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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________.
COMMISSION FILE NUMBER: 0-13403
AMISTAR CORPORATION
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-2747332
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
237 Via Vera Cruz
San Marcos, California 92069
(Address of principal executive offices) (Zip code)
(760) 471 -1700
(Registrant's telephone number, including area code)
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 last 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]
There were 3,082,604 shares of common stock outstanding as of April 29, 2003.
1
Part I
ITEM 1. FINANCIAL STATEMENTS
AMISTAR CORPORATION
Condensed Balance Sheets
(Unaudited and in thousands)
March 31, Dec. 31,
2003 2002
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 2,761 $ 2,383
Restricted cash 40 110
Trade accounts receivable, net 1,321 1,557
Inventories, net 2,316 2,401
Demonstration equipment 95 95
Prepaid expenses 115 186
-------- --------
Total current assets 6,648 6,732
Property and equipment, net 3,932 3,991
Other assets 53 56
-------- --------
$10,633 $10,779
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 255 $ 220
Accrued liabilities 444 378
Industrial development bonds 2,900 3,000
-------- --------
Total current liabilities 3,599 3,598
-------- --------
Shareholders' equity:
Common stock 31 31
Additional paid-in capital 4,533 4,534
Retained earnings 2,470 2,616
-------- --------
Total shareholders' equity 7,034 7,181
-------- --------
$10,633 $10,779
======== ========
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.
2
AMISTAR CORPORATION
Condensed Statements of Operations
(Unaudited and in thousands, except per share data)
Three months ended
March 31,
2003 2002
-------- --------
Net sales $ 2,769 $ 2,641
Cost of sales 2,231 2,481
-------- --------
Gross profit 538 160
-------- --------
Operating expenses:
Selling 330 292
General and administrative 243 259
Engineering, research and development 107 117
-------- --------
680 668
-------- --------
Operating loss (142) (508)
Other income (expense), net (3) 8
-------- --------
Loss before income taxes (145) (500)
Income tax expense (benefit) 1 (398)
-------- --------
Net loss $ (146) $ (102)
======== ========
Earnings (loss) per share-
basic and diluted $ (0.05) $ (0.03)
======== ========
Weighted average shares
outstanding, basic and diluted 3,083 3,140
======== ========
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.
3
AMISTAR CORPORATION
Statements of Cash Flows
(Unaudited and in thousands)
Three months ended March 31, 2003 2002
- --------------------------------------------------------------------------------
Cash flows from operating activities:
Net loss $ (146) $ (102)
Adjustments to reconcile net loss to
net cash provided (used) in operating activities:
Depreciation and amortization 94 159
Changes in assets and liabilities:
Trade accounts receivable, net 236 (356)
Inventories 85 (430)
Income taxes receivable -- (400)
Demonstration equipment -- 1
Prepaid expenses and other assets 74 79
Accounts payable and accrued liabilities 101 (23)
-------- --------
Net cash provided (used) in operating activities 444 (1,072)
-------- --------
Cash flows from investing activities-
Purchase of property and equipment (35) (2)
-------- --------
Cash flows from financing activities:
Redemption of Industrial Development Bonds (100) (1,500)
Decrease in restricted cash, net 70 1,442
Repurchase of common stock (1) --
-------- --------
Net cash used in financing activities (31) (58)
-------- --------
Net increase (decrease) in cash and cash equivalents 378 (1,132)
-------- --------
Cash and cash equivalents, beginning of period 2,383 3,626
-------- --------
Cash and cash equivalents, end of period $ 2,761 $ 2,494
======== ========
Supplemental disclosure of cash flow information-
Cash paid during the period for:
Interest $ 7 $ 13
======== ========
Income taxes $ 3 $ 4
======== ========
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.
4
AMISTAR CORPORATION
Notes to Condensed Financial Statements
(Unaudited)
(1) BUSINESS AND CURRENT EVENTS
Notice from Stock Exchange
- --------------------------
The company received notice on October 4, 2002 that it is subject to
de-listing from the NASDAQ Small Cap Market for failure to meet the minimum
closing bid price requirement of $1.00 for the prior 30 days. The Company
initially was granted 180 days or until April 1, 2003 to comply with the minimum
closing bid price requirement or possibly face de-listing. On April 2, 2003, the
Company was notified that it had been granted an additional 180 days or until
September 29, 2003 to regain compliance with the minimum closing bid price
requirement of $1.00 for ten consecutive days. In the event the Company fails to
comply with the minimum bid price requirement at the end of the 180-day period,
the Company believes it will qualify for a 90-day additional extension based on
compliance with the initial listing requirements.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
- ---------------------
The accompanying unaudited condensed financial statements of the Company
have been prepared in accordance with Rule 10-01 of Regulation S-X promulgated
by the Securities and Exchange Commission and, therefore, do not include all
information and footnotes necessary for a fair presentation of financial
position, results of operations and cash flows in conformity with accounting
principles generally accepted in the United States of America. In the opinion of
the Company, however, the accompanying unaudited condensed financial statements
contain all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the Company's financial position as of March 31,
2003, its results of operations and its cash flows for the three month periods
ended March 31, 2003 and 2002, respectively. The results of operations of the
Company for the three-month period ended March 31, 2003 may not be indicative of
future results. These condensed unaudited financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's annual report on Form 10-K for the year ended December 31, 2002 as
filed with the Securities and Exchange Commission on March 26, 2003.
5
AMISTAR CORPORATION
Notes to Condensed Financial Statements, continued
(Unaudited)
Inventories
- -----------
Inventories are stated at the lower of cost (first-in, first-out) or market
and include material, labor and manufacturing overhead costs. Inventories
consist of the following (in thousands):
Mar. 31 Dec. 31,
2003 2002
------------------------------------ -----------------------------------
AIA AMS Total AIA AMS Total
--- --- ----- --- --- -----
Raw Material $ 292 $ 700 $ 992 $ 210 $ 580 $ 790
Work In Process 465 101 566 569 161 730
Finished Goods 619 139 758 669 212 881
------------------------------------ -----------------------------------
Total $ 1,376 $ 940 $ 2,316 $ 1,448 $ 953 $ 2,401
==================================== ===================================
Earnings Per Common Share
- -------------------------
The Company calculates net earnings (loss) per share in accordance with
SFAS No. 128, Earnings Per Share. Under SFAS No. 128, basic net earnings (loss)
per common share is calculated by dividing net earnings (loss) by the
weighted-average number of common shares outstanding during the reporting
period. Diluted net earnings (loss) per common share reflects the effects of
potentially dilutive securities where the effect of inclusion of such securities
would not be anti-dilutive. Weighted average shares used to compute net earnings
(loss) per share are presented below (in thousands):
Three months ended
March 31,
2003 2002
---------------- ----------------
Weighted-average shares, basic 3,083 3,140
Dilutive effect of stock options - -
---------------- ----------------
Weighted-average shares-
basic and diluted 3,083 3,140
================ ================
Options to purchase 83,000 and 73,000 shares of potentially dilutive common
stock were excluded from the calculation of diluted net earnings (loss) per
share for the three months ended March 31, 2003, and March 31, 2002
respectively, because the effects of these instruments were anti-dilutive.
6
AMISTAR CORPORATION
Notes to Condensed Financial Statements, continued
(Unaudited)
Industrial Development Bonds
- ----------------------------
The Company maintains a letter of credit from its bank in support of the
$2,900,000 industrial development bonds. On February 1, 2002, the Company paid
$1,500,000 to redeem a portion of the industrial development bonds utilizing the
restricted cash balance of $1,452,000 plus an additional $48,000 of unrestricted
cash. Effective March 1, 2002, the Company began making required monthly
payments of $10,000 per month into a sinking fund (restricted cash) for
redemption of the bonds. Redemption will occur in minimum increments of $100,000
as the funds accrete to the minimum redemption level. The first payment of
$100,000 was made on January 21, 2003. The terms of the Reimbursement Agreement
require the Company to make annual payments of $120,000 during 2003 and 2004 and
the balance of $2,760,000 in 2005.
The Company's stand-by letter of credit reimbursement agreement with its
bank contains certain affirmative financial covenants. At March 31, 2003, the
Company was not in compliance with the tangible net worth and debt service
covenants. The Company received waivers relating to these covenants through
September 30, 2003. The Company has made all required debt service payments on
the bonds. However, based on the uncertainty concerning the Company's ability to
meet the covenant after the waiver expires, and considering that a covenant
violation would constitute an event of default and allow the bank to call the
debt prior to maturity, the entire Industrial Development bonds balance has been
classified as a current liability in the accompanying balance sheets.
The inability of the Company to return to profitability could result in
default on the terms of the Union Bank of California Reimbursement Agreement,
which supports the stand-by letter of credit guaranteeing the Company's
performance on the industrial development bonds. In the event the Company
defaults and is unable to present a viable turn-around plan satisfactory to its
Bank, such event could cause the bank to require the Company to seek a
substitute guarantor, re-finance the building with alternative financing or sell
the San Marcos, California facility. The inability of the Company to
successfully substitute a guarantor or to re-finance the building could have an
adverse effect on the Company's business. The Company will continue to seek
waivers for any covenant violations in the future until a modification of the
covenants can be negotiated.
In the event the bank chooses to no longer forbear, management would
consider several options which include utilizing some portion of cash,
refinancing the building with alternative financing, a sale-leaseback or sale of
the San Marcos, California facility and relocation to a leased facility.
Management believes that it has the ability to execute its alternate plans in
the event that repayment of the Company's industrial bonds would be required in
2003, and the Company would have adequate finances to fund its operating,
investing and financing activities through 2003 under either scenario for
repayment of its Industrial Bonds.
The Company believes that cash provided from operations and cash balances
at March 31, 2003 will be adequate to support its operating and investing
requirements through 2003 and 2004.
7
AMISTAR CORPORATION
Notes to Condensed Financial Statements, continued
(Unaudited)
Industry Segments and Geographic Information
- --------------------------------------------
The following table summarizes the Company's two operating segments:
Amistar Industrial Automation ("AIA"), which encompasses the manufacture and
distribution of manufacturing machinery, specialty products, and related
accessories, and Amistar Manufacturing Services ("AMS"). The Company identifies
reportable segments based on the unique nature of operating activities, customer
base and marketing channels. Information is also provided by major geographical
area (dollars in thousands).
AIA
-------------------------------------
UNITED
STATES FOREIGN TOTAL AMS CORPORATE TOTAL
- ----------------------------------------------------------------------------------------------- ------------
Three months ended March 31, 2003
Net sales $ 593 $ 36 $ 629 $ 2,140 $ - $ 2,769
=========== =========== =========== =========== =========== ===========
Depreciation and amortization 29 - 29 58 7 94
=========== =========== =========== =========== =========== ===========
Income/(Loss) from operations (196) (11) (207) 65 - (142)
=========== =========== =========== =========== =========== ===========
Total assets 4,456 70 4,526 2,157 3,950 10,633
=========== =========== =========== =========== =========== ===========
Additions to long-lived assets 35 - 35 - - 35
=========== =========== =========== =========== =========== ===========
THREE MONTHS ENDED MARCH 31, 2002
Net sales $ 349 $ 39 $ 388 $ 2,253 $ - $ 2,641
=========== =========== =========== =========== =========== ===========
Depreciation and amortization 59 - 59 100 - 159
=========== =========== =========== =========== =========== ===========
Loss from operations (268) (31) (299) (209) - (508)
=========== =========== =========== =========== =========== ===========
Total assets 5,163 50 5,213 2,124 4,704 12,041
=========== =========== =========== =========== =========== ===========
Additions to long-lived assets 2 - 2 - - 2
=========== =========== =========== =========== =========== ===========
8
AMISTAR CORPORATION
Notes to Condensed Financial Statements, continued
(Unaudited)
Product Warranty Information
- ----------------------------
The Company provides for the estimated cost of product warranties at
the time revenue is recognized. While the Company engages in extensive product
quality programs and processes, including actively monitoring and evaluating the
quality of its component suppliers, the Company's warranty obligation is
affected by product failure rates and the related material usage, field service
and delivery costs incurred in correcting a product failure. Should actual
product failure rates, material usage, or service delivery costs differ from the
Company's estimates, revisions to the estimated warranty liability would be
required.
Warranty cost and accrual information is as follows for the three
months ended March 31, 2003:
Charged to
Balance at costs and Balance at
Description 12/31/2002 expense Deductions 3/31/2003
----------- ---------- ------- ---------- ---------
Accrued Warranty Costs $ 45,876 $ 7,160 $ (7,160) $ 45,876
=========== =========== =========== ==========
9
AMISTAR CORPORATION
Notes to Condensed Financial Statements, continued
(Unaudited)
Stock-Based Compensation
- ------------------------
In December 2002, the FASB issued FAS No. 148, "Accounting for Stock-Based
Compensation -- Transition and Disclosure", which amended FAS No. 123,
"Accounting for Stock-Based Compensation." The new standard provides alternative
methods of transition for a voluntary change to the fair market value based
method for accounting for stock-based employee compensation. Additionally, the
statement amends the disclosure requirements of FAS No. 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. This statement is effective for financial statements
for the year ended December 31, 2002. In compliance with FAS No. 148, the
Company has elected to continue to follow the intrinsic value method in
accounting for its stock-based employee compensation plan as defined by APB No.
25 and has made the applicable disclosures below.
Had the Company determined employee stock based compensation cost based on
a fair value model at the grant date for its stock options under SFAS 123, the
Company's net earnings (loss) per share would have been adjusted to the pro
forma amounts for the three months ended March 31, 2003 and 2002 as follows ($
in thousands, except per share amounts):
2003 2002
---- ----
Net loss - as reported $ (146) $ (102)
Stock-Based employee compensation
expense included in reported net
income, net of tax
- -
Total stock-based employee
compensation expense determined
under fair-value-based method for all
rewards, net of tax (5) (3)
-----------------------
Pro forma net income $ (151) $ (105)
=======================
Earnings (loss) per share:
Basic, as reported (0.05) (0.03)
Diluted, as reported (0.05) (0.03)
Basic, pro forma (0.05) (0.03)
Diluted, pro forma (0.05) (0.03)
10
AMISTAR CORPORATION
Notes to Condensed Financial Statements, continued
(Unaudited)
Stock option activity during the first three months of fiscal 2003 was as
follows:
Number Weighted average
(Shares in thousands) of shares exercise price
--------------------- -------------- --------------
Outstanding, Dec 31, 2002 165,000 $ 1.86
Granted 86,000 0.82
Exercised - -
Expired (16,000) 2.75
-------------- -------------
Outstanding, March 31, 2003 235,000 $ 1.41
============== =============
11
AMISTAR CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Forward Looking Statements
- --------------------------
This Quarterly Report contains forward-looking statements within the
meaning of the Private Securities Reform Act of 1995, particularly statements
regarding market opportunities, customer acceptance of products, gross margin
and marketing expenses. These forward-looking statements involve risks and
uncertainties, and the cautionary statements set forth below identify important
factors that could cause actual results to differ materially from those in any
such forward-looking statements. Such factors include, but are not limited to,
adverse changes in general economic conditions, including changes in the
specific markets for the Company's products, product availability, decreased or
lack of growth in the electronics industry, adverse changes in customer order
patterns, increased competition, lack of acceptance of new products, pricing
pressures, lack of success in technological advancements, risks associated with
foreign trade and other factors.
RESULTS OF OPERATIONS
Net Sales
- ---------
Net sales for the three months ended March 31, 2003 were $2,769,000
compared to $2,641,000 for the same period in the prior year, an increase of
4.6%. During the current quarter, the Amistar Industrial Automation ("AIA")
division shipped two of its DataPlace machines, whereas no machines were shipped
during the first quarter of 2002.
The AIA division began shipping specialty equipment to new customers in the
veterinary products and food irradiation industries. The AIA division booked
orders expected to ship in the second and third quarters of 2003 from customers
doing business in the golf club assembly and eyeglass lens manufacturing
industries.
The Amistar Manufacturing Services division ("AMS") sales declined 5% for
the three months ended March 31, 2003, from the same period in 2002 primarily
due to the absence of orders from customers who chose to move production
off-shore. Sales were relatively flat compared to the fourth quarter of 2002.
Gross Profit
- ------------
Gross profit increased $378,000 (236%) to $538,000 during the quarter ended
March 31, 2003 compared to $160,000 in the same period in 2002. This increase
was primarily due to the sale of two Dataplace machines in the first quarter
2003, whereas in the 2002 quarter no machines were sold, and due to improved
labor efficiencies in the manufacturing services division as well as lower costs
of purchased components. During the current quarter, manufacturing services
margins increased to 18.2% in the first quarter of 2003 from 7.4% in the first
quarter of 2002.
Selling Expenses
- ----------------
Selling expenses increased 11% in the current quarter from the third
quarter of 2002 primarily due to increased commissions and a reassignment of
personnel.
12
AMISTAR CORPORATION
General and Administrative Expenses
- -----------------------------------
The general and administrative expenses decreased 6%, from $259,000 in the
first quarter of 2002 to $243,000 in the first quarter of 2003. This decrease
was primarily as a result of lower consulting fees.
Engineering, Research and Development Expenses
- ----------------------------------------------
Research and development expenses remained relatively flat in the current
quarter over the same period in 2002. The engineering group was primarily
focused on developing enhancements for existing products.
Income Taxes
- ------------
On March 9, 2002, the "Job Creation and Worker Assistance Act of 2002"
("the Act") was signed into law. The Act extends the period in which a net
operating loss may be carried back. As a result, the Company recognized a
$400,000 carry-back refund benefit and receivable during the three months ended
March 31, 2002, which was partially offset by a $2,000 provision for the minimum
tax liability to various states. No comparable benefit was available in the
current quarter.
A 100% valuation allowance was recorded against deferred tax assets.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash provided from operating activities was $444,000 for the
three months ended March 31, 2003. Most of the increase was due to the
collection of receivables and a reduction in the number of days receivables were
outstanding. In addition, the Company was able to reduce inventory balances
$85,000 during the quarter, primarily due to reimbursement of AMS inventories
from inactive customers and the sale of two Dataplace machines.
The Company maintains a letter of credit from its bank in support of the
$2,900,000 industrial development bonds. On February 1, 2002, the Company paid
$1,500,000 to redeem a portion of the industrial development bonds utilizing the
restricted cash balance of $1,452,000 plus an additional $48,000 of unrestricted
cash. Effective March 1, 2002, the Company began making required monthly
payments of $10,000 per month into a sinking fund (restricted cash) for
redemption of the bonds. Redemption will occur in minimum increments of $100,000
as the funds accrete to the minimum redemption level. The first payment of
$100,000 was made on January 21, 2003. The terms of the Reimbursement Agreement
require the Company to make annual payments of $120,000 during 2003 and 2004 and
the balance of $2,760,000 in 2005.
The Company's stand-by letter of credit reimbursement agreement with its
bank contains certain affirmative financial covenants. At March 31, 2003, the
Company was not in compliance with the tangible net worth and debt service
covenants. The Company received waivers relating to these covenants through
September 30, 2003. The Company has made all required debt service payments on
the bonds. However, based on the uncertainty concerning the Company's ability to
meet the covenant after the waiver expires, and considering that a covenant
violation would constitute an event of default and allow the bank to call the
debt prior to maturity, the entire Industrial Development bonds balance has been
classified as a current liability in the accompanying balance sheets.
13
AMISTAR CORPORATION
The inability of the Company to return to profitability could result in
default on the terms of the Union Bank of California Reimbursement Agreement,
which supports the stand-by letter of credit guaranteeing the Company's
performance on the industrial development bonds. In the event the Company
defaults and is unable to present a viable turn-around plan satisfactory to its
Bank, such event could cause the bank to require the Company to seek a
substitute guarantor, re-finance the building with alternative financing or sell
the San Marcos, California facility. The inability of the Company to
successfully substitute a guarantor or to re-finance the building could have an
adverse effect on the Company's business. The Company will continue to seek
waivers for any covenant violations in the future until a modification of the
covenants can be negotiated.
In the event the bank chooses to no longer forbear, management would
consider several options which include utilizing some portion of cash,
refinancing the building with alternative financing, a sale-leaseback or sale of
the San Marcos, California facility and relocation to a leased facility.
Management believes that it has the ability to execute its alternate plans in
the event that repayment of the Company's industrial bonds would be required in
2003, and the Company would have adequate finances to fund its operating,
investing and financing activities through 2003 under either scenario for
repayment of its Industrial Bonds.
The Company believes that cash provided from operations and cash balances
at March 31, 2003 will be adequate to support its operating and investing
requirements through 2003 and 2004.
New Accounting Pronouncements
- -----------------------------
In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),"
Consolidation of Variable Interest Entities." The adoption of FIN 46 did not
have a material impact on the Company's financial position or results of
operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to a variety of risks, including changes in interest
rates affecting the cost of its debt. The Company's long-term debt at March 31,
2003 is comprised of $2,900,000 Industrial Development bonds. The bonds mature
in December 2005, and accrue interest at a variable monthly rate. Interest was
paid at a weighted-average variable rate of 0.92% during the quarter ending
March 31, 2003. An immediate 10% increase in the weighted-average interest rate
would not have a material impact on the Company's financial position or results
of operations.
14
AMISTAR CORPORATION
ITEM 4. CONTROLS AND PROCEDURES
On February 3, 2003, management conducted an evaluation, under the
supervision of and with the participation of the Company's Chief Executive
Officer and Chief Financial Officer of the effectiveness of the Company's
disclosure controls and procedures. Based on this evaluation, management
believes the disclosure controls and procedures in place are effective to ensure
that information required to be disclosed by the Company in the reports that it
files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms.
Since the date of management's evaluation of its internal disclosure
controls there have been no significant changes in the Company's internal
disclosure controls or in other factors that could significantly affect internal
disclosure controls subsequent to the date the Company completed its evaluation.
PART II. OTHER INFORMATION
ITEMS 1-5 Non-Applicable
NOTICE FROM STOCK EXCHANGE
The company received notice on October 4, 2002 that it is subject to
de-listing from the NASDAQ Small Cap Market for failure to meet the minimum
closing bid price requirement of $1.00 for the prior 30 days. The Company was
initially granted 180 days or until April 1, 2003 to comply with the minimum
closing bid price requirement or possibly face de-listing. On April 2, 2003, the
Company was notified that it had been granted an additional 180 days or until
September 29, 2003 to regain compliance with the minimum closing bid price
requirement of $1.00 for ten consecutive days. In the event the Company fails to
comply with the minimum bid price requirement at the end of the 180-day period,
the Company believes it will qualify for a 90-day additional extension based on
compliance with the initial listing requirements.
15
AMISTAR CORPORATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
99.1 Certification of Chief Executive Officer and Chief Financial
Officer
99.2 Certification of Chief Executive Officer and Chief Financial
Officer
(b) Reports on form 8-K:
Change in Registrant's Certifying Accountant
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
Subsequent to the quarter ended March 31, 2003, the Registrant filed a
Form 8-K on April 4, 2003 regarding changes in registrants certified
accountants.
On April 1, 2003, the Company's audit committee, as affirmed by the
board of directors, dismissed KPMG, LLP ("KPMG") as the Company's independent
auditors for the year ending December 31, 2003, and appointed BDO Seidman, LLP,
as the Company's independent auditors.
The decision to change auditors is the result of the Company's ongoing
efforts to reduce expenses.
KPMG's reports on the Company's financial statements for the fiscal
years ended December 31, 2002 and 2001, did not contain any adverse opinion or
disclaimer of opinion, nor were such reports qualified or modified as to
uncertainty, audit scope or accounting principles.
During the fiscal years ended December 31, 2002 and 2001, and through
the subsequent period ended April 1, 2003, there were no disagreements with KPMG
on any matter of accounting principle or practice, financial statement
disclosure, or auditing scope or procedure which, if not resolved to KPMG's
satisfaction, would have caused them to make reference to the subject matter of
the disagreement in connection with the audit reports on the Company's financial
statements for such years.
The Company has provided KPMG with a copy of the foregoing disclosure
and has requested that KPMG furnish it with a letter addressed to the Securities
and Exchange Commission stating whether or not it agrees with the above
statements. Attached as Exhibit 16.1 is a copy of KPMG's letter.
Neither the Company nor anyone engaged on its behalf has consulted with
BDO Seidman, LLP during the Company's two most recently completed fiscal years
or during its current fiscal year with regard to either: (i) the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's financial
statements; or (ii) any other matters or reportable events as set forth in Items
304(a)(2)(i) and (ii) or Regulation S-K.
16
AMISTAR CORPORATION
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.
AMISTAR CORPORATION
By /s/ Gregory D. Leiser
---------------------------------
Gregory D. Leiser
Vice President Finance and Chief
Financial Officer (Principal
Financial and Accounting Officer)
17