SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[_x_] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 FOR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______to______.
Commission File Number: 0-22046
Bogen Communications International, Inc.
(Exact name of registrant as specified in its charter)
Delaware 38-3114641
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
50 Spring Street, Ramsey, New Jersey 07446
(Address of principal executive offices) (Zip Code)
(201) 934-8500
(Registrant's telephone number, including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has 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_____
As of July 15, 1996, 5,758,850 shares of the registrant's common stock, par
value $.001 per share, were outstanding.
1
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BOGEN COMMUNICATIONS INTERNATIONAL, INC.
AND SUBSIDIARIES
INDEX
PAGE
Facing Sheet 1
Index 2
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 1996
and December 31, 1995 (Unaudited) 3
Condensed Consolidated Statements of Operations for the three
and six months ended June 30, 1996 and 1995 (Unaudited) 5
Condensed Consolidated Statement of Changes in Stockholders'
Equity for the six months ended June 30, 1996 (Unaudited) 6
Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 1996 and 1995 (Unaudited) 7
Notes to Condensed Consolidated Financial Statements (Unaudited) 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. OTHER INFORMATION:
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
2
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BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
(UNAUDITED)
ASSETS June 30, December 31,
1996 1995
------- -------
CURRENT ASSETS:
Cash and cash equivalents $ 650 $ 1,276
Accounts receivable (less allowance for doubtful
accounts of $636 and $424 at June 30,
1996 and December 31, 1995, respectively) 5,687 4,992
Inventories 7,784 6,922
Prepaid expenses and other current assets 590 1,042
------- -------
TOTAL CURRENT ASSETS 14,711 14,232
Property and equipment, net 2,131 2,191
Goodwill and intangible assets, net 14,442 14,706
Other assets 149 175
------- -------
TOTAL ASSETS $31,433 $31,304
======= =======
The accompanying notes are an integral part of these condensed
consolidated statements.
3
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BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars, Except Share Amounts)
(UNAUDITED)
June 30, December 31,
LIABILITIES 1996 1995
------- -------
CURRENT LIABILITIES
Amounts outstanding under revolving credit agreements $ 5,947 $ 4,944
Accounts payable 3,085 2,861
Accrued expenses 2,825 3,610
Income taxes payable 1,016 1,353
Advances and notes payable to related parties 228 537
Notes payable to non-related parties 74 221
------- -------
TOTAL CURRENT LIABILITIES 13,175 13,526
Advances and notes payable to related parties 803 3,411
Other long term liabilities 604 674
Minority interest 653 550
------- -------
TOTAL LIABILITIES 15,235 18,161
------- -------
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock - .001 par value; 50,000,000 shares
authorized; 5,758,850 and 5,759,350 shares issued
and outstanding at June 30, 1996 and
December 31, 1995, respectively 6 6
Additional paid-in capital 21,774 19,175
Accumulated deficit (5,585) (6,185)
Cumulative currency translation adjustments 3 147
------- -------
TOTAL STOCKHOLDERS' EQUITY 16,198 13,143
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $31,433 $31,304
======= =======
The accompanying notes are an integral part of these
condensed consolidated statements.
4
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BOGEN COMMUNICATIONS INTERNATIONAL, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of Dollars, Except Share Amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net Sales $10,332 $11,306 $21,690 $22,152
Cost of goods sold 5,545 6,497 12,098 12,722
------ ------ ------ ------
Gross profit 4,787 4,809 9,592 9,430
Operating expenses:
Research and development 688 471 1,342 1,059
Selling, general and administrative 3,233 3,373 6,484 6,749
Amortization of goodwill and
intangible assets 109 107 220 224
------ ------ ------ ------
Income From Operations 757 858 1,546 1,398
Other Expenses:
Other Income --- (97) --- (97)
Interest expense, net 149 189 309 397
Interest expense to related parties 21 166 29 315
Minority interest (4) 116 103 167
------ ------ ------ ------
Net income (loss) before income taxes 591 484 1,105 616
Provision for income taxes 105 431 505 708
------ ------ ------ ------
Net income (loss) $486 $53 $600 $(92)
======= ======== ======= ========
NET INCOME (LOSS) PER COMMON SHARE $.08 $.03 $.10 $(.05)
==== ==== ==== ========
WEIGHTED AVERAGE NUMBER OF COMMON 5,758,921 1,925,000 5,758,303 1,925,000
========== =========== ============ ===========
SHARES OUTSTANDING
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated statements.
5
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BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands of Dollars, Except Share Amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK
------------
CUMULATIVE
FOREIGN
NUMBER ADDITIONAL CURRENCY
OF PAID-IN ACCUMULATED TRANSLATION
SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT
------ ------ ------- ------- ----------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 5,759,350 $6 $19,175 $(6,185) $147
Restructure of $3,000 related party note with
related interest of $102 2,602
Translation adjustments (144)
Repurchased and canceled common stock (500) (3)
Net income for the period 600
--------- -- ------- ------- --
Balance at June 30, 1996 5,758,850 $6 $21,774 $(5,585) $3
========= == ======= ======== ==
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated statements.
6
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BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(UNAUDITED)
FOR THE
SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995
------- -------
NET CASH FLOW PROVIDED BY (USED IN)
OPERATING ACTIVITIES $ (759) $ 1,497
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment and leasehold
improvements (383) (446)
Collection of notes receivable 15 18
------- -------
NET CASH FLOW USED IN INVESTING
ACTIVITIES (368) (428)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments to reacquire common stock (3) --
Amounts paid under notes payable (139) (725)
Amounts (paid) borrowed under revolving
credit agreements 1,100 (576)
Advances and notes payable - related parties (271) 377
------- -------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 687 (924)
------- -------
(DECREASE) INCREASE IN CASH (440) 145
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,276 148
Effects of Exchange Rate on Cash (186) 33
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 650 $ 326
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
NON CASH FINANCING ACTIVITIES:
Restructuring of $3,000 related party
note and related interest $ 2,602 --
The accompanying notes are an integral part of these
condensed consolidated statements.
7
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BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands of Dollars, Except Share Amounts)
(UNAUDITED)
1. Basis of Presentation
The condensed consolidated balance sheet of Bogen Communications
International, Inc. and Subsidiaries (the"Company") as of December 31,
1995 has been derived from the audited consolidated balance sheet
contained in the Company's Form 10-K and is presented for comparative
purposes. In the opinion of management, all significant adjustments
including normal recurring adjustments necessary to present fairly the
financial position, results of operations and cash flows for all periods
presented have been made. The results of operations for interim periods
are not necessarily indicative of the operating results for the full
year. Certain 1995 amounts have been reclassified to conform with the
1996 presentation.
Footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
omitted in accordance with the published rules and regulations of the
Securities and Exchange Commission. These condensed consolidated
financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-K for the
most recent fiscal year.
2. The Company
On August 21, 1995, the Company acquired a 99% interest in Bogen
Corporation ("Bogen") and a 67% interest in Speech Design GmbH ("Speech
Design") from Geotek Communications, Inc. ("Geotek"). The Company paid
Geotek $7,000 in cash, a convertible promissory note in the aggregate
principal amount of $3,000, (see note 5 "Amendment to Shareholder
Agreement") 3,700,000 shares of the Company's common stock and warrants
to acquire 200,000 shares of common stock of the Company. As a result,
Geotek acquired approximately 64% of the stock of the Company, thereby
giving it a controlling interest in the Company. Geotek, in addition,
contributed approximately $7,155 of intercompany indebtedness from Bogen
to equity as part of the transaction. Further, as contingent
consideration, the Company could be liable to pay Geotek an amount up to
$11,000, based upon a calculation of operating results of Bogen and
Speech Design during the two years after the acquisition. Based on
managements review of the earnout calculation, which takes into account
Speech Design and Bogen's operating results for the last two quarters of
1995, all of 1996 and the first two quarters of 1997, the anticipated
contingent consideration payment, if any, will not have a material
adverse effect on the Company's financial position and operating
results.
For accounting purposes, the acquisition is being treated as a joint
acquisition of the Company by Bogen and Speech Design, companies under
the common control of Geotek. The transaction is considered a reverse
acquisition with Geotek as the acquiror for accounting purposes. The
historical financial statements reflect the combination of Bogen and
Speech Design in a manner similar to a pooling of interests.
Accordingly, the historical financial statements reflect the combined
operations of Bogen and Speech Design prior to the transaction.
3. Summary of Significant Accounting Policies.
A. Principles of Consolidation
The consolidated financial statements include the accounts of
Bogen Communications International, Inc., Bogen and Speech
Design. All significant intercompany balances and transactions
have been eliminated in consolidation.
8
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BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands of Dollars)
(UNAUDITED)
B. Inventory, at lower of cost (first in, first out) or market, as
of June 30, 1996 and December 31, 1995, is as follows:
1996 1995
---- ----
Raw materials and supplies $ 2,046 $ 1,864
Work in progress 1,008 1,155
Finished goods 4,730 3,903
-------- -----
Total $ 7,784 $ 6,922
======== =======
C. Recently Issued Accounting Pronouncements
In March 1995, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of" which is
effective for fiscal years beginning after December 31, 1995. The
Company will adopt this standard later in 1996 and is presently
analyzing the impact of this new standard.
4. Income Tax
Income tax expense for 1996 and 1995 differs from the amount computed by
applying the U.S. federal statutory rates due to higher tax rates in
Europe for which no U.S. tax benefit has been provided and the
utilization of U.S. loss carryforwards.
5. Amendment to Stock Purchase Agreement
In May 1996, the Company and Geotek entered into an agreement in
principle to amend, effective January 1, 1996, the Stock Purchase
Agreement dated as of April 6, 1995. Pursuant to such agreement in
principle, (i) the $3,000 convertible promissory note payable by the
Company to Geotek, due February 1997, will be reduced and restructured
to a $500 non-convertible promissory note due July 1997, (ii) Geotek's
contingent obligation to pay up to $2,500 in cash (or, at its option,
make a ten year, 4% loan in the principal amount of up to $5,000) to the
Company if Speech Design and Bogen, in the aggregate, achieve certain
earning goals during the period from July 1, 1995 to June 30, 1997 will
be proportionally reduced, and (iii) during the period commencing on
February 21, 1997 and ending one year thereafter, Geotek will be granted
an option to purchase from the Company $3,000 worth of the Common Stock
of the Company at the discount rates provided in the $3,000 convertible
promissory note.
9
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CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This report contains "forward-looking" statements. The Company desires
to take advantage of the new "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 and is including this statement for the express
purpose of availing itself of the protections of such safe harbor with respect
to all of such forward-looking statements. Examples of forward-looking
statements include, but are not limited to (a) projections of revenues, income
or loss, earnings or loss per share, capital expenditures, dividends, capital
structure and other financial items, (b) statements of plans and objectives of
the Company or its management or Board of Directors, including the introduction
of new products, or estimates or predictions of actions by customers, suppliers,
competitors or regulating authorities, (c) statements of future economic
performance and (d) statements of assumptions underlying other statements and
statements about the Company or its business.
The Company's ability to predict projected results or to predict the
effect of any legislation or other pending events on the Company's operating
results is inherently uncertain. Therefore, the Company wishes to caution each
reader of this report to carefully consider specific factors, including price
competition, the decisions of customers, the actions of competitors, the effects
of government regulations, possible delays in the introduction of new products,
customer acceptance of products and services and other factors discussed herein,
because such factors in some cases have affected, and in the future (together
with other factors) could affect, the ability of the Company to achieve its
projected results and may cause actual results to differ materially from those
expressed herein.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
The financial statements and the following discussion include the accounts of
Bogen Corporation ("Bogen"), the Company's 99% owned subsidiary, and Speech
Design GmbH ("Speech Design"), its 67% owned subsidiary. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Results of Operations
Three Months Ended June 30, 1996 Compared to the Three Months Ended
June 30, 1995
Net Sales.
Net sales of $10,332,000 for the second quarter of 1996 decreased $974,000, or
9% from net sales of $11,306,000 in the second quarter of 1995. The decrease in
net sales is principally due to a decrease of $1,180,000 in net sales of the
Company's Office Automated Systems ("OAS") products. See "Phase-Out of OAS
Product Line." below. The decrease in net sales was partially offset by an
aggregate increase of $206,000 of core products net sales, which includes
Commercial Sound, Engineered Systems and Telco Product Lines.
Net sales for Commercial Sound products remained constant at approximately $2.2
million for the second quarter of 1996 compared to the same period of 1995. Net
sales of the Engineered System line of products increased to $1,853,000 for the
quarter ended June 30, 1996, a 13% increase from net sales of $1,645,000 for the
quarter ended June 30, 1995.
Telco net sales remained constant at approximately $6.1 million for the second
quarter of 1996 compared to the same period of 1995. The Telco product line is
the only product line distributed by both Bogen and Speech Design. Domestic
Telco sales increased $321,000, or 12% over the comparable period in 1995.
Foreign Telco sales decreased by $331,000, or 10% over the comparable period in
1995.
Net sales for the OAS product line for the second quarter of 1996 were $178,000,
a decrease of $1,180,000, or 87% from sales of $1,358,000 for the comparable
period of 1995. See "Phase-Out of OAS Product Line", below.
10
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Gross Profit.
Gross profit as a percentage of total net sales for the quarter ended June 30,
1996 was 46% compared to 43% for the comparable period in 1995. The increase in
gross profit margin is attributed to a change in product mix resulting from the
phase-out of the OAS product line, which had a significantly lower gross profit
margin than the Company's other products. OAS net sales comprised 2% of net
sales during the quarter ended June 30, 1996, compared to 12% of net sales for
the comparable period in 1995.
Selling, General and Administrative Expenses.
Selling, General and Administrative expenses (SG&A) decreased in absolute
dollars and remained relatively unchanged as a percentage of sales for the
second quarter of 1996 as compared to the second quarter of 1995. SG&A was
$3,233,000 or 31% of net sales for the second quarter of 1996 as compared to
$3,373,000 or 30% for the second quarter of 1995. The decrease of $140,000 is
primarily attributed to the reduction in marketing expense related to the OAS
product line.
Research and Development.
Research and Development expense ("R&D") was $688,000, or 7% of net sales for
the second quarter of 1996, compared to 471,000, or 4% of net sales for the
second quarter of 1995. This represents a $217,000, or 46% increase from 1995,
which is attributed to higher staff levels and increased levels of activity in
connection with the development of new products. The Company's R&D programs are
designed to efficiently introduce innovative products in a timely manner.
Interest Expense
Interest expense in the second quarter of 1996 was $170,000, or 2% of net sales
compared to $355,000, or 3% of net sales in 1995. The $185,000, or 52% decrease
is primarily attributable to a reduction in notes payable to Geotek that were
contributed to equity in August of 1995, in connection with the Company's
acquisition of Bogen.
Taxes on Income.
Speech Design incurred approximately $105,000 in foreign taxes, a $326,000
decrease from $431,000 in the second quarter of 1995. This decrease is
attributed to a reduction in Speech Design's second quarter earnings as compared
to the second quarter of 1995. The decrease in Speech Design's earnings is
primarily attributable to an increase in SG&A expenses associated with the roll
out of a new product and costs associated with expansion into new geographic
markets.
Phase-Out of OAS Product Line.
In December 1995, the Company's management decided to phase-out the OAS product
line. This decision was based on the intense competition that the Company faced
from local telephone companies and answering service companies, both of which
offer central voice mail services. The Company's OAS product line competed with
products that were frequently offered at a lower retail price than the Company's
products. In addition, competitors' products benefitted from better brand
recognition in the marketplace, which is dominated by AT&T, Panasonic and
PhoneMate. The Company anticipates the phase-out will be completed during the
third quarter of 1996. However, there can be no assurance that the phase-out
will not require more time to complete.
Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995
Net Sales
Net sales in the first six months of 1996 of $21,690,000 decreased by $462,000,
or 2% from net sales of $22,152,000 in the first six months of 1995. The
decrease in net sales is primarily due to a $1,766,000, or 59% decrease in net
sales of the OAS product line, precipitated by the Company's decision to
phase-out this product line. This decrease, however, was partially offset by
strong growth in net sales of the Company's core product line which resulted in
a $1,303,000, or 7% increase over net sales of such products during the
comparable period of 1995.
11
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Gross Profit
Gross profit in the first six months of 1996 increased $162,000, or 2% and was
44% of sales compared to 42% of sales for the comparable period in 1995. The
increase in gross profit margin is attributed to a change in product mix
resulting from the phase-out of the OAS product line, which had a significantly
lower gross profit margin than the Company's other products. OAS net sales
comprised 6% of total net sales for the six months ended June 30, 1996, compared
to 14% of net sales in the comparable period in 1995.
Selling, General and Administrative Expenses
SG&A of $6,484,000 in the first six months of 1996 decreased $265,000, or 4%
from SG&A of $6,749,000 in the comparable period of 1995. The decline is
primarily attributed to a reduction in selling and marketing expense related to
the OAS product line.
Research and Development
R&D expense of $1,342,000 in the first six months of 1996 increased $283,000, or
27% over R&D expense of $1,059,000 in the comparable period of 1995, due to
higher staff levels and increased levels of activity in connection with the
development of new products. The Company intends to continue to strengthen its
core product line by continuing to introduce innovative products designed to
better meet the needs of its client base. There can be no assurance that the
Company will develop such products in a cost-effective manner, on a timely
basis, or at all.
Interest Expense
Interest expense in the first six months of 1996 was $338,000 compared to
$712,000, for the six months ended June 30, 1995. The decrease of $374,000, or
53% is primarily attributed to a reduction in notes payable to Geotek that were
contributed to equity in August of 1995 in connection with the acquisition of
Bogen.
Taxes on Income
Speech Design incurred approximately $505,000 in foreign taxes, a decrease of
$203,000, or 29% from $708,000 in the comparable period in 1995. The decrease is
attributed to a reduction in Speech Design's earnings during the six months
ended June 30, 1996, at the Company's expected effective tax rate. The decrease
in Speech Design's earnings is primarily attributed to higher SG&A expense
associated with the roll out of a new product and the expansion into new
geographic markets.
Liquidity and Capital Resources
The following discussion of liquidity and capital resources, among other things,
compares the Company's financial and cash position as of June 30, 1996 to the
Company's financial and cash position as of December 31, 1995.
During the six months ended June 30, 1996, the Company focused its efforts on
long-term growth by strengthening profitable product lines while continuing the
phase-out of the OAS product line. Cash utilization focused on current working
capital requirements, the paydown of related party debt and subordinated notes,
and the purchase of equipment and leasehold improvements.
The Company's operating activities used $759,000 of cash. The Company's net
income of $600,000 included net non-cash charges of $374,000, which consisted of
(i) depreciation and amortization of $585,000, (ii) a reduction of inventory
reserves of $1,276,000 (of which $1,196,000 relates to the OAS product line),
(iii) loss from minority interest of consolidated subsidiaries of $103,000 and
(iv) a $214,000 increase in reserves for bad debt. Further, net changes in
operational assets and liabilities used $985,000 of cash.
12
<PAGE>
Net cash flows used in investing activities of $368,000 was used principally for
the purchase of equipment and leasehold improvements.
Cash flows from financing activities include cash used to repay (i) related
parties advances and notes of $271,000, (ii) notes payable of $139,000, (iii)
net borrowings under revolving credit agreements of $1,100,000, and (iv) other
items amounting to $3,000, for a net usage of $687,000.
As of June 30, 1996, the Company's total liabilities were $15,235,000 of which
$13,175,000 was due and payable within one year of June 30, 1996. Such
indebtedness included loans from third parties and loans and advances from
Geotek.
In August 1995, Bogen extended for a two year term through August 1997, its $10
million senior credit agreement. The line is secured by substantially all assets
of Bogen and is guaranteed by Geotek. Advances to Bogen are made based on a
percentage of accounts receivable and inventory. As of June 30, 1996, Bogen had
borrowings of $4,142,000 and the unutilized credit line availability was
$170,000. Also in August 1995, Bogen established a two year working capital line
of credit with Geotek, in the aggregate amount of $2 million. At June 30, 1996
Bogen had no borrowings outstanding under the working capital line.
As of June 30, 1996, Speech Design had short term lines of credit and overdraft
facilities of $3,241,000 available. Short term borrowings under such facilites
amounted to $2,233,000. Speech Design's unutilized credit line availability was
$1,008,000 at June 30, 1996.
In May 1996, the Company and Geotek entered into an agreement in principle to
amend, effective January 1, 1996, the Stock Purchase Agreement dated as of April
6, 1995. As part of such agreement in principle, the initial $3,000,000
convertible note from the Company to Geotek will be restructured to a $500,000
note bearing interest as stated in the original note. The agreement in principle
is more fully described in Footnote 5 to the accompanying financial statements.
The Company believes that it has adequate liquidity to finance its ongoing
activities.
13
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EXHIBITS
Item 5. OTHER INFORMATION
The Company has appointed Yoav M. Cohen (39) as Chief Financial
Officer and Secretary, effective August 15, 1996. Mr. Cohen
replaces Dov Gal, who is returning to Israel to pursue other
opportunities. Mr. Cohen joins Bogen from Target Capital Group
LLC of Garden City, NY, where he was Chief Financial Officer and
Managing Director of FEMI International Limited, a Target
subsidiary. Mr. Cohen brings to Bogen significant expertise in
international finance, information systems management, budgeting
and cash management. Previously, Mr. Cohen was Corporate Vice
President/Chief Financial Officer and MIS Director of Taro
Pharmaceutical Industries Ltd. Mr. Cohen began his career with
Marbrook Corporation and served later with CitiCorp/Citibank as
Assistant Vice President/Controller and with Bankers Trust
Company, where he was Vice President/Controller for Global
Investment Bank. He holds an M.B.A. in international finance and
a B.B.A. in economics and finance from Baruch College in New
York.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are included herein:
10.1 Agreement in principle between the Company and Geotek
Communications, Inc., dated as of May 8, 1996, to
amend the Stock Purchase Agreement between the
parties, dated as of April 6, 1995.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
quarter ended June 30, 1996.
14
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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.
BOGEN COMMUNICATIONS INTERNATIONAL, INC.
(Registrant)
Date: August 14, 1996 By: /s/ Zvi Peled
-------------------
Name: Zvi Peled
Title:President/CEO
Date: August 14, 1996 By: /s/ Dov Gal
------------------
Name: Dov Gal
Title:Chief Financial Officer
15
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EXHIBIT INDEX
Exhibit No.
10.1 Agreement in Principle between the Company and Geotek
Communications, Inc., dated as of May 8, 1996, to amend
the Stock Purchase Agreement between the parties, dated as
of April 6, 1995.
27.1 Financial Data Schedule
16
Exhibit 10.1
17
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GEOTEK COMMUNICATIONS, INC.
20 Craig Road
Montvale, New Jersey 07645
May 8, 1996
Mr. Zvi Peled
President & Chief Executive Officer
Bogen Communications International, Inc.
50 Spring Street
Ramsey, NJ 07446-0575
Dear Zvi:
In connection with the Stock Purchase Agreement dated April 6, 1995, between
Geotek Communications, Inc. ("Geotek"), and European Gateway Acquisition Corp.
("Agreement"), please sign below to confirm our intent to amend the Agreement,
as of January 1, 1996, to reflect (1) the $3 million Convertible Promissory Note
executed in favor of Geotek as part of the "Initial Cash Requirement" referenced
in the Agreement will be reduced to a $500,000 Non Convertible Note due July
1997, (2) for purposes of calculation of post closing price adjustment formulas,
the $10 million figure will be reduced to $7.5 million, (3) Geotek will have an
option to purchase $3 million worth of common stock of Bogen Communications
International, Inc. Based on the percentage of the value of such common stock as
measured over a twenty day trading period prior to the exercise date, as
described below.
Date Percentage
---- ----------
2/21/95-2/20/96 100.0%
2/21/96-5/20/96 85 0%
5/21/96-8/20/96 82.5%
8/21/96-11/20/96 80.0%
11/21/96-2/20/97 75.0%
2/21/97-10/31/97 65.0%
Sincerely,
/s/ Yoram Bibring
- -----------------
Yoram Bibring
Executive Vice President and
Chief Operating Officer
AGREED AND ACCEPTED
/s/ Zvi Peled /s/ Yoav Stern /s/ Joram Rosenfeld
- ------------- -------------- -------------------
/s/ David Mitchell
------------------
18
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