SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10Q
Quarterly Report Under Section 13 or 15 (d)
Of the Securities Exchange Act of 1934
For the Quarter ended December 31, 2002
Commission File Number 0-10125
Radiant Technology Corporation
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(Exact name of registrant as specified in its charter)
California 95-2800355
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(State or other jurisdiction of (I.R.S Employer
incorporation or organization) identification number)
1335 South Acacia Avenue, Fullerton, CA 92831
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(Address of principal executive offices)(Zip Code)
(714) 991 - 0200
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(Registrant's Telephone number, including area code)
Inapplicable
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(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 ____
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, no par value 2,081,678
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(Class) (Outstanding at December 31, 2002)
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RADIANT TECHNOLOGY CORPORATION
INDEX
Part I Financial Information:...........................................Page No.
Condensed Balance Sheet- December, 2002
and September 30, 2002 (unaudited)...............................3
Condensed Statement of Operations - Three Months
Ended December 31, 2002 and 2001 (unaudited).....................4
Condensed Statement of Cash Flows - Three Months
Ended December 31, 2002 and 2001 (unaudited).....................5
Notes to Condensed Financial Statements (unaudited)................6
Management's Discussion and Analysis of Financial
Condition and Results of Operation..............................6-7-8
Part II Other Information:
Legal Proceedings and Exhibits.....................................8
Signature Page.....................................................9
2
RADIANT TECHNOLOGY CORPORATION
PART I FINANCIAL INFORMATION
CONDENSED BALANCE SHEETS
(UNAUDITED)
ASSETS
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December 31 September 30
2002 2002
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Current Assets
Cash $ 158,052 $ 2,069,784
Accounts receivable 548,363 449,162
Inventories 645,706 980,362
Prepaid expenses 22,461 31,841
Deferred income taxes 263,500 263,500
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Total Current Assets 1,638,082 3,794,649
Machinery and equipment 286,113 321,873
Other assets 12,748 11,670
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Total Assets $ 1,936,943 $ 4,128,192
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LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities
Short Term Debt $ - $ 1,916,000
Accounts payable 366,385 364,341
Accrued expenses 143,109 199,440
Customer deposits 319,920 159,509
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Total Current Liabilities 829,414 2,639,290
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Stockholders' Equity
Common stock, no par value 1,167,608 1,167,608
Retained earnings (60,079) 321,294
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Total stockholders' equity 1,107,529 1,488,902
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Total Liabilities and Stockholders' Equity $ 1,936,943 $ 4,128,192
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3
RADIANT TECHNOLOGY CORPORATION
PART I FINANCIAL INFORMATION-CONTINUED
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
December 31
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2002 2001
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Net sales $ 921,518 $ 655,139
Cost of sales 869,254 515,746
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Gross profit 52,264 139,393
Operating expenses:
Selling, general and administrative 396,982 486,453
Depreciation and amortization 36,473 31,046
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Total operating expenses 433,455 517,499
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Income (loss) from operations (381,191) (378,106)
Interest income, net (183) 6,238
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Income (loss) before tax provision (381,374) (371,868)
Provision for income taxes -- 800
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Net income (loss) $ (381,374) $ (372,668)
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Basic earning per share:
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Net income (loss) $ (0.18) $ (0.18)
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Diluted earning per share:
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Net income (loss) $ (0.18) $ (0.18)
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Basic weighted average shares outstanding 2,081,678 2,081,678
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Diluted weighted average shares outstanding 2,081,678 2,081,678
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RADIANT TECHNOLOGY CORPORATION
PART I FINANCIAL INFORMATION-CONTINUED
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three Months Ended
December 31
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2002 2001
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Cash flows from operating activities:
net income (loss) $ (381,374) $ (372,668)
Adjustments to reconcile income to net
cash from operating activities:
Depreciation and amortization 36,473 31,046
Changes in assets and liabilities:
Accounts receivable (99,201) (191,575)
Inventories 334,656 119,649
Prepaid expenses & other assets 7,589 (1,392)
Increase (decrease) in:
Accounts payable 2,044 (161,032)
Accrued expenses (56,330) (36,675)
Customer deposits 160,411 323,946
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Net cash provided by (used by) operating 4,268 (288,701)
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Cash flows used by investing activities:
Purchase of property and equipment -- (8,207)
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Cash flows from financing activities:
Short-term debt (1,916,000) --
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Net cash (used in) financing activities (1,916,000) --
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Net increase (decrease) in cash (1,911,732) (296,908)
Cash at beginning of period 2,069,784 1,118,630
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Cash at end of period $ 158,052 $ 821,722
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RADIANT TECHNOLOGY CORPORATION
PART I FINANCIAL INFORMATION - CONTINUED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR
DECEMBER 31, 2002
(UNAUDITED)
ITEM 1 - Notes
1. General
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The accompanying unaudited condensed financial statements of Radiant
Technology Corporation (the "Company") have been prepared in accordance
with the instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. These statements should be
read in conjunction with the consolidated financial statements and notes
thereto included in the Company's Form 10-K for the year ended September
30, 2002.
In the opinion of management, all adjustments, consisting of normal
recurring adjustments, considered necessary for the fair presentation have
been included. Operating results for interim periods are not necessarily
indicative of results expected for a full year.
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operation
All statements, other than statements of historical fact, included in this
Form 10-Q are, or may be deemed to be, "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934. Such forward-looking
statements involve assumptions, known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements contained in this Form 10-Q.
Overview
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As discussed in more detail throughout our MD&A:
o Our results of operations during the past seven quarters were adversely
affected by the sustained decline of the electronics markets. Backlog of
orders to ship have declined during fiscal 2002 and 2001 by 60% and 74%
respectively as compared the respective prior year. The significant
reduction in capital spending by our customers and aggressive pricing by
desperate competitors, among other factors contributed to this decline.
The Company's order backlog at December 31, 2002 was approximately
$676,000.
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ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations - Continued
o Our gross margins, which historically have been at near the 35% mark,
have declined over the past two years to 13.6% in the first quarter of
2003 from 24.1% for all of 2002 and 26.6% for all of 2001. The
significant decline in demand and coupled with the development of new
product lines has led to significant inventory charges and manufacturing
inefficiencies, which adversely affected our gross margin rates.
o Our cash position has also declined significantly as a result of the
operating losses in the first quarter of 2003 of $(381,374), $(756,284)
for all of 2002 and $(157,210) in 2001. Cash at the end of the first
quarter of 2003 is $158,052.
During this extended market weakness we have worked to improve our product
offering, improve manufacturing methods, strengthen our management staff
and aggressively pursue new markets. If capital spending does not improve
or improves at a slower pace than we anticipate, our revenues and
profitability will continue to be adversely affected.
Financial Condition, Liquidity and Capital Resources
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The Company's cash and equivalents decreased from $2,069,784 at September
30, 2002 to $158,052 at December 31, 2002. This decrease of $1,911,732 is
primarily attributable to the repayment of the short-term loan of
$1,916,000. The net loss of $(381,784) was offset by a reduction in working
capital of $349,169, plus depreciation of $36,473.
Management believes that planned actions for significant cost cuts,
aggressive collections of outstanding receivable balances, improved
manufacturing methods and improved inventory management systems will be
sufficient to provide adequate cash to fund anticipated working capital and
other cash needs during the remainder of the year.
Results of Operations
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Three Months Ended December 31, 2002
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Net Sales were $921,518 and $655,139 for the three months ended December
31, 2002 and 2001, respectively, or an increase of 41%. The increase in
revenues resulted principally from one shipment amounting to $309,000.
The cost of sales as a percentage of sales for the three months ended
December 31, 2002 was 94%, as compared to 79% in the prior year third
quarter. Although sales increased significantly in the quarter, the one
order that represented more than one-third of sales for the quarter was
produced at a loss, providing a significant affect on the current quarter
margins. This system included several newly designed features and higher
costs were incurred in the initial design and manufacture. Future systems
of this type will have profitable margins.
7
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations - Continued
Selling, general and administrative expenses were $285,706 in the current
quarter as compared to $486,453 in the year earlier period, a decrease of
41%. This decrease was mainly due to reduced payroll and related expenses
in engineering, research and development and sales and marketing.
Cash generated by operating activities was $4,268 and $(288,701) for the
three months ended December 31, 2002 and 2001 respectively. Cash flows from
operating losses for the three months ended December 31, 2002 and 2001 were
roughly equivalent $(381,374) and $(372,668) respectively, however, cash
provided by reductions in working capital levels in the quarter ended
December 31, 2002 were $349,169 as compared to $52,921 for the quarter
ended December 31, 2001.
RADIANT TECHNOLOGY CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 6. Reports on 8-K
None.
8
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.
RADIANT TECHNOLOGY CORPORATION
(Registrant)
Dated: February 11, 2003 /s/ L. R. McNamee
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Lawrence R. McNamee
Chairman of the Board,
Chief Executive Officer
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