the results of operations of the UST Group of Companies
that were acquired (the "Acquisition") from TEI Inc. (formerly Tanknology Inc.)
on October 25, 1996. The Acquisition was accounted for as a purchase and
accordingly the results of operations of the Company include the operations of
the UST Group from that date forward.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ -----------------------------
September September September September
30, 1997 30, 1996 30, 1997 30, 1996
-------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenues 100% 100% 100% 100%
Cost of Sales 75% 62% 76% 63%
-------------- -------------- ------------- --------------
Gross Margin 25% 38% 24% 37%
Selling, General and Admin. 19% 56% 23% 54%
Non-recurring charge - 27% - 10%
-------------- -------------- ------------- --------------
Operating Profit ( Loss) 6% (45)% 1% (27)%
Other Income (Expense) (7)% (7)% (10)% (7)%
-------------- -------------- ------------- --------------
Net loss before Extraordinary Item (1)% (52)% (9)% (34)%
Extraordinary Item - 59% - 21%
Net Loss (1)% 7% (9)% (13)%
============== ============== ============= ==============
</TABLE>
Revenues
Revenues for the three months ended September 30, 1997 were $9,889,309
compared to $3,097,897 in the 1996 period, an increase of $6,791,412 or 219%.
The increase in revenues over last year is primarily due to the inclusion of the
UST Group of Companies acquired on October 25, 1996, the "Acquisition". In the
third quarter, revenues were also favorably impacted by the addition of a
construction management group which generated over $1,000,000 of revenue in its
first quarter of operation.
For the nine months ended September 30, 1997, revenues totaled $25,407,707
compared to $8,638,503 in the 1996 period, an increase of $16,769,204 or 194%
Revenues for the nine-month period ended September 30, 1997 included $117,169
and $1,884,361 of revenues from the Company's Canadian operations and USTMAN,
respectively, both of which were sold in 1997.
Page 7
<PAGE>
TANKNOLOGY-NDE INTERNATIONAL, INC.
Cost of Sales
Cost of sales for the three months ended September 30, 1997 was $7,410,762
(75% of revenue) compared to $1,915,355 (62% of revenue) for the three months
ended September 30, 1996, an increase of $5,495,407 , or 287%. Gross margin was
$2,478,547 (25% of revenue) for 1997, compared to $1,182,542 (38% of revenue)
for 1996. Gross margin as a percentage of sales decreased from 38% of revenues
in 1996 to 25% of sales in 1997. This decrease was due primarily to the addition
of fixed capacity (e.g., employees, vans, equipment and regional offices) from
the UST Group Acquisition.
For the nine months ended September 30, 1997, cost of sales totaled
$19,211,475 compared to $5,447,412 in the 1996 period, an increase of
$13,764,063 or 253%. Gross margin as a percentage of sales decreased from 37% of
revenues in 1996 to 24% of sales in 1997.
Selling, General and Administrative
Selling, general and administrative expense for the three months ended
September 30, 1997 was $1,853,215 or 19% of revenues compared to $1,729,720 in
1996 or 56% of revenue, an increase of $123,495 or 7%. The increase in selling,
general, and administrative expenses was due to the Acquisition. The decrease in
the percentage of sales from 56% to 19% is due to the cost efficiencies and the
higher overall volume of revenues realized as a result of the Acquisition.
For the nine months ended September 30, 1997, selling, general and
administrative expense totaled $5,971,560 compared to $4,702,238 in the 1996
period, an increase of $1,269,322 or 27%. The increase in selling, general, and
administrative expenses was due to the Acquisition. The decrease in the
percentage of sales from 54% to 23% is due to the cost efficiencies realized and
the higher overall volume of revenues in conjunction with the Acquisition.
1996 Impairment of Long-lived Assets and Extraordinary Gain
In the third quarter of 1996, the Company recorded an extraordinary gain of
$1,813,149 related to the retirement of a note payable in the original principle
amount of $2,450,000. The note was incurred in 1994 and was related to the
purchase of assets from a third party. Also in the third quarter, the Company
recorded a non-recurring write down of the assets purchased in the 1994
transaction in the amount of $833,321 The Company incurred this write down in
value due to its determination that there had been a permanent decline in the
value of these assets.
Earnings before Depreciation, Amortization, Interest and Taxes (EBITDA)
For the three months ended September 30, 1997 EBITDA, was $1,537,458 or 16%
of revenues compared to negative EBITDA (excluding the impact in 1996 of the
non-recurring asset write down and the extraordinary gain noted above) of
$164,967 or 5% of revenues in 1996. For the nine months ended September 30, 1997
EBITDA was $3,156,858, or 12% of revenues, compared to negative EBITDA
(excluding the impact in 1996 of the non-recurring asset write down and the
extraordinary gain noted above) of $395,103, or 5% of revenues, in 1996. The
increase in EBITDA in both periods (as adjusted) of $1,702,425 and $3,551,961,
respectively, was due to the cost efficiencies realized as a result of combining
the operations of the UST Group and Tanknology-NDE International, Inc. USTMAN,
which was sold on May 22, 1997, contributed approximately $618,000 of EBITDA in
the nine-months ended September 30, 1997.
Interest Income
Interest income for the three and nine-month periods ended September 30,
1997 was $66,202 (1% of revenues) compared to $37 for the nine-month period
ended September 30, 1996. The increase in income in both periods for 1997 from
the prior year was due to interest income on the restricted cash balance.
Page 8
<PAGE>
TANKNOLOGY-NDE INTERNATIONAL, INC.
Interest Expense
Interest expense for the three and nine-month periods ended September 30,
1997 was $810,570 (8% of revenues) and $2,481,934 (10% of revenue) respectively,
compared to $225,808 (7% of revenues) and $593,285 (7% of revenue) for the
respective three and nine-month periods in 1996. The increase in expense in both
periods of 1997 from the prior year was due to interest on additional debt
incurred to finance the Acquisition.
Net Loss
For the three months ended September 30, 1997, the Company incurred a net
loss of $119,636 a decrease of $326,478 or 158% compared to the net profit of
$206,842 for the three months ended September 30, 1996. The 1996 period was
impacted by the non-recurring write down of assets and the extraordinary gain
noted above. Excluding both of these unusual items, the net loss for the three
months ended September 30, 1996 was $772,986 compared to the current period loss
of $119,636 a decrease of $653,350 or 85%. The net loss for the current period
also includes amortization costs of $383,244 with no prior year counterpart.
Components directly attributable to the Acquisition are: $55,485 of amortization
of deferred financing costs, $117,509 of amortization of discount of
subordinated debt, $10,000 of amortization of a non-compete covenant, and
estimated accretion of the value of the Warrants with Put Option of $200,250.
For the nine-months ended September 30, 1997, the Company incurred a net
loss of $2,216,960 an increase of $1,092,393 or 97%, compared to a net loss of
$1,124,567 for the nine-month period ended September 30,1996. Excluding the
impact of the non-recurring write down of assets and the extraordinary gain, the
net loss for the nine months ended September 30, 1996 was $2,104,395 compared to
the current year net loss of $2,216,960, an increase of $112,565 or 5%. The net
loss for the current period also includes amortization costs of $1,255,454 with
no prior year counterpart. Components directly attributable to the Acquisition
are: $124,232 of goodwill amortization expense, $166,455 of amortization of
deferred financing costs, $334,017 of amortization of discount of subordinated
debt, $30,000 of amortization of a non-compete covenant, and estimated accretion
of the value of the Warrants with Put Option of $600,750. USTMAN contributed
approximately $332,000 of net income in 1997.
Liquidity and Capital Resources
At September 30, 1997, the Company had working capital of $2,832,133
compared to working capital of $101,162 at December 31, 1996.
Cash used in operating activities was $2,884,906 for the nine months ended
September 30, 1997 and was used primarily to fund an increase in receivables and
payments of accrued liabilities of $2,386,785 including payments of acquisition
related liabilities of approximately $1,291,000.
Cash provided by investing activities was $5,543,913 for the nine months
ended September 30, 1997 compared to cash used in investing activities of
$205,007 in the 1996 period. On February 20, 1997, the Company sold
substantially all of the operating assets of its Canadian operation that had
been acquired as part of the Acquisition in 1996. The Company realized proceeds
of $1,147,500 related to the sale of the business and technology licenses and
$50,000 from the sale of the fixed assets of the Canadian operation. The Company
retained all of the working capital of the Canadian subsidiary and has
substantially liquidated this working capital and redirected these funds to its
U.S. operation. For the nine months ended September 30, 1997, the Company
expended $1,729,250 for capital expenditures compared to $458,597 in the
comparable 1996 period. The increase in capital expenditures is a result of the
Company's plan to increase its investment for upgrading and adding to its fleet
of vehicles and to invest substantially in data processing equipment and
software to improve the efficiency of its operation. The Company anticipates
that these investments will result in cost efficiencies, better customer service
and additional capacity to take advantage of additional business opportunities.
Page 9
<PAGE>
TANKNOLOGY-NDE INTERNATIONAL, INC.
On May 22,1997, the Company sold USTMAN for $5,250,000 in cash and an 8%
note for $500,000 (the "Note") due in one year. All cash on hand at USTMAN
immediately prior to the closing of the transaction was also retained by the
Company. The sale agreement also provides for a further payment to the Company
relating to a post-closing adjustment based upon certain working capital
calculations. As a condition of approval of the sale transaction by the
Company's senior bank and subordinated debt holder, three million dollars
($3,000,000) of the cash proceeds have been placed in a restricted account with
the Company's senior bank and will be held as collateral against outstanding
loans until the Company identifies appropriate investment opportunities. The
Note is also pledged to the bank and subordinated debt holder as collateral. The
remaining $2,250,000 of cash proceeds from the sale was used to pay down amounts
due under it's revolving credit line. The Company did not recognize any gain or
loss on the transaction as the excess of the purchase price over the net
tangible assets sold was used to reduce goodwill associated with the
Acquisition.
At September 30, 1997, the Company had outstanding long-term debt
(including current maturities) of $14,568,220 compared to $16,155,575 at
December 31, 1996. The decrease of $1,587,355 was due primarily to required
principle payments on bank term debt of $900,000 and the $2,250,000 pay down on
the revolving credit line from the proceeds of the sale of USTMAN. At September
30, 1997 the Company had $1,450,000 outstanding under its revolving credit line
and had $2,500,000 available for additional borrowing under its revolving credit
agreement. As of September 30,1997, the Company was in compliance with the
financial debt covenants related to its long-term financing agreements.
The Company believes that cash on hand, funds from operations and available
bank credit will be sufficient to fund operations, including scheduled debt
repayments and capital expenditures for the foreseeable future.
This Form 10QSB contains statements which, to the extent that they are not
recitations of historical fact, constitute "forward looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Act of 1934. All forward looking statements involve risks and
uncertainties. The forward looking statements in this document are intended to
be subject to the safe harbor protection provided by Sections 27A and 21E. For a
discussion identifying some important factors that could cause actual results to
differ materially from those anticipated in the forward looking statements see
the Company's Form 10KSB page 13 "Management Discussion and Analysis" for the
fiscal year ended December 31, 1996.
Page 10
<PAGE>
TANKNOLOGY-NDE INTERNATIONAL, INC.
PART II OTHER INFORMATION
Item 4. Submission of Matters to a vote of Security Holders
The 1997 annual meeting of the stockholders of the Company was held on
August 14, 1997. The following directors were elected at the meeting: Jay Allen
Chaffee; Charles C. McGettigan; A. Daniel Sharplin; Michael S. Taylor; Myron A.
Wick III; and Mark A. Bober
The following matters were voted on at the meeting:
1. Proposal to amend the Certificate of Incorporation to change the Company's
name to Tanknology-NDE International, Inc.
For Against Abstain
------------ ------------ ------------
15,105,996 640 45
2. Election of Directors:
For Withheld
---------- ----------
Jay Allen Chaffee 15,091,581 15,100
Charles C. McGettigan 15,106,591 90
A. Daniel Sharplin 15,106,581 100
Michael S. Taylor 15,106,591 130
Myron A. Wick III 15,106,591 90
Mark A. Bober 15,106,591 90
3. Proposal to amend and restate the Company's 1989 Stock Option Plan,
increasing the number of shares reserved thereunder from 2,500,000 to 6,000,000.
For Against Abstain Not Voted
------------ ------------ ------------ ------------
15,065,372 16,580 3,073 21,386
4. Proposal to ratify selection of Ernst & Young L.L.P. as the Company's
independent public accountants for 1997:
For Against Abstain
------------ ------------ ------------
15,106,041 240 400
Item 6. Exhibits and Reports on Form 8-K
None
Page 11
<PAGE>
TANKNOLOGY-NDE INTERNATIONAL, INC.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, hereunto duly
authorized.
TANKNOLOGY-NDE INTERNATIONAL, INC.
(Registrant)
Date: November 17, 1997 /s/ DAVID G. OSOWSKI
---------------------------------------------
David G. Osowski
Vice President and Chief Financial Officer
Page 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Tanknology-NDE International, Inc. financial statements as of the quarter ended
September 30, 1997.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Sep-30-1997
<CASH> 3,148,537
<SECURITIES> 0
<RECEIVABLES> 9,780,384
<ALLOWANCES> 944,808
<INVENTORY> 622,023
<CURRENT-ASSETS> 13,934,480
<PP&E> 13,215,204
<DEPRECIATION> 8,629,294
<TOTAL-ASSETS> 20,979,544
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0
5,000
<COMMON> 1,598
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<CGS> 0
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<LOSS-PROVISION> 500,000
<INTEREST-EXPENSE> 2,481,934
<INCOME-PRETAX> (2,191,060)
<INCOME-TAX> 25,900
<INCOME-CONTINUING> (2,216,960)
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<NET-INCOME> (2,216,960)
<EPS-PRIMARY> (0.14)
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</TABLE>
