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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-27986
ITEQ, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 41-1667001
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2727 ALLEN PARKWAY, SUITE 760, HOUSTON, TEXAS 77019
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code 713-285-2700
Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares of each of the issuer's classes of common stock,
as of the latest practicable date.
27,166,373
(Shares of common stock outstanding as of April 29, 1998)
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ITEQ, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 1998
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I -- FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
Consolidated Balance Sheets as of December 31, 1997 and
March 31, 1998
(unaudited)............................................ 3
Consolidated Statements of Operations for the Three Months
Ended March 31, 1997 (unaudited) and 1998
(unaudited)............................................ 4
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1997 (unaudited) and 1998
(unaudited)............................................ 5
Notes to Consolidated Financial Statements (unaudited).... 6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................... 9
PART II -- OTHER INFORMATION......................................... 12
</TABLE>
2
<PAGE> 3
ITEQ, INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND MARCH 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ ------------
(UNAUDITED)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents................................... $ 9,681 $ 5,958
Due on contracts and other receivables, net................. 72,140 62,763
Unbilled revenues........................................... 741 1,612
Costs and estimated earnings in excess of billings on
uncompleted contracts..................................... 30,164 34,909
Inventories................................................. 13,138 14,721
Prepaid expenses, deposits and other assets................. 3,538 3,293
Deferred tax asset.......................................... 7,589 5,411
Assets held for sale........................................ 2,925 2,925
-------- --------
Total current assets.............................. 139,916 131,592
Property and equipment, net................................. 42,198 42,176
Other assets, net........................................... 79,373 78,610
-------- --------
TOTAL ASSETS...................................... $261,487 $252,378
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable............................................ $ 24,861 $ 24,746
Accrued liabilities
Job costs................................................. 9,498 5,614
Accrued compensation and benefits......................... 6,077 6,230
Accrued expenses and other current liabilities............ 25,634 18,106
Billings in excess of costs and estimated earnings on
uncompleted contracts..................................... 8,194 6,358
Progress billings........................................... 579 1,334
Current maturities of long-term debt........................ 104 28
Income taxes payable........................................ 438 438
-------- --------
Total current liabilities......................... 75,385 62,854
LONG-TERM LIABILITIES
Long-term obligations, less current maturities.............. 89,954 88,974
Deferred tax liability...................................... 4,760 4,760
-------- --------
Total Liabilities................................. 170,099 156,588
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 1,000 shares authorized, no
shares issued or outstanding.............................. -- --
Common stock, $.001 par value, 40,000 shares authorized:
26,912 and 27,079 shares issued and outstanding at
December 31, 1997 and March 31, 1998, respectively........ 27 27
Additional paid-in capital.................................. 119,823 120,462
Retained earnings (deficit)................................. (27,644) (23,791)
Translation adjustment...................................... (818) (908)
-------- --------
Total Stockholders' Equity........................ 91,388 95,790
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........ $261,487 $252,378
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
3
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ITEQ, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------
1997 1998
------- -------
<S> <C> <C>
Revenues.................................................... $74,079 $83,683
Cost of revenues............................................ 56,956 63,360
Selling, general and administrative expenses................ 9,877 10,674
Depreciation and amortization............................... 1,718 1,941
Merger, acquisition and restructuring costs................. -- 194
------- -------
Operating profit.................................. 5,528 7,514
------- -------
Interest expense, net....................................... (1,857) (1,591)
Miscellaneous income, net................................... 113 144
------- -------
Earnings from continuing operations before income tax
provision................................................. 3,784 6,067
Income tax provision........................................ 1,521 2,214
------- -------
Earnings from continuing operations......................... 2,263 3,853
------- -------
Loss from discontinued operations, net of income tax
benefit................................................... (358) --
------- -------
Net earnings................................................ $ 1,905 $ 3,853
======= =======
BASIC EARNINGS (LOSS) PER SHARE:
Earnings from continuing operations......................... $ 0.11 $ 0.14
Loss from discontinued operations........................... $ (0.02) $ --
------- -------
Net earnings per common share............................... $ 0.09 $ 0.14
======= =======
Weighted average common shares outstanding.................. 20,831 26,984
======= =======
DILUTED EARNINGS (LOSS) PER SHARE:
Earnings from continuing operations......................... $ 0.10 $ 0.14
Loss from discontinued operations........................... $ (0.01) $ --
------- -------
Net earnings per common share............................... $ 0.09 $ 0.14
======= =======
Weighted average common and common equivalent shares
outstanding............................................... 21,805 28,497
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
4
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ITEQ, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1997 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings................................................ $ 1,905 $ 3,853
Adjustments to reconcile net earnings to net cash provided
(used) by operating activities:
Non-cash interest......................................... 218 39
Depreciation and amortization............................. 1,793 1,941
Provision for deferred income taxes....................... 917 2,178
Changes in assets and liabilities:
Due on contracts and other receivables................. 2,749 8,488
Inventories............................................ 4,306 (1,562)
Costs and estimated earnings in excess of billings on
uncompleted contracts................................. (3,413) (4,832)
Prepaid expenses, deposits and other assets............ 305 353
Accounts payable and accrued liabilities............... (3,511) (11,642)
Billings in excess of costs and estimated earnings on
uncompleted contracts................................. 1,418 (1,629)
Progress billings...................................... 1,359 755
Other.................................................. (419) (129)
-------- --------
Net cash provided (used) by operating
activities...................................... 7,627 (2,187)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Contingent purchase consideration paid...................... (2,190) --
Cash received from sales of land, building & equipment...... 11 --
Purchases of property and equipment......................... (1,237) (1,227)
-------- --------
Net cash used by investing activities............. (3,416) (1,227)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term obligations........................... (19,791) (980)
Net borrowings (payments) under line of credit.............. 11,500 --
Proceeds from exercise of stock options and warrants........ 1,240 639
Other....................................................... (67) --
-------- --------
Net cash used by financing activities............. (7,118) (341)
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH..................... 41 32
-------- --------
Net decrease in cash and cash equivalents................... (2,866) (3,723)
Cash and cash equivalents, beginning of period.............. 6,331 9,681
-------- --------
Cash and cash equivalents, end of period.................... $ 3,465 $ 5,958
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
5
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ITEQ, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with regulation S-X pursuant to the rules and regulations
of the Securities and Exchange Commission. 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, although management believes that the
disclosures are adequate to make the information presented not misleading.
In the opinion of management, the unaudited consolidated financial
statements contain all adjustments, consisting of only normal recurring
adjustments, necessary to present fairly the financial position as of March 31,
1998, the results of operations for the three months ended March 31, 1997 and
1998, and the cash flows for the three months ended March 31, 1997 and 1998.
The unaudited consolidated financial statements include the accounts of
ITEQ, Inc. and its wholly-owned subsidiaries ("ITEQ" or the "Company").
Significant intercompany balances and transactions have been eliminated. Certain
reclassifications have been made to the prior period's consolidated financial
statements to conform with the current period presentation.
Basic EPS is computed by dividing net income by the weighted average number
of shares of common stock outstanding during the period. Weighted average number
of shares of common stock outstanding for diluted EPS includes the dilutive
effect of common stock equivalents. The only reconciling difference between the
numerators and denominators for basic and diluted earnings per share is the
impact of common stock options and warrants outstanding calculated using the
treasury stock method.
The Company implemented Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income," effective January 1, 1998. This standard
requires that all items required to be recognized under this standard as
components of comprehensive income, such as the Company's foreign currency
translation adjustments, be reported in a financial statement. The Company's
comprehensive income was as follows:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
------------------
1997 1998
------- -------
<S> <C> <C>
Net income.................................................. $ 1,905 $ 3,853
Foreign currency translation adjustments.................... (425) (90)
------- -------
Total....................................................... $ 1,480 $ 3,763
======= =======
</TABLE>
NOTE 2 -- DUE ON CONTRACTS AND OTHER RECEIVABLES
At December 31, 1997, and March 31, 1998, due on contracts and other
receivables consist of:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ ---------
<S> <C> <C>
Billings on completed contracts and contracts in progress... $68,522 $59,695
Retained contract receivables............................... 4,599 4,059
Allowance for doubtful accounts............................. (981) (991)
------- -------
Total............................................. $72,140 $62,763
======= =======
</TABLE>
NOTE 3 -- INVENTORIES
Inventories consist of costs for which no related revenue has been
recognized. Inventories include materials used in the manufacturing process,
purchased parts and equipment held for resale and are valued at
6
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ITEQ, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
the lower of cost or market. Cost is determined by the average cost for
materials and the first-in, first-out (FIFO) method for purchased parts. At
December 31, 1997 and March 31, 1998, inventories consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ ---------
<S> <C> <C>
Raw materials............................................... $ 6,910 $ 7,148
Work in progress............................................ 5,027 6,954
Finished goods.............................................. 1,201 619
------- -------
Total............................................. $13,138 $14,721
======= =======
</TABLE>
NOTE 4 -- OTHER ASSETS
At December 31, 1997 and March 31, 1998, other assets consist of the
following:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ ---------
<S> <C> <C>
Excess of costs over net assets acquired, net of accumulated
amortization, of $7,787 and $8,383 at December 31, 1997
and March 31, 1998, respectively.......................... $65,867 $65,232
Licenses, trademarks and tradenames, net of accumulated
amortization of $1,639 and $1,693 at December 31, 1997 and
March 31, 1998, respectively.............................. 11,607 11,497
Other....................................................... 1,899 1,881
------- -------
Total............................................. $79,373 $78,610
======= =======
</TABLE>
NOTE 5 -- BUSINESS ACQUISITIONS
On October 28, 1997, the Company issued approximately 9,541 shares of ITEQ
common stock in exchange for all the outstanding shares of Astrotech
International Corporation ("Astrotech") common stock. The merger has been
accounted for as a pooling-of-interests and, accordingly, the Company's
consolidated financial statements have been restated to include the accounts and
operations of Astrotech. In addition, all outstanding options to purchase
Astrotech common stock were converted into options to purchase shares of ITEQ
common stock, as adjusted for the exchange ratio. In connection with the merger,
the Company amended and restated its Certificate of Incorporation to, among
other things, increase its authorized shares of common stock from 30,000 to
40,000.
NOTE 6 -- MERGER, ACQUISITION AND RESTRUCTURING COSTS
Merger, acquisition and restructuring costs of $194 for the three months
ended March 31, 1998 relate to the terminated purchase agreement with Matrix
Service Company.
NOTE 7 -- DISCONTINUED OPERATIONS
During August 1997 and effective on August 31, 1997, management of ITEQ
adopted plans to discontinue certain of its low margin generic fabrication
operations at its Allied subsidiary.
Certain of the net assets of Allied's operations will be liquidated as
remaining orders in process are completed. The estimated completion date of the
net asset liquidation is the third quarter of 1998. The Allied facility will not
be disposed of as it will be used in the Company's facility consolidation
effort. The net assets of Allied of $3,789 are included in the March 31, 1998
consolidated balance sheet. Management believes the recorded liability for the
estimated loss on disposal of discontinued operations is adequate. The adequacy
of this liability is evaluated each quarter.
7
<PAGE> 8
ITEQ, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Operating losses during the phase out period have been included in the loss
on disposal of discontinued operations. Losses before taxes of $2,556 have been
incurred through March 31, 1998. The loss from discontinued operations included
in the statement of operations is reflected net of the effective income tax rate
for the applicable period. Interest expense has been allocated based on
intercompany debt balances. After-tax interest expense of $193 has been included
in the estimated loss on disposal. Discontinued operations have not been
separated in the consolidated statements of cash flows and, therefore, amounts
for certain captions will not agree with the respective consolidated statements
of operations.
NOTE 8 -- STOCK OFFERING
In May 1997, the Company sold approximately 5,058 shares of ITEQ common
stock. The primary use of the offering proceeds of approximately $31,795 was to
reduce debt incurred for the Company's acquisition program.
8
<PAGE> 9
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
GENERAL
Since its inception in 1990 the Company has experienced substantial growth
through a combination of strategic acquisitions and internal growth. Due to the
magnitude of these acquisitions and the integration of the acquired operations
with the Company's existing businesses, results of operations for prior periods
are not necessarily comparable with or indicative of results of operations for
current or future periods.
The Company records substantially all revenues using the
percentage-of-completion method. Under this method, the Company recognizes as
revenues that portion of the total contract price which the cost of work
completed to date bears to the estimated total cost of the work included in the
contract. Because contracts may extend over more than one fiscal period,
revisions of cost and profit estimates are made periodically and are reflected
in the accounting period in which they are determined. If the estimate of total
costs on a contract indicates a loss, the total anticipated loss is recognized
immediately. Contract costs include all direct material, labor and
subcontracting costs and those indirect costs related to contract performance,
such as supplies, tools and repairs.
The Company recognizes revenue from certain short-term contracts using the
completed contract method. Revenue is recognized when a project is substantially
complete. The contracts under this revenue recognition method are typically less
than three months in duration.
The Company historically has experienced quarterly fluctuations in its
operating results. Operating results in any quarter are dependent upon the
timing of equipment and system sales, which may vary considerably among periods.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1998 Compared to Three Months Ended March 31,
1997
Revenues
Revenues for the three months ended March 31, 1998 increased $9,604 to
$83,683 from $74,079 for the three months ended March 31, 1997 primarily due to
the May 1997 acquisition of Trusco Tank, Inc. ("Trusco") and the August 1997
acquisition of Exell, Inc. ("Exell").
Cost of Revenues
Cost of revenues for the three months ended March 31, 1998 increased $6,404
to $63,360 primarily due to the Trusco and Exell acquisitions.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $797 to $10,674
from $9,877 which was primarily attributable to the Trusco and Exell
acquisitions.
Depreciation and Amortization
Depreciation and amortization expense for the three months ended March 31,
1998 increased $223 to $1,941 primarily due to the Trusco and Exell
acquisitions.
Interest Expense, net
Interest expense for the three months ended March 31, 1998 and 1997 was
$1,591 and $1,857, respectively. The decrease in interest expense reflects the
application of the net proceeds of the May 1997 stock offering to reduce debt
and the refinancing of existing credit facilities in October 1997 in connection
with the merger with Astrotech International Corporation ("Astrotech").
9
<PAGE> 10
Income Taxes
The effective tax rate for the three months ended March 31, 1998 and 1997
was approximately 37% and 40%, respectively.
Discontinued Operations and Extraordinary Loss
During August 1997 and effective on August 31, 1997, management of ITEQ
adopted plans to discontinue certain of its low margin generic fabrication
operations at its Allied subsidiary.
Certain of the net assets of Allied's operations will be liquidated as
remaining orders in process are completed. The estimated completion date of the
net asset liquidation is the third quarter of 1998. The Allied facility will not
be disposed of as it will be used in the Company's facility consolidation
effort.
The loss from discontinued operations for the three months ended March 31,
1997 was $358, net of $174 income tax benefit.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Company's cash position was $5,958 compared with
$9,681 at December 31, 1997. Net working capital at March 31, 1998 was $68,738
compared to $64,531 at December 31, 1997.
The Company's existing capital resources consist of cash balances, cash
provided by its operating activities and funds available under its line of
credit. The Company's operating activities used $2,187 in cash during the three
months ended March 31, 1998.
The Company's cash requirements consist of its general working capital
needs, capital expenditures, obligations under its leases and indebtedness, and
capital required for future acquisitions. The Company's general working capital
requirements consist of salary costs and related overhead and the purchase price
of materials and components, and may also include subcontracts with respect to
which such costs are incurred. Management anticipates that the Company will make
capital expenditures of approximately $6,000 in 1998 as compared to
approximately $5,377 in 1997.
In November 1996, the Company amended its principal credit agreement to
increase its maximum borrowings in conjunction with the Ohmstede, Inc.
acquisition. The financing consisted of a $35,000 term loan and a $38,000
revolving line of credit facility. In May 1997, the Company sold approximately
5,058 shares of common stock and used the net proceeds (approximately $31,795)
to reduce debt. In addition to the bank financing, in November 1996, the Company
issued Senior Subordinated Notes ("Subordinated Notes") to two institutional
lenders in an aggregate amount of $15,000. The Subordinated Notes were scheduled
to mature November 18, 2003, and bore interest at an initial rate of 12%. As
additional consideration, the Subordinated Note holders received warrants to
purchase an aggregate of 1,760 shares of the Company's common stock at $5.10 per
share, subject to adjustment. The warrants may be exercised at any time prior to
expiration on November 18, 2003. Approximately $2,300 of warrant value was
reflected as equity and as debt discount that was being amortized as additional
interest expense over the seven year life of the Subordinated Notes. In 1997,
the Company repaid the Subordinated Notes and refinanced its then existing
revolving credit facility which resulted in an extraordinary charge of
approximately $3,080, net of an estimated tax benefit of $1,732.
In October 1997, in connection with the merger with Astrotech, the Company
refinanced its and Astrotech's existing credit facilities under a new
non-amortizing revolving credit facility with various financial institutions
with a commitment amount of up to $175,000 maturing in October 2002 and bearing
interest, at the Company's option, at BankBoston, N.A.'s ("BankBoston")
customary base rate or at BankBoston's Eurodollar rate plus, in either case, an
agreed upon margin ranging from 0% to 2.5% for the applicable base rate margin,
and from 1% to 1.75% for the applicable Eurodollar rate margin. The new credit
facility is secured by substantially all of the assets of the Company, a pledge
of the stock of the Company's domestic subsidiaries and guarantees entered into
by such subsidiaries.
The Company's principal credit facility requires the Company to maintain
certain levels of working capital and stockholders' equity and contains other
restrictive covenants. Such instruments also limit the
10
<PAGE> 11
ability of the Company to incur additional indebtedness and to make acquisitions
and certain investments. At March 31, 1998, the Company was in compliance with
the provisions of its loan agreements.
Except with respect to funding any future acquisitions, management believes
that funds available under its credit facilities, together with cash generated
from operations, will be sufficient to meet the Company's anticipated cash
requirements for 1998. Management further believes that the Company could obtain
additional capital to make acquisitions primarily through either issuances of
common or preferred stock or debt or lease financing, although no assurance can
be given with respect to whether such financing would be available when required
or whether such financing can be obtained on terms acceptable to the Company.
The Company is currently in the process of evaluating its computer software
programs and operating systems to ensure such programs and systems will be able
to process transactions in the year 2000. However, the Company does not expect
that such costs to modify its programs and systems will be material to its
financial condition or results of operations. The Company does not currently
have information concerning the year 2000 compliance of its suppliers and
customers. In the event the Company's significant suppliers or customers do not
successfully and timely achieve year 2000 compliance, the Company's operations
could be adversely affected.
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. All statements other than statements of
historical facts included in the preceding discussion regarding the Company's
financial position, business strategy, and plans of management for future
operations are forward-looking statements. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
11
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PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS:
<TABLE>
<C> <S>
3.1 -- Amended and Restated Certificate of Incorporation of the
Registrant. (Filed as Appendix E to the Joint Proxy
Statement/Prospectus of the Registrant and Astrotech on
October 3, 1997 and incorporated herein by reference).
3.2 -- Amended and Restated Bylaws of the Registrant. (Filed as
an exhibit to Form 10-Q for the quarter ended September
30, 1997 and incorporated herein by reference).
4.1 -- See Exhibits 3.1 and 3.2 for provisions of the
Certificate of Incorporation and Bylaws of the Registrant
defining the rights of holders of Common Stock.
4.2 -- Revolving Credit Agreement dated as of October 28, 1997
by and among the Registrant, the Guarantors and various
lending institutions including Deutsche Bank AG as
Documentation Agent and BankBoston, N.A. as Agent. (Filed
as an exhibit to Form 10-Q for the quarter ended
September 30, 1997 and incorporated herein by reference).
4.3 -- Warrant Agreement, dated November 18, 1996, between the
Registrant and International Mezzanine Capital, B.V.
("Mezzanine"). (Filed as an exhibit to Form 8-K dated
December 5, 1996 and incorporated herein by reference).
4.4 -- Warrant Agreement dated November 18, 1996, between the
Registrant and First Commerce Corporation ("First
Commerce")). (Filed as an exhibit to Form 8-K dated
December 5, 1996 and incorporated herein by reference).
4.5 -- Registration Rights Agreement dated November 18, 1996,
among the Registrant, Mezzanine, and First Commerce.
(Filed as an exhibit to Form 8-K dated December 5, 1996
and incorporated herein by reference).
4.6 -- Warrant Agreement, dated April 24, 1996, between the
Registrant and Sanders Morris Mundy, Inc. (Filed as an
exhibit to Form 10-Q for the quarter ended September 30,
1996 and incorporated herein by reference).
*27 -- Financial Data Schedule.
</TABLE>
- ---------------
* Filed herewith.
(b) REPORTS ON FORM 8-K.
The Company filed the following reports on Form 8-K during the first
quarter of 1998:
- Form 8-K dated January 20, 1998 with respect to the termination of the
purchase agreement with Matrix Service Company.
- Form 8-K dated March 9, 1998 with respect to the Company's review of
strategic alternatives to maximize shareholder value.
12
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ITEQ, Inc.
/s/ LAWRANCE W. MCAFEE
------------------------------------
Lawrance W. McAfee
Executive Vice President and
Chief Financial Officer
Date: May 11, 1998
/s/ KATHRYN S. HENDERSON
------------------------------------
Kathryn S. Henderson
Corporate Controller
Date: May 11, 1998
13
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
3.1 -- Amended and Restated Certificate of Incorporation of the
Registrant. (Filed as Appendix E to the Joint Proxy
Statement/Prospectus of the Registrant and Astrotech on
October 3, 1997 and incorporated herein by reference).
3.2 -- Amended and Restated Bylaws of the Registrant. (Filed as
an exhibit to Form 10-Q for the quarter ended September
30, 1997 and incorporated herein by reference).
4.1 -- See Exhibits 3.1 and 3.2 for provisions of the
Certificate of Incorporation and Bylaws of the Registrant
defining the rights of holders of Common Stock.
4.2 -- Revolving Credit Agreement dated as of October 28, 1997
by and among the Registrant, the Guarantors and various
lending institutions including Deutsche Bank AG as
Documentation Agent and BankBoston, N.A. as Agent. (Filed
as an exhibit to Form 10-Q for the quarter ended
September 30, 1997 and incorporated herein by reference).
4.3 -- Warrant Agreement, dated November 18, 1996, between the
Registrant and International Mezzanine Capital, B.V.
("Mezzanine"). (Filed as an exhibit to Form 8-K dated
December 5, 1996 and incorporated herein by reference).
4.4 -- Warrant Agreement dated November 18, 1996, between the
Registrant and First Commerce Corporation ("First
Commerce")). (Filed as an exhibit to Form 8-K dated
December 5, 1996 and incorporated herein by reference).
4.5 -- Registration Rights Agreement dated November 18, 1996,
among the Registrant, Mezzanine, and First Commerce.
(Filed as an exhibit to Form 8-K dated December 5, 1996
and incorporated herein by reference).
4.6 -- Warrant Agreement, dated April 24, 1996, between the
Registrant and Sanders Morris Mundy, Inc. (Filed as an
exhibit to Form 10-Q for the quarter ended September 30,
1996 and incorporated herein by reference).
*27 -- Financial Data Schedule.
</TABLE>
- ---------------
* Filed herewith.
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