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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended June 30, 2003 Commission File Number 0-8623
ROBOTIC VISION SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 11-2400145
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
486 AMHERST STREET, NASHUA, NH 03063
(Address of principal executive offices)
Registrant's telephone number, including area code (603) 598-8400
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 twelve 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 [ ]
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
Number of shares of common stock outstanding as of August 1, 2003 63,085,864
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE)
JUNE 30, SEPTEMBER 30,
2003 2002
---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 783 $ 446
Accounts receivable, net 3,422 3,560
Inventories 2,569 4,678
Prepaid expenses and other current assets 840 812
Assets of discontinued operations 24,452 38,475
---------- ----------
Total current assets 32,066 47,971
Plant and equipment, net 659 1,433
Goodwill 1,554 1,554
Software development costs, net 3,008 3,438
Other assets 2,189 2,493
---------- ----------
$ 39,476 $ 56,889
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Revolving credit facility $ 9,986 $ 7,132
Notes payable and current portion of long-term debt 6,245 2,364
Accounts payable current 1,997 2,893
Accounts payable past-due 2,875 1,699
Accrued expenses and other current liabilities 5,800 5,408
Deferred gross profit 317 5
Liabilities of discontinued operations 24,769 22,269
---------- ----------
Total current liabilities 51,989 41,770
Long-term debt 447 1,882
---------- ----------
Total liabilities 52,436 43,652
Commitments and contingencies -- --
Stockholders' Equity:
Common stock, $.01 par value; shares authorized 100,000
shares, issued and outstanding; June 30, 2003 - 62,673
and September 30, 2002 - 60,657 627 607
Additional paid-in capital 293,692 292,990
Accumulated deficit (305,600) (278,798)
Accumulated other comprehensive loss (1,679) (1,562)
---------- ----------
Total stockholders' equity (12,960) 13,237
---------- ----------
$ 39,476 $ 56,889
========== ==========
See notes to consolidated financial statements
2
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ---------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenues $ 5,093 $ 4,898 $ 13,823 $ 20,231
Cost of revenues 3,061 2,657 8,066 10,415
---------- ---------- ---------- ----------
Gross profit 2,032 2,241 5,757 9,816
---------- ---------- ---------- ----------
Operating costs and expenses:
Research and development expenses 1,108 1,441 3,137 4,865
Selling, general and administrative expenses 4,479 4,770 13,350 16,133
Gain on sale of assets (350) -- (350) (6,935)
Severance and other charges -- 356 309 382
---------- ---------- ---------- ----------
Loss income from operations (3,205) (4,326) (10,689) (4,629)
Interest expense, net (285) (223) (778) (691)
---------- ---------- ---------- ----------
Loss from continuing operations (3,490) (4,549) (11,467) (5,320)
Loss from discontinued operations (961) (5,443) (16,350) (16,829)
---------- ---------- ---------- ----------
Loss before provision for income taxes (4,451) (9,992) (27,817) (22,149)
Provision for income taxes -- -- -- --
---------- ---------- ---------- ----------
Loss before extraordinary items (4,451) (9,992) (27,817) (22,149)
Extraordinary gain from legal settlement 1,000 -- 1,000 --
Net loss $ (3,451) $ (9,992) $ (26,817) $ (22,149)
========== ========== ========== ==========
Per Share:
Loss income from continuing operations:
Basic $ (0.06) $ (0.08) $ (0.19) $ (0.12)
========== ========== ========== ==========
Diluted $ (0.06) $ (0.08) $ (0.19) $ (0.12)
========== ========== ========== ==========
Loss from discontinued operations:
Basic $ (0.02) $ (0.10) $ (0.27) $ (0.36)
========== ========== ========== ==========
Diluted $ (0.02) $ (0.10) $ (0.27) $ (0.36)
========== ========== ========== ==========
Gain from extraordinary item:
Basic $ 0.02 $ -- $ 0.02 $ --
========== ========== ========== ==========
Diluted $ 0.02 $ -- $ 0.02 $ --
========== ========== ========== ==========
Net loss:
Basic $ (0.06) $ (0.18) $ (0.44) $ (0.48)
========== ========== ========== ==========
Diluted $ (0.06) $ (0.18) $ (0.44) $ (0.48)
========== ========== ========== ==========
Weighted Average Shares
Basic 61,308 56,298 61,129 46,452
Diluted 61,308 56,298 61,129 46,452
See notes to consolidated financial statements
3
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)
(IN THOUSANDS)
NINE MONTHS
ENDED JUNE 30,
---------------------------
2003 2002
---------- ----------
OPERATING ACTIVITIES:
Net loss $ (11,467) $ (5,320)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization 1,939 2,639
Non cash restructuring 94 --
Issuance of warrants and shares in lieu of cash 93 39
Issuance of shares in exchange for debt 556 --
Bad debt provision 293 --
Extraordinary gain from settlement 1,000 --
Warranty provision 21 99
Gain on sale of assets (350) (6,935)
Changes in operating assets and liabilities (net of effects of business
acquired and assets sold)
Accounts receivable (155) 1,917
Inventories 2,109 (674)
Prepaid expenses and other current assets (28) 192
Other assets (44) (211)
Accounts payable current (896) (491)
Accounts payable past-due 1,176 (627)
Accrued expenses and other current liabilities 307 (947)
Deferred gross profit 312 --
---------- ----------
Net cash used in continuing operating activities (5,040) (10,319)
Net cash provided by used in operating activities of discontinued Operations 173 (15,538)
---------- ----------
Net cash used in operating activities (4,867) (25,857)
INVESTING ACTIVITIES:
Additions to plant and equipment, net (21) (234)
Additions to software development costs (461) (356)
Proceeds from sale of assets 350 10,189
---------- ----------
Net cash (used in) provided by investing activities (132) 9,599
---------- ----------
FINANCING ACTIVITIES:
Issuance of convertible note 500 --
Issuance of promissory note 2,000 --
Proceeds from private placement of common stock, net of offering costs -- 13,591
Net proceeds from revolving credit facility 2,854 295
Repayment of long-term borrowings -- (756)
---------- ----------
Net cash provided by financing activities 5,354 13,130
---------- ----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (18) (86)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS 337 (3,214)
Beginning of period 446 3,887
========== ==========
End of period $ 783 $ 673
========== ==========
Supplemental Cash Flow Information:
Interest paid $ 481 $ 694
========== ==========
Taxes paid $ 43 $ 91
========== ==========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Cashless exercise of prepaid warrants for 11,921 shares of common stock $ -- $ 7,067
========== ==========
Issuance of 2,433 shares of common stock in payment of accrued warrant premium $ -- $ 1,951
========== ==========
See notes to consolidated financial statements
4
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. BUSINESS OVERVIEW AND GOING CONCERN CONSIDERATIONS
The consolidated balance sheet of Robotic Vision Systems, Inc. and its
subsidiaries (the "Company") as of June 30, 2003, the consolidated statements of
operations for the three and nine month periods ended June 30, 2003 and 2002 and
the consolidated statements of cash flows for the nine month periods ended June
30, 2003 and 2002 have been prepared by the Company, without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial condition, results of
operations and cash flows at June 30, 2003 and for all periods presented have
been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It is
suggested that these consolidated financial statements be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's annual report on Form 10-K for the year ended September 30, 2002. The
operating results for the three and nine months ended June 30, 2003 are not
necessarily indicative of the operating results for the full year.
Rule 10-01(d) of Regulation S-X requires that interim financial statements
included in quarterly reports on Form 10-Q be reviewed by an independent public
accountant in accordance with specified standards and procedures prior to the
filing of such quarterly report with the Securities and Exchange Commission. On
June 20, 2003, Deloitte & Touche, LLP resigned as the Company's independent
accountants and, therefore no independent public accountant has reviewed the
Company's interim financial statements included in this quarterly report on Form
10-Q. The Company is in discussions with independent public accounting firms to
engage a successor independent accountant.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. However, because of continuing
negative cash flow, limited credit facilities, and the uncertainty of the sale
of the Company's Semiconductor Equipment Group ("SEG"), there is no certainty
that the Company will have the financial resources to continue in business. The
Company has incurred operating losses for fiscal 2002 and 2001 amounting to
$40,539 and $83,226, respectively, and negative cash flows from operations for
fiscal 2002, 2001 and 2000 amounting to $25,905, $12,584 and $21,222,
respectively. In addition, the Company was not as of June 30, 2003, in
compliance with certain covenants of its revolving credit facility, which was
due to expire on April 28, 2003. The termination date has been extended five
times by the lender, the latest of which extends the facility termination date
to August 31, 2003, subject to the Company meeting certain conditions. Further,
the Company has debt payments due which relate to acquisitions the Company has
made. These conditions raise substantial doubt about the Company's ability to
continue as a going concern.
The Company is executing a plan to address its financial needs. The
Company recognizes that it cannot continue to sustain the losses of both its SEG
and Acuity CiMatrix Division. Accordingly, during November 2002, the Company
adopted a formal plan to sell SEG. Accordingly, the Consolidated Statements of
Operations have been reclassified to present the results of SEG separately from
continuing operations. Furthermore, the assets and liabilities of SEG are
classified separately under discontinued operations on the Consolidated Balance
Sheets (see Note 9). Also, the Consolidated Statements of Cash Flows classify
separately the cash usage from discontinued operations. The Company no longer
will present segment information, as the continuing Acuity CiMatrix business is
its only segment.
On April 11, 2003, the Company entered into a Settlement and Release
Agreement with a major customer, which provided for the release of certain
claims among the parties and the payment of $1,000 to the Company. On the same
date, the Company entered into a Loan Agreement with this customer ("Lender"),
which provided for the loan of $4,000 to the Company, in two tranches, subject
to the conditions of each closing. The first closing occurred on April 11, 2003,
at which time the Company delivered to Lender a secured promissory note in the
amount of $2,000 with a maturity date of April 11, 2004, bearing an interest
rate of 10%. The second closing for the delivery of a separate promissory note
is subject to terms and conditions.
On April 17, 2003, the Company engaged the services of The U-Group LLC,
for the purposes of providing management services to SEG. The U-Group is
comprised of executives with significant semiconductor capital equipment
industry experience. The Company has charged The U-Group with restoring SEG's
profitability, improving SEG's balance sheet, and restructuring SEG's debt.
5
As of June 30, 2003, the Company came to agreement with certain suppliers to
SEG, extinguishing $1,488 of past-due accounts payable balances owed to these
vendors and in exchange, the Company will issue 1,257,395 shares of common
stock. This debt restructuring also included the cancellation of certain
purchase order commitments of the Company totaling approximately $2,340. The
Company is in continued discussions with other suppliers regarding the exchange
of debt for common stock. The Company believes that these steps will enhance the
prospects for an eventual sale of SEG at a higher price than would otherwise be
obtained.
The Company has not altered its belief that the sale of SEG is in the best
interests of shareholders, nor has the Company changed its desire to consummate
a sale of SEG at the earliest date. The Company has determined, however, that
SEG can be made to be both profitable and cash-flow positive. As a result, the
Company believes that the timing of a sale can be adjusted to provide a price
that more closely reflects SEG's value. The Company is currently in discussions
with prospective acquirers of SEG.
The sale of SEG, if completed, is expected to result in sufficient
proceeds to pay down the Company's debt, reduce accounts payable, and provide
working capital for the Company's remaining businesses, however, no assurance
can be given that SEG will be sold at a price, or on sufficient terms, to allow
for such a result. Furthermore it cannot be assured that any further extensions
to the Company's credit facility will be granted or a new credit facility
established with a new lender. Thus, the Company's financial planning must
include a replacement of its current revolving credit agreement, additional
equity financing or generation of sufficient working capital to operate without
a credit facility. The Company is in discussions with several alternative
lenders and believes it will complete a lending agreement within the next 30
days.
Because the timing and proceeds of a prospective sale of SEG is uncertain,
the Company recognizes that it will likely require a supplemental infusion of
capital. This capital infusion may be required either for some short-term period
prior to the completion of a sale of the division, or for long-term
self-sufficiency of working capital. To that end, on December 4, 2002, Pat V.
Costa, the Company's Chairman, President and CEO, loaned the Company $500 and
the Company issued a 9% Convertible Senior Note. The Company has also retained
an investment bank to secure additional equity for the company through a private
placement of the Company's common stock. The securities that will be offered in
this private placement will not be, and have not been, registered under the
Securities Act of 1933, and may not be offered or sold in the United States
absent registration under the Securities Act or an applicable exemption from
such registration. The Company's plan also calls for continued actions to
control operating expenses, inventory levels, and capital expenses, as well as
to manage accounts payable and accounts receivable to enhance cash flow.
If the Company does not sell SEG, it may not have sufficient working
capital to continue in business. Even if the Company were to complete such a
sale, there can be no assurance that the proceeds of a sale will be sufficient
to finance the Company's remaining businesses. In that event, the Company would
be forced either to seek additional financing or to sell some or all of the
remaining product lines of Acuity CiMatrix.
2. INVENTORIES
Inventories consisted of the following:
JUNE 30, 2003 SEPTEMBER 30, 2002
------------- ------------------
Raw Materials $ 920 $ 2,214
Work-in-Process 699 927
Finished Goods 950 1,537
-------- --------
Total $ 2,569 $ 4,678
======== ========
Inventory on consignment was $0 and $84 at June 30, 2003 and September 30,
2002, respectively.
3. EARNINGS PER SHARE
Basic net loss per share is computed using the weighted average number of shares
outstanding during each period. Diluted net income (loss) per share reflects the
effect of the Company's outstanding stock options and warrants (using the
treasury stock method), except where such options and warrants would be
anti-dilutive. The calculations of net loss per share for the three and nine
months ended June 30, 2003 and 2002 are as follows:
6
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
2003 2002 2003 2002
-------- -------- -------- --------
BASIC AND DILUTED EPS
Loss from continuing operations $ (3,490) $ (4,549) $(11,467) $ (5,320)
Premium on warrants (11) (15) (13) (213)
Common stock dividend -- -- (18) --
-------- -------- -------- --------
Loss from continuing operations - basic numerator (3,501) (4,564) (11,498) (5,533)
Loss from discontinued operations - basic numerator (961) (5,443) (16,350) (16,829)
-------- -------- -------- --------
Gain from extraordinary item - basic numerator 1,000 -- 1,000 --
Net loss - basic numerator (3,462) (10,007) (26,848) (22,362)
Weighted average number of common shares - basic denominator 61,308 56,298 61,129 46,452
-------- -------- -------- --------
Per Share:
Loss from continuing operations - basic $ (0.06) $ (0.08) $ (0.19) $ (0.12)
======== ======== ======== ========
Loss from discontinued operations - basic $ (0.02) $ (0.10) $ (0.27) $ (0.36)
======== ======== ======== ========
Gain from extraordinary items - basic $ 0.02 $ -- $ 0.02 $ --
======== ======== ======== ========
Net loss - basic $ (0.06) $ (0.18) $ (0.44) $ (0.48)
======== ======== ======== ========
DILUTED EARNINGS PER SHARE
Loss from continuing operations - basic numerator $ (3,501) $ (4,564) $(11,498) $ (5,533)
Effect of conversion of prepaid warrants (--) (--) (--) (--)
-------- -------- -------- --------
Loss from continuing operations - diluted numerator (3,501) (4,564) (11,498) (5,533)
Loss from discontinued operations - diluted numerator (961) (5,443) (16,350) (16,829)
-------- -------- -------- --------
Gain from extraordinary item - basic numerator 1,000 -- 1,000 --
Net loss - diluted numerator $ (3,462) $(10,007) $(26,848) $(22,362)
Weighted average number of common shares - basic denominator 61,308 56,298 61,129 46,452
Effect of conversion of prepaid warrants -- -- -- --
Effect of other dilutive common stock options and warrants -- -- -- --
Weighted average number of common and common equivalent
shares - diluted denominator 61,308 56,298 61,129 46,452
Per Share:
Loss from continuing operations - diluted $ (0.06) $ (0.08) $ (0.19) $ (0.12)
======== ======== ======== ========
Loss from discontinued operations - diluted $ (0.02) $ (0.10) $ (0.27) $ (0.36)
======== ======== ======== ========
Gain from extraordinary items - diluted $ 0.02 $ -- $ 0.02 $ --
======== ======== ======== ========
Net loss - diluted $ (0.06) $ (0.18) $ (0.44) $ (0.48)
======== ======== ======== ========
For the three and nine month periods ended June 30, 2003 and 2002,
potential common shares were anti-dilutive due to the loss for the period. For
the three month periods ended June 30, 2003 and June 30, 2002 and for the nine
month periods ended June 30, 2003 and June 30, 2002, the Company had potential
common shares excluded from the earnings per share calculations of 8,313,
13,133, 10,876 and 13,092, respectively.
4. COMPREHENSIVE INCOME (LOSS)
In addition to net income or loss, the only item that the Company
currently records as other comprehensive income or loss is the change in the
cumulative translation adjustment resulting from the changes in exchange rates
and the effect of those changes upon translation of the financial statements of
the Company's foreign operations. The following table presents information about
the Company's comprehensive loss for the following periods:
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
2003 2002 2003 2002
-------- -------- -------- --------
Net loss $ (3,451) $ (9,992) $(26,817) $(22,149)
Effect of foreign currency translation adjustments 107 (302) (117) (240)
-------- -------- -------- --------
Comprehensive loss $ (3,344) $(10,294) $(26,934) $(22,389)
======== ======== ======== ========
7
5. REVOLVING CREDIT FACILITY, NOTES PAYABLE AND LONG-TERM DEBT
REVOLVING CREDIT FACILITY
The Company has a $10,000 revolving credit facility, which was due to
expire on April 28, 2003. The termination date has been extended five times by
the lender, the latest of which extends the facility termination date to August
31, 2003, subject to the Company meeting certain conditions. The latest
extension, dated August 14, 2003, also contains modifications to certain
conditions of the loan agreement. The Company is in discussions with several
alternative lenders and believes it will complete a lending agreement within the
next 30 days. The current credit facility allows for borrowings of up to 90% of
eligible foreign receivables up to $10,000 of availability provided under the
Export-Import Bank of the United States guarantee of certain foreign receivables
and inventories, less the aggregate amount of drawings under letters of credit
and any bank reserves. At June 30, 2003, the amount available under the line was
$10,000 against which the Company had $9,986 of borrowings, resulting in
availability at June 30, 2003 of $14, subject to the terms of the credit
facility. Outstanding balances bear interest at a variable rate as determined
periodically by the bank (6% at June 30, 2003). At June 30, 2003, the Company
was not in compliance with certain covenants of the credit agreement, and
therefore in technical default, although the bank continues to make funds
available for borrowings. There can be no certainty that the bank will continue
to make funds available and the bank may immediately call for repayment of
outstanding borrowings. Further, due to the terms of the credit facility, there
can be no certainty that there will be available borrowings under the credit
facility.
NOTES PAYABLE AND LONG-TERM DEBT:
Notes payable and long-term debt at June 30, 2003 and September 30, 2002
consisted of the following:
JUN 30 SEPT 30
2003 2002
-------- --------
AIID notes payable -- prime rate (4.00% at June 30, 2003 and 4.75% at September 30, 2002) 4,245 4,219
Promissory note, 10%, due April 11, 2004 2,000 --
9% Convertible Senior Note - due December 4, 2005 447 --
Other borrowings 27
-------- --------
Total notes payable and long-term debt 6,692 4,246
Less notes payable and current portion of long-term debt (6,245) (2,364)
-------- --------
Long-term debt $ 447 $ 1,882
======== ========
On January 3, 2002, a payment of $1,855 under a note issued to the former
shareholders of Auto Image ID, Inc. ("AIID") came due together with interest at
prime rate. On the due date, the Company paid the interest and approximately
$240 of note principal to certain of these shareholders. The Company reached an
agreement with the other former shareholders to pay the sums originally due on
January 3, 2002 in three approximately equal principal installments in April
2002, August 2002 and December 2002. In exchange for the deferral, the Company
issued warrants with an exercise price of $1.14 per share. The fair value of
these warrants (determined using Black-Scholes pricing model), totaling
approximately $137, was charged to operations through January 2003. In
accordance with the agreement with the other former stockholders, the Company
made note principal and interest payments on April 1, 2002 of approximately $516
and $31, respectively, and note principal and interest payments on August 1,
2002 of $536 and $29, respectively. The Company did not make the December 2002
and January 2003 installment payments due of $535 and $1,855, respectively, and
is therefore in default. Seven of the former shareholders have filed lawsuits
against the Company seeking payment of all amounts currently past due. There is
no provision in the AIID promissory notes giving rights of acceleration of the
future installments due in the event of default under the arrangement. In July
2003, the Company reached a settlement with certain of these noteholders. These
noteholders agreed to forbear from taking action to enforce their notes until
May 1, 2004 or the earlier occurrence of certain events. The Company agreed to
issue warrants to these noteholders and pay these noteholders the outstanding
interest that had accrued through June 1, 2003.
As of August 5, 2003, the Company was in default of an aggregate of
$13,822 of its borrowings.
Principal maturities of notes payable and long-term debt as of June 30,
2003 are as follows:
2003 $ 4,390
2004 1,855
2005 447
---------
Total $ 6,692
=========
8
On December 4, 2002, Pat V. Costa (the "Holder"), loaned the Company $500
and the Company issued a 9% Convertible Senior Note in the amount of $500. Under
the terms of this note, the Company is required to make semiannual interest
payments in cash on May 15 and November 15 of each year commencing May 2003, and
pay the principal amount on December 4, 2005. This note allows the Holder to
require earlier redemption by the Company in certain circumstances including the
sale of a division at a purchase price at least equal to the amounts then due
under this note. Thus, the Holder may require redemption at the time of the sale
of SEG. This note also allows for conversion into shares of common stock. The
note may be converted at any time by the Holder until the note is paid in full
or by the Company if at any time following the closing date the closing price of
the Company's Common Stock is greater, for 30 consecutive trading days, than
200% of the conversion price. The Holder's conversion price is equal to 125% of
the average closing price of our common stock for the thirty consecutive trading
days ending December 3, 2002, or $0.42 per share. This convertible debt
contained a beneficial conversion feature, and as the debt is immediately
convertible, the Company recorded a dividend in the amount of approximately $18
on December 4, 2002. The Company did not make the semiannual interest payment
due on May 15, 2003.
In connection with the 9% Convertible Senior Note, on December 4, 2002,
the Company issued warrants to Pat V. Costa. Under the terms of the warrants,
the Holder is entitled to purchase from the Company shares equal to 25% of the
total number of shares of Common Stock into which the Convertible Senior Note
may be converted or approximately 300,000 shares. The warrants have an exercise
price of $0.63. The Company recorded the fair value of these warrants of
approximately $65 as a discount to the debt using the Black-Scholes valuation
model with the following assumptions: volatility of 107% and risk-free interest
rate of 2.49%. This discount is being amortized over the period from December 4,
2002 to December 4, 2005.
On December 4, 2002, as a condition to making the loan mentioned above and
in order to secure the prompt and complete repayment, the Company entered into a
Security Agreement with Pat V. Costa. Under the terms of this agreement, the
Company granted Mr. Costa a security interest in certain of the Company's
assets.
On April 11, 2003, the Company entered into a Settlement and Release
Agreement with a major customer, which provided for the release of certain
claims among the parties and the payment of $1,000 to the Company. On the same
date, the Company entered into a Loan Agreement with this customer ("Lender"),
which provided for the loan of $4,000 to the Company, in two tranches, subject
to the conditions of each closing. The first closing occurred on April 11, 2003,
at which time the Company delivered to Lender a secured promissory note in the
amount of $2,000 with a maturity date of April 11, 2004, bearing an interest
rate of 10%. The second closing for the delivery of a separate promissory note
is subject to terms and conditions. During the three month period ended June 30,
2003, the Company recorded a $1,000 extraordinary gain relating to the
settlement.
6. RESTRUCTURING
During the nine month period ended June 30, 2003, the Company took
additional steps in order to reduce its costs, including a reduction of 4
employees. Included in this restructuring are costs associated with relocating
the Company's Canton, MA facility into the Company's Nashua, NH facility. A
summary of the 2003 remaining restructuring costs is as follows:
LIABILITY Q1 & Q2 Q3 NON
AT FISCAL 2003 FISCAL 2003 CASH CASH LIABILITY AT
SEPT. 30, AMOUNTS AMOUNTS AMOUNTS AMOUNTS JUNE 30,
2002 ACCRUED ACCRUED INCURRED INCURRED 2003
---- ------- ------- -------- -------- ----
Severance payments to employees $ 48 $ 39 $ -- -- $ 87 $ --
Exit costs from facilities .... 77 176 -- -- 220 33
Write-off of other tangible and
intangible assets .......... -- 94 -- 94 -- --
-------- -------- -------- -------- -------- --------
Total ............... $ 125 $ 309 $ -- $ 94 $ 307 $ 33
======== ======== ======== ======== ======== ========
The Company also took steps in the prior year and recorded severance and
other charges of approximately $356 and $382, respectively, during the three and
nine month periods ended June 30, 2002.
9
7. WARRANTY COSTS
We estimate the cost of product warranties at the time revenue is
recognized. While we engage in extensive product quality programs and processes,
including actively monitoring and evaluating the quality of our component
suppliers, our warranty obligation is affected by product failure rates,
material usage and service delivery costs incurred in correcting a product
failure. Should actual product failure rates, material usage or service delivery
costs differ from our estimates, revisions to the estimated warranty liability
may be required. We recorded warranty provisions totaling $0 and $54 during the
three month periods ended June 30, 2003 and June 30, 2002, respectively, and
$21 and $99 during the nine month periods ended June 30, 2003 and 2002,
respectively. A summary of accrued warranty costs at June 30, 2003 is as
follows:
LIABILITY AT CHARGED TO LIABILITY AT
SEPTEMBER 30, COSTS AND AMOUNTS JUNE 30,
2002 EXPENSES WRITTEN-OFF 2003
---- -------- ----------- ----
$ 120 $21 $21 $120
8. SALE OF PRODUCT LINE
As of December 15, 2001 the Company sold its one-dimensional material
handling product line ("material handling business"), which had been part of the
Company's Acuity CiMatrix division, to affiliates of SICK AG of Germany
("SICK"). The material handling business had designed, manufactured and marketed
one-dimensional bar code reading and machine vision systems and related products
used in the automatic identification and data collection market to track
packages for the parcel delivery services and material handling industries. The
sales price was $11,500, which included the right to receive $500 following the
expiration of a 16-month escrow to cover indemnification claims. The costs of
the transaction were approximately $800. The Company recorded a net gain of
$6,935 in the first quarter of fiscal 2002, related to the sale of the material
handling business. For the period from October 1, 2001 through December 15,
2001, the material handling business had revenues of approximately $2,800 and
had an operating loss of approximately $250.
On June 5, 2003, the Company came to an agreement with SICK on the
remaining escrow in the amount of $350 and recorded the amount as a net gain in
the quarter ended June 30, 2003, related to the sale of the material handling
business.
10
9. DISCONTINUED OPERATIONS
During November 2002, the Company adopted a formal plan to sell its
Semiconductor Equipment Group ("SEG"). Accordingly, the Company has reported SEG
as a discontinued operation under the provisions of Statement of Financial
Accounting Standards SFAS No. 144 'Accounting for the Impairment or Disposal of
Long Lived Assets'. The Consolidated Financial Statements have been reclassified
to segregate the net assets and operating results of this discontinued operation
for all periods presented.
Summary operating results of the discontinued operation for the three and nine
months ended June 30, 2003 and 2002 were as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenues $ 5,032 $ 10,450 $ 16,078 $ 24,125
Operating loss (1,830) (5,365) (17,094) (16,622)
Loss from discontinued operations (961) (5,443) (16,350) (16,829)
The operating losses in the three month periods ended June 30, 2003 and 2002 and
the nine month periods ended June 30, 2003 and 2002 include depreciation and
amortization of intangibles of $873, $1,618, $2,805 and $4,770, respectively.
Assets and liabilities of the discontinued operation related to the
Company's SEG business identified for sale are as follows:
JUNE 30, 2003 SEPTEMBER 30, 2002
------------- ------------------
Accounts receivables, net $ 7,053 $ 10,014
Inventory, net 10,484 18,090
Other current assets 210 255
Property, plant and equipment, net 2,645 4,300
Other assets, including intangible assets 4,060 5,816
---------- ----------
Assets of discontinued operations $ 24,452 $ 38,475
---------- ----------
Accounts payable $ 4,805 $ 6,453
Accrued expenses and other current liabilities 16,566 12,205
Short-term debt 2,592 2,417
Long-term debt 806 1,194
---------- ----------
Liabilities of discontinued operations $ 24,769 $ 22,269
---------- ----------
Net assets of discontinued operations $ (317) $ 16,206
---------- ----------
The above table includes net assets identified as those pertaining to the
SEG business, however, the Company is not certain at this time that all of these
net assets will be included in an ultimate sale.
In November 2002, certain SEG senior management and technical employees
were granted retention agreements. These agreements allow for employees to
receive cash and stock benefits for remaining with the Company and continuing
through the sale of SEG. The current cash value of the award is approximately
$720. The Company is accruing these agreements over the expected service period,
which has been based upon the estimated timing of the sale of SEG. The Company
accrued approximately $600 as of June 30, 2003.
During the quarter ended June 30, 2003, the Company took steps in order to
reduce costs at SEG, including a reduction of approximately 21 employees. This
severance charge in the amount of $140 is included in the loss from discontinued
operations for the three month period ended June 30, 2003.
In February 2003, the Company closed its New Berlin, WI and Tucson, AZ
facilities, and consolidated these SEG operations into its Hauppauge, NY
facility. This restructuring included costs related to the closing of these
facilities, writing off tangible and intangible assets and a reduction of
approximately 50 employees. The charge for this restructuring totaling $6,926
was comprised of inventory charges of $3,397, facility exit costs of $2,486,
property plant and equipment write-offs of $427, severance charges of $228, and
other asset write-offs of $388. The restructuring charge is included in the loss
from discontinued operations for the nine month period ended June 30, 2003.
11
On November 21, 2001, the $1,500 note payable issued to the former
principals of Abante Automation Inc. ("Abante") came due, together with 8%
interest thereon from November 29, 2000. In connection with the acquisition of
Abante, the Company agreed to make post-closing installment payments to the
selling shareholders of Abante. These non-interest bearing payments were payable
in annual installments of not less than $500 through November 2005. On November
21, 2001, the first of five annual installments on the Abante payable also
became due, in the amount of $500. Pursuant to an oral agreement with the former
principals of Abante, the Company paid on November 21, 2001 the interest, $250
of note principal and approximately $112 of the first annual installment. The
balance of the sums originally due on November 21, 2001 were rescheduled for
payment in installments through the first quarter of fiscal 2003. In January
2002, the principals demanded current full payment of these amounts or
collateralization of the Company's future payment obligations. The Company did
not agree to the request for collateralization but continued to make certain
payments in accordance with the terms of that agreement, paying the interest,
$250 of note principal and approximately $150 of the first annual installment on
February 21, 2002, and paying approximately $238 of the first annual installment
on May 21, 2002. The Company did not make either the November 2002 note
principal payment of $1,000 or a significant portion of the November 2002 annual
installment payment of $500, and is therefore in default. Although the Company
has failed to make the installment payment, there is no provision in the
agreements that would require the acceleration of future payments due under this
arrangement. As a result, the Company has classified the payments due during
fiscal 2005 and 2006 in the amount of $754 as long-term debt in the accompanying
financial disclosure for discontinued operations.
During the three month period ended June 30, 2003, the Company came to
agreement with certain suppliers, extinguishing $1,488 of past-due accounts
payable balances owed to these vendors and, in exchange, the Company will issue
1,257,395 shares of common stock. This debt restructuring also included the
cancellation of certain purchase order commitments of the Company totaling
approximately $2,340. The company has included this extraordinary gain from debt
restructure of $932 in the loss from discontinued operations for the quarter
ended June 30, 2003.
10. SUBSEQUENT EVENTS
On August 5, 2003, the Company's $10,000 revolving credit facility, was
extended a fifth time by the lender, extending the facility termination date to
August 31, 2003, subject to the Company meeting certain conditions. This
amendment also included certain modifications to the loan agreement.
In connection with the debt restructuring agreements for the period ended
June 30, 2003, discussed in note 1, the Company has also come to agreement with
certain suppliers during the period of July 1 to July 31, 2003. Under the terms
of these agreements, the Company will extinguish $672 of past-due accounts
payable balances owed to these vendors and, in exchange, the Company will issue
412,652 shares of common stock. This debt restructuring also included the
cancellation of certain purchase order commitments of the Company totaling
approximately $207.
11. RECENT ACCOUNTING PRONOUNCEMENTS
Restructuring -- In July 2002, the FASB issued Statement No. 146,
Accounting for Costs Associated with Exit or Disposal Activities (FAS 146),
which nullifies EITF Issue No. 94-3. FAS 146 requires that a liability for a
cost associated with an exit or disposal activity be recognized when the
liability is incurred, whereas EITF No. 94-3 had recognized the liability at the
commitment date to an exit plan. The Company adopted the provisions of FAS 146
effective for exit or disposal activities initiated after December 31, 2002. The
adoption of FAS 146 did not have an impact on the Company's consolidated balance
sheet or statement of operations.
Guarantees -- In November 2002, the FASB issued Interpretation No. 45
("FIN 45"), Guarantor's Accounting And Disclosure Requirements For Guarantees,
Including Indirect Guarantees of Indebtedness of Others. FIN 45 addresses the
disclosure requirements of a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
FIN 45 also requires a guarantor to recognize, at the inception of a guarantee,
a liability for the fair value of the obligation undertaken in issuing the
guarantee. The disclosure requirements of FIN 45 were effective for the Company
in its quarter ended December 31, 2002. The liability recognition requirements
will be applicable prospectively to all guarantees issued or modified after
December 31, 2002. The adoption of FIN 45 did not have a material effect on the
Company's balance sheet or results of operations statements.
12. GOODWILL
In June 2001, the Financial Accounting Standards Board issued Statements
of Financial Accounting Standards No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001 with early adoption permitted for companies with fiscal years
beginning after March 15, 2001. The Company adopted the new rules on accounting
for goodwill and other intangible assets beginning in the first quarter of
fiscal 2003. Under the new rules, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized but will be subject to annual
impairment tests in accordance with the statements. Other intangible assets will
continue to be amortized over their useful lives.
In accordance with SFAS No. 142, The Company initiated a goodwill
impairment assessment during the second quarter of fiscal 2003. The results of
this analysis concluded that there was no impairment charge. In June 2001, the
Financial Accounting Standards Board issued Statements of Financial Accounting
Standards No. 141, Business Combinations, and No. 142, Goodwill and Other
12
Intangible Assets, effective for fiscal years beginning after December 15, 2001
with early adoption permitted for companies with fiscal years beginning after
March 15, 2001. The Company adopted the new rules on accounting for goodwill and
other intangible assets beginning in the first quarter of fiscal 2003. Under the
new rules, goodwill and intangible assets deemed to have indefinite lives will
no longer be amortized but will be subject to annual impairment tests in
accordance with the statements. Other intangible assets will continue to be
amortized over their useful lives.
13. EXTRAORDINARY ITEMS
Net loss for the three and nine month periods ended June 30, 2003 included
a gain relating to a settlement with a major customer in the amount of $1,000,
or $0.02 per common share. On April 11, 2003, the Company entered into a
Settlement and Release Agreement with this customer, which provided for the
release of certain claims among the parties and the $1,000 payment to the
Company.
13
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Our business activity involves the development, manufacture, marketing and
servicing of machine vision equipment for a variety of industries, including the
global semiconductor industry. Demand for products can change significantly from
period to period as a result of numerous factors including, but not limited to,
changes in global economic conditions, supply and demand for semiconductors and
competitive product offerings. Due to these and other factors, our historical
results of operations including the periods described herein may not be
indicative of future operating results.
As of December 15, 2001, we sold our one-dimensional material handling
product line ("material handling business"), which had been part of our Acuity
CiMatrix division, to affiliates of SICK AG of Germany for approximately $11.5
million. This price included the right to receive $0.5 million following the
expiration of a 16-month escrow to cover indemnification claims. The costs of
this transaction were approximately $0.8 million. On June 5, 2003, the Company
came to an agreement with SICK on the escrow in the amount of approximately $.4
million and recorded the amount as a net gain in the quarter ended June 30,
2003. For the period from October 1, 2001 through December 15, 2001, the
material handling business had revenues of approximately $2.8 million and had an
operating loss of approximately $0.25 million.
Our consolidated financial statements have been prepared assuming we will
continue as a going concern. However, because of continuing negative cash flow,
limited credit facilities, and the uncertainty of the sale of the Semiconductor
Equipment Group ("SEG"), there is no certainty that we will have the financial
resources to continue in business. We have incurred operating losses for fiscal
2002 and 2001 amounting to $40.5 million and $83.2 million, respectively, and
negative cash flows from operations for fiscal 2002, 2001 and 2000 amounting to
$25.9 million, $12.6 million and $21.2 million, respectively. In addition, we
were not as of June 30, 2003, in compliance with certain covenants of our
revolving credit facility, which was due to expire on April 28, 2003. The
termination date has been extended five times by the lender, the latest of which
extends the facility termination date to August 31, 2003, subject to our meeting
certain conditions. The latest extension, dated August 14, 2003, also contains
modifications to certain conditions of the loan agreement. Further, we have debt
payments due which relate to acquisitions we have made. These conditions raise
substantial doubt about our ability to continue as a going concern.
We are executing a plan to address our financial needs. We recognize that
we cannot continue to sustain the losses of both SEG and our Acuity CiMatrix
Division. During November 2002, we adopted a formal plan to sell SEG.
Accordingly, the Consolidated Statements of Operations have been reclassified to
present the results of SEG separately from continuing operations. Furthermore,
the assets and liabilities of SEG are classified separately under discontinued
operations on the Consolidated Balance Sheets (see Note 9). Also, the
Consolidated Statements of Cash Flows classify separately the cash usage from
discontinued operations. We no longer will present segment information, as the
continuing Acuity CiMatrix business is our only segment.
On April 11, 2003, we entered into a Settlement and Release Agreement with
a major customer, which provided for the release of certain claims among the
parties and the payment of $1.0 million to us. On the same date, we entered into
a Loan Agreement with this customer ("Lender"), which provided for the loan of
$4.0 million to us, in two tranches, subject to the conditions of each closing.
The first closing occurred on April 11, 2003, at which time we delivered to
Lender a secured promissory note in the amount of $2.0 million with a maturity
date of April 11, 2004, bearing an interest rate of 10%. The second closing for
the delivery of a separate promissory note is subject to terms and conditions.
On April 17, 2003, we engaged the services of The U-Group LLC, for the
purposes of providing management services to SEG. The U-Group is comprised of a
number of executives with significant semiconductor capital equipment industry
experience. We have charged The U-Group with restoring SEG's profitability,
improving SEG's balance sheet, and restructuring SEG's debt. As of June 30,
2003, we have come to agreement with certain suppliers to SEG, extinguishing
$1.5 million of past-due accounts payable balances owed to these vendors and, in
exchange, we will issue 1,257,395 shares of common stock. This debt
restructuring also included the cancellation of certain purchase order
commitments of ours totaling approximately $2.3 million. We are in continued
discussions with other suppliers regarding the exchange of debt for common
stock. We believe that these steps will enhance the prospects for an eventual
sale of SEG at a higher price than would otherwise be obtained. The U-Group is
also charged with assisting in the sale of SEG as well as with bringing
additional capital into that business.
We have not altered our belief that the sale of SEG is in the best
interests of shareholders, nor have we changed our desire to consummate a sale
of SEG at the earliest date. We have determined, however, that SEG can be made
to be both profitable and cash-
14
flow positive. As a result, we believe that the timing of a sale can be adjusted
to provide a price that more closely reflects SEG's value. We are currently in
discussions with prospective acquirers of SEG.
The sale of SEG, if completed, is expected to result in sufficient
proceeds to pay down our debt, reduce accounts payable, and provide working
capital for our remaining businesses, however, no assurance can be given that
SEG will be sold at a price, or on sufficient terms, to allow for such a result.
Furthermore we cannot be assured that any further extensions to the credit
facility will be granted or a new credit facility established with a new lender.
Thus, our financial planning must include a replacement of our current revolving
credit agreement, additional equity financing or generation of sufficient
working capital to operate without a credit facility. We are in discussions with
several alternative lenders and believe we will complete a lending agreement
within the next 30 days.
Because the timing and proceeds of a prospective sale of SEG is uncertain,
we recognize that we will likely require a supplemental infusion of capital.
This capital infusion may be required either for some short-term period prior to
the completion of a sale of the division, or for long-term self-sufficiency of
working capital. To that end, on December 4, 2002, Pat V. Costa, our Chairman,
President and CEO, loaned us $0.5 million and we issued a 9% Convertible Senior
Note. We have also retained an investment bank to secure additional equity for
us through a private placement of our common stock. The securities that will be
offered in this private placement will not be, and have not been, registered
under the Securities Act of 1933, and may not be offered or sold in the United
States absent registration under the Securities Act or applicable exemption from
such registration. Our plans also call for continued actions to control
operating expenses, inventory levels, and capital expenses, as well as to manage
accounts payable and accounts receivable to enhance cash flow.
If we do not sell SEG, we may not have sufficient working capital to
continue in business. While we believe that we will complete such a sale, there
can be no assurance that the proceeds of a sale will be sufficient to finance
our remaining businesses. In that event, we would be forced either to seek
additional financing or to sell some or all of the remaining product lines of
Acuity CiMatrix.
Results of Operations
As part of our discussion of results of operations, we have excluded the
results of SEG, as the discontinued operation, for the three and nine month
periods ended June 30, 2003 and 2002.
For the three month period ended June 30, 2003, both bookings and revenues
were $5.1 million. This compares to bookings of $3.8 million and revenues of
$4.9 million for the three month period ended June 30, 2002. Bookings and
revenues in the nine month period ended June 30, 2003 were $12.1 million and
$13.9 million, respectively, as compared to $17.3 million and $20.2 million in
the nine month period ended June 30, 2002. The bookings and revenues in the nine
month period ended June 30, 2002, included $1.7 million and $2.8 million,
respectively, associated with our material handling business. Excluding the
material handling business, bookings were $15.6 million and revenues were $17.4
million, respectively, in the nine month period ended June 30, 2002. The decline
in our bookings and revenues in the current fiscal year is a reflection of a
general industry slowdown, as a result of which our customers have decreased
demand for our products as well as our financial constraints impacting our
ability to procure inventory necessary to satisfy customer orders.
The gross profit margin was negatively affected by the decline in
revenues. The gross margins as a percentage of revenues were 39.9% and 41.6% in
the three and nine months ended June 30, 2003 compared to 45.8% and 48.5% in the
three and nine month periods ended June 30, 2002. Excluding the effects of the
material handling business, margins were 51.2% of revenues in the nine month
period ended June 30, 2002. The lower gross profit margin primarily reflects the
impact of the fixed costs as a percentage of the lower level of sales, as well
as the impact of $0.4 million of inventory provisions recorded in the three and
nine months ended June 30, 2003.
Research and development expenses were $1.1 million, or 22% of revenues,
in the three month period ended June 30, 2003, compared to $1.4 million, or 29%
of revenues, in the three month period ended June 30, 2002. Research and
development expenses were $3.1 million, or 23% of revenues, in the nine month
period ended June 30, 2003, compared to $4.9 million, or 24% of revenues, in the
nine month period ended June 30, 2002. Excluding the effects of the material
handling business, research and development expenses were $4.5 million or 26% of
revenues in the nine month period ended June 30, 2002. The lower level of
expenses reflects a lower level of fixed costs as a result of cost reductions
taken in fiscal 2002. In fiscal 2003 and 2004, we intend to continue to invest
in enhancing our two-dimensional barcode reading products.
In the three and nine month periods ended June 30, 2003, we capitalized
approximately $0.2 million and $0.5 million in software development costs under
Statement of Financial Accounting Standards No. 86 as compared with $0.1 million
and $0.4 million in the three and nine month periods ended June 30, 2002. The
related amortization expense was $0.3 million and $0.9 million for the three
15
and nine month periods, respectively, during both fiscal 2003 and 2002. The
amortization costs are included in cost of sales.
Selling, general and administrative expenses were $4.5 million, or 88% of
revenues, in the three month period ended June 30, 2003, compared to $4.8
million, or 97% of revenues, in the three month period ended June 30, 2002.
Selling, general and administrative expenses were $13.4 million, or 97% of
revenues, in the nine month period ended June 30, 2003, compared to $16.1
million, or 80% of revenues, in the nine month period ended June 30, 2002.
Excluding the effects of the material handling business, selling, general and
administrative expenses in the nine month period ended June 30, 2002 were $15.4
million, or 88% of revenues. The lower level of expenses reflects a combination
of lower levels of variable selling expenses associated with the decrease in
revenues and the lower level of fixed costs, as a result of the many cost
reductions taken in fiscal 2002.
During the nine month period ended June 30, 2003, the Company took
additional steps in order to reduce its costs, including a reduction of 4
employees. Included in this restructuring are costs associated relocating the
Company's Canton, MA facility into the Company's Nashua, NH facility. A summary
of the 2002 remaining restructuring costs is as follows (in thousands):
LIABILITY Q1 & Q2 Q3 NON
AT FISCAL 2003 FISCAL 2003 CASH CASH LIABILITY AT
SEPT. 30. AMOUNTS AMOUNTS AMOUNTS AMOUNTS JUNE 30,
2002 ACCRUED ACCRUED INCURRED INCURRED 2003
---- ------- ------- -------- -------- ----
Severance payments to employees $ 48 $ 39 $ -- -- $ 87 $ --
Exit costs from facilities .... 77 176 -- -- 220 33
Write-off of other tangible and
intangible assets ............ -- 94 -- 94 -- --
-------- -------- -------- -------- -------- --------
Total ............... $ 125 $ 309 $ -- $ 94 $ 307 $ 33
======== ======== ======== ======== ======== ========
The Company also took steps in the prior year and recorded severance and
other charges of approximately $0.4 million during the three and nine month
periods ended June 30, 2002.
Net interest expense was $0.3 million and $0.8 million in the three and
nine month periods ended June 30, 2003, as compared to $0.2 million and $0.7
million in the three and nine months ended June 30, 2002. The applicable
interest rate under the August 14, 2003 extension is prime plus 2%.
There were no tax provisions in the three and nine months ended June 30,
2003 and 2002, due to the losses incurred and full valuation allowance provided
against net operating loss carryforwards.
Discontinued operations
For the three and nine months ended June 30, 2003, revenues from
discontinued operations were $5.0 million and $16.1 million, compared to $10.5
million and $24.1 million for the three and nine months ended June 30, 2002. The
decline in revenues related to demand for the products, the uncertainty
surrounding the potential sale of SEG as well as our financial constraints
impacting our ability to procure inventory necessary to satisfy customer orders.
For the three and nine months ended June 30, 2003, the loss from
discontinued operations was $1.0 million and $16.4 million, respectively,
compared to $5.4 million and $16.8 million, respectively, for the three and nine
months ended June 30, 2002. The decrease in operating losses during the three
month comparable period is a reflection of the lower level of fixed costs in the
current year. The increase in operating losses during the comparable nine month
periods can be attributed to the lower level of revenues and restructuring
charges in the current year relating to closure of facilities in New Berlin, WI
and Tucson, AZ, offset in part by the lower level of fixed costs in the current
year.
During the quarter ended June 30, 2003, we took steps in order to reduce
costs at SEG, including a reduction of approximately 21 employees. This
severance charge in the amount of $0.1 million is included in the loss from
discontinued operations for the three month period ended June 30, 2003.
In February 2003, we closed our New Berlin, WI and Tucson, AZ facilities,
and consolidated these SEG operations into our Hauppauge, NY facility. This
restructuring included costs related to the closing of these facilities, writing
off tangible and intangible assets and a reduction of approximately 50
employees. The charge for this restructuring totaling $6.9 million was comprised
of inventory charges of $3.4 million, facility exit costs of $2.5 million
property plant and equipment write-offs of $0.4 million, severance
16
charges of $0.2 million, and other asset write-offs of $0.4 million. The
restructuring charge is included in the loss from discontinued operations for
the nine month period ended June 30, 2003
During the three month period ended June 30, 2003, we came to agreement
with certain suppliers, extinguishing $1.5 million of past-due accounts payable
balances owed to these vendors and, in exchange, we will issue 1,257,395 shares
of common stock. This debt restructuring also included the cancellation of
certain purchase order commitments of ours totaling approximately $2.3 million.
We have included this extraordinary gain from debt restructure of $0.9 million
in the loss from discontinued operations for the quarter ended June 30, 2003.
As of June 30, 2003, SEG had future lease commitments for facilities and
equipment of $13.3 million. We are not certain at this time that all of these
lease commitments will be included in an ultimate sale.
As of June 30, 2003, SEG had purchase commitments with vendors of
approximately $14.8 million, which included computers, handling equipment, and
manufactured components for the lead scanning, wafer scanning, substrate
scanning, handling and ball attach product lines. This purchase order commitment
amount reflects orders totaling approximately $2.3 million, cancelled in
connection with debt restructuring discussed above. We are not certain at this
time that all of these purchase commitments will be included in an ultimate
sale. As a result of the slowdown experienced by SEG, we identified certain
purchase commitments for products that have been discontinued. We have recorded
a loss in the amount of $1.1 million related to these commitments in the nine
month period ended June 30, 2003.
We have a contingent liability totaling approximately $0.7 million,
payable in cash, to certain SEG senior management and technical employees who
were granted retention agreements payable upon the sale of SEG. We are accruing
these agreements over the expected service period, which has been based upon the
estimated timing of the SEG sale. We accrued approximately $0.6 million as of
June 30, 2003.
Liquidity And Capital Resources
On December 4, 2002, Pat V. Costa (the "Holder"), loaned us $0.5 million
and we issued a 9% Convertible Senior Note in the amount of $0.5 million. Under
the terms of this note, we are required to make semiannual interest payments in
cash on May 15 and November 15 of each year commencing May 2003 and pay the
principal amount on December 4, 2005. This note allows the Holder to require
earlier redemption by us in certain circumstances including the sale of a
division at a purchase price at least equal to the amounts then due under this
note. Thus, the Holder may require redemption at the time of the sale of SEG.
This note also allows for conversion into shares of common stock. The note may
be converted at any time by the Holder until the note is paid in full or by us
if at any time following the closing date the closing price of our Common Stock
is greater, for 30 consecutive trading days, than 200% of the conversion price.
The Holder's conversion price is equal to 125% of the average closing price of
our common stock for the thirty consecutive trading days ending on December 3,
2002, or $0.42 per share. This convertible debt contained a beneficial
conversion feature, and as the debt is immediately convertible, we recorded a
dividend in the amount of approximately $18 thousand on December 4, 2002. We did
not make the semiannual interest payment due on May 15, 2003.
In connection with the 9% Convertible Senior Note, on December 4, 2002, we
issued warrants to Pat V. Costa. Under the terms of the warrants, the Holder is
entitled to purchase shares equal to 25% of the total number of shares of common
stock into which the Convertible Senior Note may be converted, or approximately
300,000 shares. The warrants have an exercise price of $0.63. We recorded the
fair value of these warrants of approximately $65 as a discount to the debt
using the Black-Scholes valuation model with the following assumptions:
volatility of 107% and risk-free interest rate of 2.49%. This discount is being
amortized over the period from December 4, 2002 to December 4, 2005.
On December 4, 2002, as a condition to making the loan mentioned above and
in order to secure the prompt and complete repayment, we entered into a Security
Agreement with Pat V. Costa in connection with the 9% Convertible Senior Note.
Under the terms of this agreement, we granted Mr. Costa a security interest in
certain of our assets.
Our cash balance increased $0.4 million, to $0.8 million, in the nine
month period ended June 30, 2003, as a result of $4.9 million of net cash used
in operating activities, $0.1 million of net cash used by investing activities,
and $5.4 million of net cash provided by financing activities.
17
The $4.9 million of net cash used in operating activities was primarily a
result of the $11.5 million loss from continuing operations in the nine month
period ended June 30, 2003, offset in part by a decrease in inventory of $2.1
million, depreciation and amortization of $1.9 million, proceeds from legal
settlement of $1.0 million, issuance of shares in exchange for debt of $0.6
million and an increase in deferred gross profit of $0.3 million.
Additions to plant and equipment were minimal in the nine month period
ended June 30, 2003, as compared to $0.2 million in fiscal 2002. The capitalized
software development costs for fiscal 2003 were $0.5 million as compared with
$0.4 million in fiscal 2002.
We have a $10.0 million credit facility, which was due to expire on April
28, 2003. The termination date has been extended five times by the lender, the
latest of which extends the facility termination date to August 31, 2003,
subject to our meeting certain conditions. The latest extension, dated August
14, 2003, also contains certain modifications to the loan agreement. The Company
is currently seeking an alternative financing source. We are in discussions with
several alternative lenders and believe we will complete a lending agreement
within the next 30 days. This credit facility allows for borrowings of up to 90%
of eligible foreign receivables up to $10 million of availability provided under
the Export-Import Bank of the United States guarantee of certain foreign
receivables and inventories, less the aggregate amount of drawings under letters
of credit and bank reserves. At June 30, 2003, the amount available under the
line was $10.0 million, against which we had $9.986 million of borrowings,
resulting in availability at June 30, 2003 of $14 thousand, subject to the terms
of the credit facility. Outstanding balances bear interest at a variable rate as
determined periodically by the bank (6% at June 30, 2003). We are not in
compliance with certain covenants of the credit agreement, and therefore in
technical default on the facility, although, the bank continues to make funds
available for borrowings. There can be no certainty that the bank will continue
to make funds available and the bank may immediately call for repayment of
outstanding borrowings. Further, due to the terms of the credit facility, there
can be no certainty that there will be available borrowings under the line. As
of August 14, 2003, we were in default of an aggregate of $13.8 million of our
borrowings.
Our consolidated financial statements have been prepared assuming that we
will continue as a going concern. However, because of continuing negative cash
flow, limited credit facilities, and the uncertainty of the sale of SEG, there
is no certainty that we will have the financial resources to continue in
business. We have incurred net losses in fiscal 2002 amounting to $41.8
million, and $104.4 million in fiscal 2001. Net cash used in operating
activities amounted to $25.9 million, $12.6 million and $21.2 million in fiscal
2002, 2001 and 2000, respectively. In addition, we are in technical default of
our credit facility which may not be extended beyond August 31, 2003. The bank
may immediately call for repayment of outstanding borrowings under this credit
facility. These conditions raise substantial doubt about our ability to continue
as a going concern.
We are executing a plan to address our financial needs. We recognize that
we cannot continue to sustain the losses of both SEG and our Acuity CiMatrix
Division. During November 2002, we adopted a formal plan to sell SEG.
Accordingly, the Consolidated Statements of Operations have been reclassified to
present the results of SEG separately from continuing operations. Furthermore,
the assets and liabilities of SEG are classified separately on the Consolidated
Balance Sheets (see Note 9). Also, the Consolidated Statements of Cash Flows
separately classify the cash usage from discontinued operations. We no longer
will present segment information, as the continuing Acuity CiMatrix business is
our only segment.
On April 11, 2003, we entered into a Settlement and Release Agreement with
a major customer, which provided for the release of certain claims among the
parties and the payment of $1.0 million to us. On the same date, we entered into
a Loan Agreement with this customer ("Lender"), which provided for the loan of
$4.0 million to us, in two tranches, subject to the conditions of each closing.
The first closing occurred on April 11, 2003, at which time we delivered to
Lender a secured promissory note in the amount of $2.0 million, with a maturity
date of April 11, 2004, bearing an interest rate of 10%. The second closing for
the delivery of a separate promissory note is subject to terms and conditions.
On April 17, 2003, we engaged the services of The U-Group LLC, for the
purposes of providing management services to SEG. The U-Group is comprised of a
number of executives with significant semiconductor capital equipment industry
experience. We have charged The U-Group with restoring SEG's profitability,
improving SEG's balance sheet, and restructuring SEG's debt. As of June 30,
2003, we have come to agreement with certain suppliers, extinguishing $1.5
million of past-due accounts payable balances owed to these vendors and in
exchange, will issue 1,257,395 shares of common stock. This debt restructuring
also included the cancellation of certain purchase order commitments of ours
totaling approximately $2.3 million. We are in continued discussions with other
suppliers regarding the exchange of debt for common stock. We believe that these
steps will enhance the prospects for an eventual sale of SEG at a higher price
than would otherwise be obtained. The U-Group is also charged with assisting in
the sale of SEG, as well as with bringing additional capital into that business.
We have not altered our belief that the sale of SEG is in the best
interests of shareholders, nor have we changed our desire to consummate a sale
of SEG at the earliest date. We have determined, however, that SEG can be made
to be both profitable and cash-
18
flow positive. As a result, we believe that the timing of a sale can be adjusted
to provide a price that more closely reflects SEG's value. We are currently in
discussions with prospective acquirers of SEG.
Also, we continue to implement plans to control operating expenses,
inventory levels, and capital expenditures as well as plans to manage accounts
payable and accounts receivable to enhance cash flows. The sale of SEG, if
completed, is expected to result in sufficient proceeds to pay down our debt,
reduce accounts payable, and provide working capital for our remaining
businesses. Upon such sale, the assets supporting our current revolving credit
agreement will be substantially reduced and we cannot be assured that this
credit facility will continue to be extended or a new credit facility
established with a new lender. Thus, our financial planning must include a
replacement of our current revolving credit agreement, additional equity
financing or generation of sufficient working capital to operate without a
credit facility.
If we do not succeed in eventually selling SEG, we may have insufficient
working capital to continue in business. While we believe that we will complete
such a sale, there can be no assurance that the proceeds of a sale will be
sufficient to finance our remaining businesses. In that event, we would be
forced either to seek additional financing or to sell some or all of the
remaining product lines of Acuity CiMatrix.
We have operating lease agreements for equipment, and manufacturing and
office facilities. The minimum noncancelable lease payments under these
agreements are as follows (in thousands):
TWELVE MONTH PERIOD ENDING MARCH 31: FACILITIES EQUIPMENT TOTAL
------------------------------------ ---------- --------- -----
2004 $ 605 $ 43 $ 648
2005 468 23 491
2006 113 7 120
-------- -------- --------
Total $ 1,186 $ 73 $ 1,259
======== ======== ========
Purchase Commitments -- As of June 30, 2003, we had approximately $0.7
million of purchase commitments with vendors, and included computers, PC boards,
cameras, and manufactured components for the division's machine vision and
two-dimensional inspection product lines. We are required to take delivery of
this inventory over the next three years. Substantially all deliveries are
expected to be taken in the next twelve months.
Effect of Inflation
Management believes that during the three and nine months ended June 30,
2003 the effect of inflation was not material.
Recent Accounting Pronouncements
Restructuring -- In July 2002, the FASB issued Statement No. 146,
Accounting for Costs Associated with Exit or Disposal Activities (FAS 146),
which nullifies EITF Issue No. 94-3. FAS 146 requires that a liability for a
cost associated with an exit or disposal activity be recognized when the
liability is incurred, whereas EITF No. 94-3 had recognized the liability at the
commitment date to an exit plan. The Company adopted the provisions of FAS 146
effective for exit or disposal activities initiated after December 31, 2002. The
adoption of SFAS No. 146 did not have an impact on our consolidated balance
sheet or statement of operations.
Guarantees -- In November 2002, the FASB issued Interpretation No. 45
("FIN 45"), Guarantor's Accounting And Disclosure Requirements For Guarantees,
Including Indirect Guarantees of Indebtedness of Others. FIN 45 addresses the
disclosure requirements of a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
FIN 45 also requires a guarantor to recognize, at the inception of a guarantee,
a liability for the fair value of the obligation undertaken in issuing the
guarantee. The disclosure requirements of FIN 45 were effective for the Company
in its quarter ended December 31, 2002. The liability recognition requirements
will be applicable prospectively to all guarantees issued or modified after
December 31, 2002. The adoption of FIN 45 did not have an impact on the
Company's consolidated balance sheet or statement of operations.
Forward-Looking Statements And Associated Risks
This report contains forward-looking statements including statements
regarding, among other items, financing activities and anticipated trends in our
business, which are made pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These statements are based largely on
our expectations and are subject to a number of risks and uncertainties, some of
which cannot be predicted or quantified and are beyond our control, including
the following: we may not have sufficient resources to
19
continue as a going concern; any significant downturn in the highly cyclical
semiconductor industry or in general business conditions would likely result in
a reduction of demand for our products and would be detrimental to our business;
we will be unable to achieve profitable operations unless we increase quarterly
revenues or make further cost reductions; we are in default of our revolving
credit facility; our shares could be delisted from the Nasdaq Stock Market; a
loss of or decrease in purchases by one of our significant customers could
materially and adversely affect our revenues and profitability; economic
difficulties encountered by certain of our foreign customers may result in order
cancellations and reduced collections of outstanding receivables; development of
our products requires significant lead time and we may fail to correctly
anticipate the technical needs of our markets; inadequate cash flows and
restrictions in our banking arrangements may impede production and prevent us
from investing sufficient funds in research and development; the loss of key
personnel could have a material adverse effect on our business; the large number
of shares available for future sale could adversely affect the price of our
common stock; and the volatility of our stock price could adversely affect the
value of an investment in our common stock.
Future events and actual results could differ materially from those set
forth in, contemplated by, or underlying the forward-looking statements.
Statements in this report, including those set forth above, describe factors,
among others, that could contribute to or cause such differences.
This 10-Q should be read in conjunction with detailed risk factors in our
annual report on Form 10-K, and other filings with the Securities and Exchange
Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Financial instruments that potentially subject us to concentrations of
credit-risk consist principally of cash equivalents and trade receivables. We
place our cash equivalents with high-quality financial institutions, limit the
amount of credit exposure to any one institution and have established investment
guidelines relative to diversification and maturities designed to maintain
safety and liquidity. Our trade receivables result primarily from sales to
semiconductor manufacturers located in North America, Japan, the Pacific Rim and
Europe. Receivables are denominated in U.S. dollars, mostly from major
corporations or distributors or are supported by letters of credit. We maintain
reserves for potential credit losses and such losses have been immaterial.
We are exposed to the impact of fluctuation in interest rates, primarily
through our borrowing activities. Our policy has been to use U.S. dollar
denominated borrowings to fund our working capital requirements. The interest
rates on our current borrowings fluctuate with current market rates. The extent
of risk associated with an increase in the interest rate on our borrowings is
not quantifiable or predictable because of the variability of future interest
rates and our future financing requirements.
We believe that our exposure to currency exchange fluctuation risk is
insignificant because the operations of our international subsidiaries are
immaterial. Sales of our U.S. divisions to foreign customers are primarily U.S.
dollar denominated. During fiscal 2002 and 2003, we did not engage in foreign
currency hedging activities. Based on a hypothetical ten percent adverse
movement in foreign currency exchange rates, the potential losses in future
earnings, fair value of foreign currency sensitive instruments, and cash flows
are immaterial, although the actual effects may differ materially from the
hypothetical analysis.
We estimate the fair value of our notes payable and long-term liabilities
based on quoted market prices for the same or similar issues or on current rates
offered to us for debt of the same remaining maturities. For all other balance
sheet financial instruments, the carrying amount approximates fair value.
ITEM 4. CONTROLS AND PROCEDURES
Our management carried out an evaluation, with the participation of our
Chief Executive Officer (also acting as our Chief Financial Officer), of the
effectiveness of our disclosure controls and procedures as of June 30, 2003.
Based upon that evaluation and after consultation with our audit committee, our
Chief Executive Officer concluded that our disclosure controls and procedures
were effective to ensure that information required to be disclosed by us in
reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported, within the time periods specified
in the rules and forms of the Securities and Exchange Commission.
There has not been any change in our internal control over financial
reporting in connection with the evaluation required by Rule 13a-15(d) under the
Exchange Act that occurred during the quarter ended June 30, 2003 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
In our Quarterly Report on Form 10-Q for our six month fiscal period ended
March 31, 2003, we disclosed that our senior management team had concluded as
regards our three month fiscal period ended December 31, 2002 that there were
deficiencies in the operation of our internal controls which adversely affected
our ability to record, process, summarize and report financial data and that we
were in the process of determining appropriate corrective action to strengthen
our internal controls and procedures.
Our management, together with the Audit Committee of our Board of
Directors, has reviewed the circumstances that led Deloitte & Touche LLP, our
former auditors, to require us to disclose in our Quarterly Report on Form 10-Q
for our three month fiscal quarter ended December 31, 2002 in their required
verbiage the existence of such internal control deficiencies. Our management
and Audit Committee took note of the fact that our corporate finance personnel
had been absorbed in the weeks following the close of our fiscal quarter ended
December 31, 2002 in the assembly and presentation of financial data to satisfy
the requests of a prospective purchaser of our Semiconductor Equipment Group.
In this context, they also took note of our former auditor's observation that
the review of that fiscal quarter's divisional financial results by our
corporate finance personnel has been insufficient, thereby requiring our former
auditors to perform a more extensive review of divisional financial results
than they otherwise would have done in connection with their review of our
Quarterly Report on Form 10-Q for that fiscal period. Assessing the several
adjustments to our quarterly operating results for our fiscal quarter ended
December 31, 2002 required by our former auditors, all of which were acceptable
to us, our management and Audit Committee observed that none of these
adjustments were recorded in connection with any deficiency or material
weakness of, and did not relate to any failure in our internal controls. Our
management and Audit Committee also took note that, in response to an inquiry
by our Audit Committee, our former auditor had stated that these adjustments
were not symptomatic of any pervasive deficiency in our internal controls and
that no remedial actions to improve our internal controls were required.
Consequently, our management and Audit Committee has determined that our
disclosure of internal controls deficiencies in our Quarterly Report on Form
10-Q for our fiscal quarter ended December 31, 2002 was unwarranted. We have
taken measures to ensure that there will be no future diversion of our
corporate finance personnel from their customary tasks related to the
preparation and review of our quarterly and other periodic public filings.
20
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A number of purported securities class actions were filed beginning on or
about June 11, 2001 against us, Pat V. Costa, our Chief Executive Officer, and
Frank Edwards, our former Chief Financial Officer, in the Federal District Court
for the District of Massachusetts. The action was consolidated as In Re Robotic
Vision Systems, Inc. Securities Litigation, Master File No. 01-CV-10876 (RGS). A
final judgment was entered July 21, 2003. The settlement amount will be covered
from our directors and officers liability insurance policy.
In February 2003, four of the former shareholders of Auto Image ID, Inc.
filed an action in the United States District Court for the Eastern District of
Pennsylvania, C. A. No. 03-841, seeking payments of approximately $2 million of
amounts allegedly owed under promissory notes issued to them by us in connection
with our purchase of Auto Image ID, Inc. in January 2001. The parties to this
action have agreed to settle the matter. The plaintiffs agreed to forbear in
acting to collect on the promissory notes until May 1, 2004 or the earlier
occurrence of certain events and we agreed to issue to the plaintiffs warrants
to purchase 321,382 shares of our common stock. The parties filed a stipulation
of dismissal on July 7, 2003.
In May 2002, a purported shareholder derivative action entitled Mead Ann
Krim v. Pat V. Costa, et al., Civil Action No. 19604-NC, was filed in the Court
of Chancery of the State of Delaware against the members of our Board of
Directors, and against us as a nominal defendant. The complaint sought damages
to us as a result of the statements at issue in the now settled securities class
actions. The action was dismissed with predjudice as to the plaintiff only, on
May 14, 2003.
In September 2002, McDonald Investments Inc. filed a demand for
arbitration with the American Arbitration Association claiming entitlement to
certain advisory fees in connection with the financing we completed in May 2002.
On May 19, 2003, we entered into an agreement with McDonald Investments, Inc. to
settle this dispute. Pursuant to this agreement, we are only required to issue
warrants to purchase 150,000 shares of our common stock and pay a limited amount
of McDonald's fees related to this dispute.
In addition to legal proceedings discussed in our annual report on Form
10-K for the year ended September 30, 2002, we are presently involved in other
litigation matters in the normal course of business. Based upon discussion with
our legal counsel, management does not expect that these matters will have a
material adverse impact on our consolidated financial statements.
ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS
As of June 30, 2003, we agreed to issue 1,257,395 shares of common stock to
certain suppliers in exchange for the cancellation of our debt obligations to
such suppliers, which in the aggregate equaled approximately $1,488,000. The
agreement to issue our common stock was not registered under the Securities Act
of 1933 because the common stock was offered and sold in a transaction not
involving a public offering, exempt from registration under the Securities Act
of 1933 pursuant to Section 4(2).
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
EXHIBIT
NO.
---
10.23 Extension to the Revolving Credit and Security Agreement, dated May
30, 2003, between PNC Bank, National Association (as lender and
agent) and Registrant (as borrower).
10.24 Extension to the Revolving Credit and Security Agreement, dated
August 14, 2003, between PNC Bank, National Association (as lender
and agent) and Registrant (as borrower).
31.1 Rule 13a-14(a) Certification
21
32.1 Section 1350 Certification
(b) Report on Form 8-K.
During the quarter ended June 30, 2003, we filed or submitted the
following current reports on Form 8-K
Current report on Form 8-K, dated April 11, 2003, was filed on April
14, 2003. The items reported were:
Item 5 - Other Events and Required FD Disclosure, which
reported the issuance of a press release announcing that we had
resumed normal business relations with a major customer who was
providing us with a meaningful loan package; and
Item 7 - Financial Statements and Exhibits, which identified
the exhibit filed with the Form 8-K.
Current report on Form 8-K, dated May 2, 2003, was filed on May 2,
2003. The items reported were: Item 5 - Other Events and Required FD
Disclosure, which reported the issuance of a press release announcing
that John Connolly had resigned as our Chief Financial Officer and that
Jeffrey Lucas had joined our company to help oversee many of the
financial areas previously assigned to Mr. Connolly.
Item 7 - Financial Statements and Exhibits, which identified
the exhibit filed with the Form 8-K.
Current report on Form 8-K, dated May 20, 2003, was submitted on
May 20, 2003. The items reported were:
Item 7 - Financial Statements and Exhibits, which identified
the exhibit furnished with the Form 8-K; and
Item 9 - Regulation FD Disclosure, which reported the issuance
of a press release announcing our financial results for the quarter
ended March 31, 2003.
Current report on Form 8-K, dated May 20, 2003, was submitted on
May 20, 2003. The item reported was:
Item 9 - Regulation FD Disclosure, which furnished the Section
906 certification that accompanied our quarterly report on Form 10-Q
for the quarter ended March 31, 2003.
Current report on Form 8-K, dated June 20, 2003, was filed on June
25, 2003, and an amendment thereto was filed on June 27, 2003. The items
reported were:
Item 4 - Change in Registrant's Certifying Accountant, which
reported that on June 20, 2003, Deloitte and Touche, LLP had
resigned as our independent accountants;
Item 5 - Other Events and Required FD Disclosure, which
reported the issuance of a press release announcing our receipt of a
Nasdaq Determination Letter; and
Item 7 - Financial Statements and Exhibits, which identified
the exhibits filed with the Form 8-K.
22
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.
ROBOTIC VISION SYSTEMS, INC.
Registrant
Dated: August 14, 2003 /s/ PAT V. COSTA
----------------
PAT V. COSTA
President and CEO
(Principal Executive Officer,
and Acting Chief Financial Officer)
23