U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
__________________
Date of Report (Date of earliest event reported):
May 14, 1998
MVSI, Inc.
(Exact name of registrant as specified in its charter)
__________________
Delaware 0-26614 54-1707718
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
8133 Leesburg Pike, Suite 750, Vienna, VA 22182
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(703) 356-5353
Former name or former address, if changed since last report:
n/a
<PAGE>
MVSI, INC.
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Changes in Control of Registrant.
None.
Item 2. Acquisition or Disposition of Assets.
None.
Item 3. Bankruptcy or Receivership.
None.
Item 4. Changes in Registrant's Certifying Accountant.
None.
Item 5. Other Events.
Registrant issued a press release, dated May 14, 1998, which
press release is attached hereto as Exhibit 1 and is
incorporated herein by reference as if set forth verbatim
in this Item 5.
Item 6. Resignation of Registrant's Directors.
None.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
Exhibit 1. Registrant's Press Release, dated May 14, 1998.
Item 8. Change in Fiscal Year.
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MVSI, INC.
---------------------
Date: June 23, 1998 By: /s/Paul W. Richter
President and Chief Operating
Officer, Director
<PAGE>
Exhibit 1:
[COMPANY LETTERHEAD]
FOR IMMEDIATE RELEASE
MVSI ANNOUNCES RESULTS FOR SECOND QUARTER FY 1998
MVSI, Inc. (Nasdaq Symbol: "MVSI"), a Washington, D.C. broad-based
technology company, announced today its financial results for its second
quarter of FY 1998. These results reflect the discontinuance as of
March 31, 1998 of MVS Modular Vision Systems, Inc., the Canadian subsidiary
of the Company.
With respect to continuing operations, revenues for the quarter were
$14,823,275 representing an increase of $6,660,648 or 82% compared to
$8,162,627 (restated) recorded in the second quarter of FY 1997. The
Company experienced a net loss of $359,294 as compared to net income
of $504,022 (restated) recorded in the second quarter FY 1997. A summary
table of financial results is set forth at the end of this Press Release.
For the six months ending March 31, 1998, revenues were $27,536,800
representing an increase of $12,614,133 or 85% from the $14,922,667 recorded
for the six months ending March 31, 1997.
The discontinuance of the MVS operations resulted in a one-time write
off of $4,479,822, net of taxes, and when coupled with the loss from
discontinued operations of $1,250,052 for the six months ended March 31,
1998, resulted in a total charge against earnings of $5,729,874.
Chairman and Chief Executive Officer Edward Ratkovich stated "We have
turned our business focus to software development and maintenance, especially
in Year 2000 (Y2K) remediation, testing and assessment, and to information
technologies (IT) services, in order to achieve higher profit margins and
profitability for the remainder of FY 1998 and beyond. We entered the
software development business in late 1997 with the acquisition of Technet
Computer Services, Inc. Since the acquisition, we have significantly
augmented Technet's considerable domestic and off-shore software programming
capabilities with personnel and hardware resources, particularly in Y2K. As
a result, Technet has been awarded several Y2K projects since the first of
the year, and we are now awaiting the outcome of a number of Y2K proposals
and bids recently submitted to clients for their consideration. In fact, we
are conducting discussions and submitting proposals on Y2K and other software
projects almost daily. According to our current experience, the demand for
Y2K services is growing dramatically as corporations and governments realize
that time and qualified resources to fix this problem are less with every
passing day. In addition to Y2K opportunities, Technet is experiencing a
growing demand for its SAP and PeopleSoft capabilities. We anticipate that
Technet will have over 100 software engineers, dedicated to SAP and
PeopleSoft software implementation projects, at work for corporate and
government customers by the fall of this year. The anticipated growth in
SAP and PeopleSoft work along with the anticipated demand for Technet's
considerable Y2K capabilities portends a bright future for Technet."
Chairman Ratkovich continued, "We are very confident that we are
pursuing the most profitable business lines and, we have the resources,
expertise and strategic plan to capitalize on it. We have either eliminated
or substantially reduced our exposure in those business lines with
continually decreasing profit margins or where we have been unable to
achieve acceptable profit margins. As a result, we believe that MVSI is
well poised to achieve profitability in the near future."
"In addition to the foregoing, Technet is teaming with other established
Y2K remediation companies to broaden our prospects for securing Y2K
remediation contracts for Technet in the U.S. and Canada. MVSI has also
retained a consulting firm in Ottawa to assist in identifying opportunities
for Y2K work with the Canadian Federal Government and Province of Ontario.
Technet will use the Company's Montreal facility as a software development
center for any Canadian Y2K projects. MVS software engineers will be
recruited for these projects."
"The Company's two computer products resellers, JMR Distributors, Inc.
and Expert, Inc., which are experiencing steadily decreasing margins in
their businesses, will be merged into our IT subsidiary, Socrates
Technologies, Inc.(Socrates) within the next 30 days. The new consolidated
companies will operate under the "Socrates Technologies" name and will
concentrate on the higher profit margin areas, such as technology training
and computer services, currently being promoted by Socrates. Socrates will
continue the reseller business as a secondary business line to its core IT
business, but will refocus the reseller businesses from wholesale
distribution to the more profitable business of retail sales to corporations
and governments."
"MVSI is supporting Socrates' aggressive strategy to expand its IT
business and markets. As part of the consolidation of the computer products
reseller subsidiaries into Socrates, Expert will move into a new 14,000 sq.
foot office, warehouse, service and training facility in Long Island City,
New York within the next 30 days, and will transition from a computer
hardware reseller to a one-stop IT services and products provider for
corporations and governments in the greater New York City area. This new
location will also serve as a base for further expansion by Socrates into
the New England area later this year. By the end of 1999, Socrates intends
to be a major IT provider in most of the major east coast metropolitan
markets. Socrates' recent award of a $10 million computer products and
services contract from a large corporation is evidence of our commitment
and growing success in penetrating the more profitable area of being a
major IT provider to corporations and governments," Chairman Ratkovich
concluded.
Effective March 31, 1998, MVSI has discontinued the unprofitable machine
vision operations of its Canadian subsidiary, MVS Modular Vision Systems,
Inc. (MVS). The ongoing financial crisis in the Far East market for MVS'
microcomputer chip inspection scanners has continued to produce losses at
MVS. As a result, MVSI management has concluded it can no longer jeopardize
the promising potential of its IT and software development businesses by
continuing to support MVS. The discontinuance of MVS operations will require
the completion of certain contractual obligations and shipment of ordered
systems.
Chairman Ratkovich stated "Although we continue to believe in the
potential of MVS, the long sales cycles for its welding systems, the collapse
of the Far East market for MVS inspection scanners and the higher profit
margins of software development and IT services and products argue for MVSI
to focus on software development and the IT business. These growing areas of
our business require more and more resources and manpower and we have been
forced, both by MVS' losses and the clear potential of our other business
lines, to make a choice between remaining in the machine vision business or
devoting our resources to the substantially greater profit potential of the
software development and IT businesses and discontinuing machine vision
operations. The best interests of our stockholders require us to focus on
those areas with the greatest potential for making profits. As part of the
discontinuance plan for MVS, we may sell some or all of its assets to recoup
part of our investment in MVS. As of the date of this press release, there
can no assurances that we will be able to sell any of MVS' assets or will
obtain consideration in any such sale that will be sufficient to recoup any
portion of our investment in MVS."
Statements made in this Press Release that are not historical or current
facts are "forward looking statements" made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995, as
amended. Actual risks and results may vary significantly based on a number
of factors, including, but not limited to: risks in products and
technological developments; market acceptance of new products and continuing
product demand; the impact of competitive products and pricing; and other
factors mentioned in the Company's current and future filings with the
Securities and Exchange Commission and public announcements.
For additional public information on MVSI, Inc., please contact
the Company at its principal executive offices at 8133 Leesburg Pike,
Suite 750, Vienna, Virginia 22182, Telephone (703) 356-5353 and (703)
356-5354 facsimile.
<PAGE>
<TABLE>
<CAPTION>
3 Mos. To: Mar.31'98 *Mar.31 '97
------------------------ ---------------------- ----------------------
<S> <C> <C>
Revenues 14,823,275 8,162,627
Inc. (Loss) fr. Contng. Ops. (359,294) 504,022
Discontd. Opers. (5,228,317) 104,081
Net Income (Loss) (5,587,611) 608,103
Shs. Earns.:
Fr. Contng. Opers.
Basic $(0.02) $0.05
Diluted $(0.02) $0.05
Discontd. Opers.
Basic $(0.33) $0.01
Diluted $(0.33) $0.01
Net Income (Loss)
Basic $(0.35) $0.06
Diluted $(0.35) $0.06
<FN>
<F1>
* Reclassified to reflect discontinued operations.
</FN>
</TABLE>
<TABLE>
<CAPTION>
6 Mos. To: Mar.31'98 *Mar.31 '97
------------------------ ----------------------- ----------------------
<S> <C> <C>
Revenues 27,536,800 14,922,667
Inc. (loss) fr. Contng. Ops: (421,298) 934,833
Discontd. Opers.: (5,729,874) 273,398
Net Income (Loss) (6,151,172) 1,208,231
Shs. Earns.:
Fr. Contng. Opers.:
Basic $(0.03) $0.09
Diluted $(0.03) $0.08
Discontd. Opers.
Basic $(0.40) $0.02
Diluted $(0.40) $0.02
Net Income (Loss)
Basic $(0.43) $0.11
Diluted $(0.43) $0.10
<FN>
<F1>
* Reclassified to reflect discontinued operations.
</FN>
</TABLE>
