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 March 31, 2003
Commission File Number 0-10125
Radiant Technology Corporation
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(Exact name of registrant as specified in its charter)
California 95-2800355
- ---------------------- ----------------------
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) identification number)
1335 South Acacia Avenue, Fullerton, CA 92831
(Address of principal executive offices)(Zip Code)
(714) 991 - 0200 (Registrant's
Telephone number, including area code)
Inapplicable
(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
- -------------------------- --------------------
(Class) (Outstanding at March 31, 2003)
1
RADIANT TECHNOLOGY CORPORATION
INDEX
Part I Financial Information:...........................................Page No.
Condensed Balance Sheet - March 31, 2003
and December, 2002 (unaudited)...................................3
Condensed Statement of Operations - Three Months
Ended March 31, 2003 and 2002 (unaudited)........................4
Condensed Statement of Operations - Six Months
Ended March 31, 2003 and 2002 (unaudited)........................5
Condensed Statement of Cash Flows - Three Months
Ended March 31, 2003 and 2002 (unaudited)........................6
Condensed Statement of Cash Flows - Six Months
Ended March 31, 2003 and 2002 (unaudited)........................7
Notes to Condensed Financial Statements (unaudited)................8
Management's Discussion and Analysis of Financial
Condition and Results of Operation...............................8-9
Part II Other Information:
Legal Proceedings and Exhibits....................................10
Signature Page....................................................10
2
RADIANT TECHNOLOGY CORPORATION
PART I FINANCIAL INFORMATION
CONDENSED BALANCE SHEETS
(UNAUDITED)
ASSETS
March 31, December 31,
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2003 2002
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Current Assets:
Cash and equivalents $60,730 $158,052
Accounts Receivable 181,301 548,363
Inventories 424,985 645,706
Prepaid expenses 55,043 22,461
Deferred taxes 263,519 263,500
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Total Current Assets 985,578 1,638,082
Property and equipment 280,734 286,113
Other Assets - 12,748
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Total Assets $1,266,312 $1,936,943
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LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts payable $331,668 $366,385
Accrued expenses 153,048 143,109
Customer deposits 337,797 319,920
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Total Liabilities 822,513 826,414
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Commitments & Contingencies - -
Stockholder's Equity
Common stock, no par value 1,167,608 1,167,608
Retained earnings (723,809) (60,079)
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Total Stockholders' Equity
Total Liabilities & Stockholders Equity $1,266,312 $1,936,943
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3
RADIANT TECHNOLOGY CORPORATION
PART I FINANCIAL INFORMATION-CONTINUED
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
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2003 2002
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Net sales $318,761 $603,776
Cost of sales 583,826 452,115
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Gross profit (265,065) 151,661
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Operating expenses:
Selling, general and administrative 362,353 305,426
Depreciation and amortization 36.630 31,191
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Total operating expenses 398,983 336,617
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Income/(loss) from operations (664,048) (184,956)
Interest income, net 320 2,712
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Income/(loss) before provision/(benefit)
for income taxes (663,728) (182,244)
Provision (benefit) for income taxes - -
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Net income/(loss) $(663,728) $(182,244)
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Basic earnings (loss) per share $(0.32) $(0.09)
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Diluted earnings (loss) per share $(0.32) $(0.09)
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Basic number of common shares outstanding 2,081,678 2,081,678
=============== ==============
Diluted number of common shares outstanding 2,081,678 2,081,678
=============== ==============
4
RADIANT TECHNOLOGY CORPORATION
PART I FINANCIAL INFORMATION-CONTINUED
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Six Months Ended March 31,
----------------------------------
2003 2002
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Net sales $1,240,279 $1,256,035
Cost of sales 1,453,080 956,048
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Gross profit (212,801) 299,987
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Operating expenses:
Selling, general and administrative 759,335 800,813
Depreciation and amortization 73,104 62,237
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Total operating expenses 832,439 863,050
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Income/(loss) from operations (1,045,240) (563,063)
Interest income, net 138 8,950
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Income/(loss) before provision/(benefit)
for income taxes (1,045,102) (554,113)
Provision (benefit) for income taxes - -
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Net income/(loss) $(1,045,102) $(554,113)
=============== ==============
Basic earnings (loss) per share $(0.50) $(0.27)
=============== ==============
Diluted earnings (loss) per share $(0.50) $(0.27)
=============== ==============
Basic number of common shares outstanding 2,081,678 2,081,678
=============== ==============
Diluted number of common shares outstanding 2,081,678 2,081,678
=============== ==============
5
RADIANT TECHNOLOGY CORPORATION
PART I FINANCIAL INFORMATION-CONTINUED
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three Months Ended March 31,
----------------------------------
2003 2002
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Cash flows from operating activities:
Net income/(loss) $(663,729) $(182,244)
Adjustments to reconcile net income/(loss) to
net cash provided by operating activities:
Depreciation and amortization 36,629 31,191
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 367,062 262,050
Inventory 220,721 (448,422)
Prepaid expenses & other assets (32,601) 38,343
(Increase) decrease in:
Accounts payable (34,717) 54,017
Accrued expenses 9,940 25,966
Customer deposits 17,877 (249,236)
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Net cash provided by/(used in) operating
activities (78,818) (468,335)
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Cash flows from investing activities
Capital expenditures (18,502) (11,312)
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Cash flows from financing activities
Issuance of common stock - -
Repayment of short term debt - -
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Net cash provided by financing activities
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Net increase (decrease) in cash and equivalents (97,320) (479,647)
Cash and equivalents, beginning of period 158,051 821,722
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Cash and equivalents, end of period $60,731 $342,075
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6
RADIANT TECHNOLOGY CORPORATION
PART I FINANCIAL INFORMATION-CONTINUED
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
Six Months Ended March 31,
-------------------------------
2003 2002
------------ ------------
Cash flows from operating activities:
Net income/(loss) $(1,045,103) $(554,913)
Adjustments to reconcile net income/(loss) to
net cash provided by operating activities:
Depreciation and amortization (70,368) 62,237
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 267,861 70,475
Inventory 555,377 (328,773)
Prepaid expenses & other assets (23,221) 16,152
Deferred Taxes 20,000
(Increase) decrease in:
Accounts payable (32,673) (107,015)
Accrued expenses (46,391) (10,709)
Customer deposits 178,288 74,710
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Net cash provided by/(used in) operating activities (216,230) (757,836)
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Cash flows from investing activities
Capital expenditures (33,385) (18,719)
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Cash flows from financing activities
Other Assets 156,562 -
Repayment of short term debt - -
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Net cash provided by financing activities
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Net increase (decrease) in cash and equivalents (93,053) (776,555)
Cash and equivalents, beginning of year 153,784 1,118,630
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Cash and equivalents, end of period $60,731 $342,075
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RADIANT TECHNOLOGY CORPORATION
PART I FINANCIAL INFORMATION - CONTINUED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR
MARCH 31, 2003
(UNAUDITED)
ITEM 1 - Notes
1. General
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
As discussed in more detail throughout our MD&A:
o Our results for the three months ended March 31, reflect the
continued weakness in capital spending in all of the markets we
serve. Workable backlog at the end of December was $565,000 but
improvement in March orders received and orders received at the
end of April have more than tripled backlog from December's
level. Increased quoting on new products and new markets in
addition to traditional markets suggest significant improvement
in market demand. It is, however, unclear as the moment if this
demand level will be maintained beyond the short term.
o The low level of shipments has significantly impacted our gross
margins. The monthly shipment volume has been well below
break-even levels and under utilized capacity in production has
led to high levels of manufacturing inefficiency.
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ITEM 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations - Continued
o In order to fund the sharply higher volume of units to be shipped
over the third quarter and the forecasted levels of shipments for
the fourth quarter we are actively pursuing debt financing is the
form of a revolving line of credit. As of this date we are very
encouraged by the reception we have received from lending
institutions.
However, if capital spending does not continue to improve or improves at a
slower pace than we anticipate, our revenues and profitability will
continue to be severely affected.
Financial Condition, Liquidity and Capital Resources
----------------------------------------------------
The Company's cash and plus receivables decreased from $706,414 at the end
of December to $242,032 at the end of March. This decrease of $464,382 is
primarily attributable to the collection of outstanding accounts
receivable.
Management believes that planned actions for obtaining a line of credit in
addition to 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. However, if we are unable to successfully obtain debt financing
and market volume does not continue to improve, further cost cutting
measures are planned.
Results of Operations
---------------------
Three Months Ended March 31, 2003
Net Sales were $318,761 and $603,776 for the three months ended March 31,
2003 and 2002, respectively. The decrease in revenues resulted principally
from the low levels of orders, which averaged less than $170k per month
through Feb.
The Gross Profit as a percentage of sales for the three months ended March
31, 2003 was (83%), as compared to 25% in the prior year second quarter. In
addition to the low volume of shipments, February shipments generated
exceptionally high, nonrecurring, unfavorable cost variances. The total
February variance accounts for 70% of the total negative gross margin over
the three months in quarter two.
Selling, general and administrative expenses were $362,353 in the current
quarter as compared to $305,426 in the year earlier period, an increase of
18%. This increase was due to higher payroll and related expenses in
engineering, research and development and sales and marketing.
Cash generated was ($97,320) and $(479,647) for the three months ended
March 31, 2003 and 2002 respectively. In the quarter ended March 2003
operating losses were ameliorated by cash generated from changes in working
capital compared to operating losses in the quarter ended March 31, 2002 in
addition to working capital changes that generated ($286,091) in cash.
9
RADIANT TECHNOLOGY CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
------------------
None.
Item 6. Reports on 8-K
Item 5. Other Events and Regulation FD Disclosure: On February 26,
2003, Radiant Technology Corporation filed a Form 15 with the SEC for
the purpose of terminating its duty to file reports under the
Securities Exchange Act of 1934 as amended.
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
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(Registrant)
Dated: May 20, 2003 /s/ L. R. McNamee
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Lawrence R. McNamee
Chairman of the Board,
Chief Executive Officer
10