10-Q 1 q10602.txt 6/30/02 SECURITIES AND EXCHANGE COMMISSION WASHINGTON D. C. 20549 FORM 10Q Quarterly Report Under Section 13 or 15 (d) Of the Securities Exchange Act of 1934 For the Quarter ended June 30, 2002 Commission File Number 0-10125 Radiant Technology Corporation ------------------------------ (Exact name of registrant as specified in its charter) California 95-2800355 ---------------------- ---------------------- (State or other jurisdiction of (I.R.S Employer incorporation or organization) identification number) 1335 South Acacia Avenue, Fullerton, CA 92831 --------------------------------------------- (Address of principal executive offices)(Zip Code) (714) 991 - 0200 ---------------- (Registrant's Telephone number, including area code) Inapplicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____ ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, no par value 2,081,678 -------------------------- ----------------------- (Class) (Outstanding at June 30, 2002) 1 RADIANT TECHNOLOGY CORPORATION INDEX Part I Financial Information:...........................................Page No. Condensed Balance Sheet- June 30, 2002 and September 30, 2001 (unaudited)...................................3 Condensed Statement of Operations - Three Months Ended June 30, 2002 and 2001 (unaudited).............................4 Condensed Statement of Operations - Nine Months Ended June 30, 2002 and 2001 (unaudited).............................4 Condensed Statement of Cash Flows - Three Months Ended June 30, 2002 and 2001 (unaudited).............................5 Condensed Statement of Cash Flows - Nine Months Ended June 30, 2002 and 2001 (unaudited).............................6 Notes to Condensed Financial Statements (unaudited)...................7 Management's Discussion and Analysis of Financial Condition and Results of Operation.................................7-8 Part II Other Information: Legal Proceedings and Exhibits........................................9 Signature Page........................................................9 2 RADIANT TECHNOLOGY CORPORATION PART I FINANCIAL INFORMATION CONDENSED BALANCE SHEETS (UNAUDITED) ASSETS June 30 September 30 2002 2001 ----------- ----------- Current Assets Cash $ 198,971 $ 1,118,630 Accounts Receivable - Net 867,689 407,814 Inventories 901,668 845,823 Prepaid Expenses 37,805 53,467 Deferred Income Taxes 263,500 283,500 ----------- ----------- Total Current Assets 2,269,633 2,709,234 Machinery and Equipment - Net 194,120 252,243 Other Assets 5,298 5,035 ----------- ----------- Total Assets $ 2,469,051 $ 2,966,512 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $ 437,370 $ 274,582 Accrued Expenses 191,162 216,080 Customer Deposits 101,568 200,663 ----------- ----------- Total Current Liabilities 730,100 691,325 ----------- ----------- Stockholders' Equity Common Stock, no par value 1,167,608 1,167,608 Retained Earnings 571,343 1,107,579 ----------- ----------- Total Stockholders' Equity 1,738,951 2,275,187 ----------- ----------- Total Liabilities and Stockholders' Equity $ 2,469,051 $ 2,966,512 =========== =========== 3 RADIANT TECHNOLOGY CORPORATION PART I FINANCIAL INFORMATION-CONTINUED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Nine Months Ended June 30 June 30 ------- ------- 2002 2001 2002 2001 ---- ---- ---- ---- Net Sales $1,743,088 $1,029,034 $2,999,123 $4,506,715 Cost of Sales 1,297,153 773,458 2,253,201 3,161,459 ========= ======= ========= ========= --------- ------- --------- --------- Gross Profit 445,935 255,576 745,922 1,345,256 Operating Expenses: Selling, general and administrative 399,438 232,807 1,199,468 1,068,089 Depreciation and amortization 29,096 31,586 92,116 100,835 ------ ------ ------ ------- Total Operating Expenses 428,534 264,393 1,291,584 1,168,924 ------- ------- --------- --------- Income (Loss) from Operations 17,401 (8,817) (545,662) 176,332 Interest Income, net 1,277 13,014 10,227 43,874 ------- ------- --------- -------- Income (Loss) Before Tax Provision 18,678 4,197 (535,435) 220,206 Provision for Income Taxes - - 800 8,528 -------- -------- --------- --------- Net Income (Loss) $18,678 $4,197 $(536,235) $211,678 ======== ======== ========= ========= Basic Earning per Share: Net Income (Loss) $ 0.01 $ 0.00 $ (0.26) $ 0.10 ======= ======= ======== ======= Diluted Earning per Share: Net Income (Loss) $ 0.01 $ 0.00 $ (0.26) $ 0.10 ======= ======= ======== ======= Basic Weighted Average 2,081,678 2,081,678 2,081,678 2,026,550 shares outstanding ========= ========= ========= ========= Diluted Weighted Average 2,205,659 2,250,578 2,081,678 2,195,450 shares outstanding ========= ========= ========= =========

4 RADIANT TECHNOLOGY CORPORATION PART I FINANCIAL INFORMATION-CONTINUED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED) Three Months Ended June 30, -------- 2002 2001 ----------- ----------- Cash Flows From Operating Activities: Net Income (Loss) $ 18,678 $ 4,197 Adjustments To Reconcile Income To Net Cash From Operating Activities: Depreciation And Amortization 29,879 31,588 Changes In Assets And Liabilities: Accounts Receivable (530,350) 99,699 Inventories 272,928 24,371 Prepaid Expenses (1,810) (4,128) Other Assets -- -- Accounts Payable 269,803 67,440 Accrued Expenses (14,209) (97,123) Customer Deposits (173,805) (37,501) Income Tax Payable -- -- ----------- ----------- Net Cash Provided By (Used By) Operating Activities (128,886) 88,543 ----------- ----------- Cash Flows Used By Investing Activities: Purchase Of Property And Equipment (14,218) (73,426) ----------- ----------- Cash Flows From Financing Activities: -- -- ----------- ----------- Net Increase (Decrease) In Cash (143,104) 15,117 Cash At Beginning Of Period 342,075 1,128,416 ----------- ----------- Cash At End Of Period $ 198,971 $ 1,143,533 =========== ===========

5 RADIANT TECHNOLOGY CORPORATION PART I FINANCIAL INFORMATION-CONTINUED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED) Nine Months Ended June 30, ----------- 2002 2001 ---- ---- Cash Flows From Operating Activities: Net Income (Loss) $ (536,235) $ 211,678 Adjustments To Reconcile Income To Net Cash From Operating Activities: Depreciation And Amortization 92,116 100,835 Changes In Assets And Liabilities: Accounts Receivable (459,875) 988,730 Inventories (55,845) (213,448) Prepaid Expenses 15,681 22,150 Other Assets (1,340) 11,443 Deferred Taxes 20,000 -- Accounts Payable 162,788 (119,381) Accrued Expenses (24,918) (1,851) Customer Deposits (99,095) (788,581) Tax Payable -- 8,528 ----------- ----------- Net Cash Provided By (Used By) Operating Activities (886,723) 220,103 ----------- ----------- Cash Flows Used By Investing Activities: Purchase Of Property And Equipment (32,936) (118,078) ----------- ----------- Cash Flows Used By Financing Activities: Stock Issued For Cash -- 13,125 Repayment Of Line Of Credit -- (500,000) ----------- ----------- Net Cash Used By Financing Activities -- (486,875) ----------- ----------- Net Decrease In Cash (919,659) (384,850) Cash At Beginning Of Period 1,118,630 1,528,383 ----------- ----------- Cash At End Of Period $ 198,971 $ 1,143,533 =========== ===========

6 RADIANT TECHNOLOGY CORPORATION PART I FINANCIAL INFORMATION - CONTINUED NOTES TO CONDENSED FINANCIAL STATEMENTS FOR JUNE 30, 2002 (UNAUDITED) ITEM 1 - Notes 1. General ------- The accompanying unaudited condensed financial statements of Radiant Technology Corporation (the "Company") have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended September 30, 2001. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for the fair presentation have been included. Operating results for interim periods are not necessarily indicative of results expected for a full year. ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operation All statements, other than statements of historical fact, included in this Form 10-Q are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements contained in this Form 10-Q. Financial Condition, Liquidity and Capital Resources ---------------------------------------------------- The Company's cash and equivalents decreased from $1,118,630 at September 30, 2001 to $198,971 at June 30, 2002. This significant decrease of $919,659 is primarily attributable to the net loss and the increase in accounts receivable. The purchase of equipment accounted for the cash used in investing activities of $32,936. Management believes that the expected revenues from operations, supplemented by the cash on hand, will be sufficient to provide adequate cash to fund anticipated working capital and other cash needs during the remainder of the year. The Company's order backlog at June 30, 2002 was approximately $1,000,000. 7 ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued Results of Operations --------------------- Three Months Ended March 31, 2002 --------------------------------- Net Sales were $1,743,088 and $1,029,034 for the three months ended June 30, 2002 and 2001, respectively, or an increase of 69%. The increase in revenues resulted principally from an increase in orders booked in the second quarter of the current fiscal year, including one order that represented approximately 35% of sales for the current quarter. The cost of sales as a percentage of sales for the three months ended June 30, 2002 was 74%, as compared to 75% in the prior year third quarter. Although sales increased significantly in the quarter, the one order that represented more than one-third of sales for the quarter had a higher cost of sales that affected the current quarter margins. This system was a newly designed product for the semiconductor industry, and higher costs were incurred in its initial design and manufacture. Future systems of this type are expected to have higher margins. Selling, general and administrative expenses were $399,438 in the current quarter as compared to $232,807 in the year earlier period, an increase of 72%. This increase was mainly due to increased payroll and related expenses in engineering, research and development and sales and marketing. The profit in the current year period was the result of increased revenues, which offsets the increased selling, engineering and research and development expenses. Nine Months Ended June 30, 2002 ------------------------------- Net sales were $2,999,123 and $4,506,715 for the nine months ended June 30, 2002 and 2001, respectively, a decrease of 33%. The decrease in revenues in the first nine months of 2002 as compared to 2001 resulted primarily from reduced orders from the semiconductor industry. Cost of sales increased as a percentage of sales for the nine months ended June 30, 2002 to 75%, compared to the 70% recorded in the nine months ended June 30, 2001 The increase is partially attributed to fixed manufacturing expenses for facilities and labor that represent a higher percentage of net sales because the net sales are significantly lower. Additionally, the higher costs of one significant order in the third quarter also affected the year-to-date margins. Selling, general and administrative expenses were $1,199,468 in the current year period, as compared to $1,068,089 in the year earlier nine months. The increase of 12 % was primarily due to increased payroll and related costs in engineering, research and development, sales and marketing. The net loss for the nine months ending June 30, 2002 was primarily the result of the decline in revenues. 8 RADIANT TECHNOLOGY CORPORATION PART II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 6. Reports on 8-K None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RADIANT TECHNOLOGY CORPORATION ------------------------------ (Registrant) Dated: August 10, 2002 /s/ L. R. McNamee ------------------------------ Lawrence R. McNamee Chairman of the Board, Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) The written statements of our Chief Executive Officer and Chief Financial Officer required pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, accompanied the filing of this report by correspondence to the Securities and Exchange Commission. 9

December 31 September 30 2001 2001 ----------- ----------- Current Assets: Cash and Equivalents $ 821,722 $ 1,118,630 Accounts Receivable 599,389 407,814 Inventories 726,174 845,823 Prepaid Expenses 74,859 53,467 Deferred Taxes 263,500 283,500 ----------- ----------- Total Current Assets 2,485,644 2,709,234 Property and Equipment 228,927 252,243 Other Assets 5,511 5,035 ----------- ----------- Total Assets $ 2,720,082 $ 2,966,512 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 113,550 $ 274,582 Accrued Expenses 179,405 216,080 Customer Deposits 524,609 200,663 ----------- ----------- Total Current Liabilities 817,564 691,325 ----------- ----------- Stockholders' Equity Common Stock 1,167,608 1,167,608 Retained Earnings 734,910 1,107,579 ----------- ----------- Total Stockholders' Equity 1,902,518 2,275,187 ----------- ----------- Total Liabilities and Stockholders' Equity $ 2,720,082 $ 2,966,512 =========== ===========

THREE MONTHS ENDED December 31 ----------- 2001 2000 ----------- ----------- Net Sales $ 655,139 $ 1,700,223 Cost Of Sales 515,746 1,056,876 ----------- ----------- Gross Profit 139,393 643,347 ----------- ----------- Operating Expenses Selling, General and Administrative 486,453 460,624 Depreciation and Amortization 31,046 38,127 ----------- ----------- Total Operating Expenses 517,499 498,751 ----------- ----------- Income (Loss) From Operations (378,106) 144,596 Interest Income, Net 6,238 15,363 ----------- ----------- Income (Loss) Before Provision For Income Taxes (371,868) 159,959 Provision For Income Taxes 800 14,900 ----------- ----------- Net Income (Loss) $ (372,668) $ 145,059 =========== =========== Earnings Per Share: Basic Earnings (Loss) Per Share Net Income (Loss) $ (0.18) $ 0.08 =========== =========== Diluted Earnings (Loss) Per Share Net Income (Loss) $ (0.18) $ 0.07 =========== =========== Basic Number of Common Shares Outstanding 2,081,678 1,916,400 =========== =========== Diluted Number of Common Shares Outstanding 2,081,678 2,070,899 =========== ===========

THREE MONTHS ENDED December 31 --------------------- 2001 2000 ---- ---- Cash Flows From Operating Activities: Net Income (Loss) $ (372,668) $ 145,059 Adjustments To Reconcile Income To Net Cash Used In Operating Activities: Depreciation And Amortization 31,046 38,127 Changes In Assets And Liabilities: (Increase) Decrease in: Accounts Receivable (191,575) 407,348 Inventories 119,649 (434,168) Prepaid Expenses & Other Assets (1,392) 13,195 Increase (Decrease) in: Accounts Payable (161,032) (98,911) Accrued Expenses (36,675) 100,837 Customer Deposits 323,946 (196,193) ----------- ----------- Net Cash (Used In) Operating Activities (288,701) (24,706) ----------- ----------- Cash Flows From Investing Activities: Capital Expenditures (8,207) (17,547) ----------- ----------- Cash Flows From Financing Activities: Issuance of Common Stock -- 13,125 Repayment of Line of Credit -- (500,000) ----------- ----------- Net Cash (Used In) Financing Activities -- (486,875) ----------- ----------- Net (Decrease) in Cash and Equivalents (296,908) (529,128) ----------- ----------- Cash and Equivalents, Beginning of Year 1,118,630 1,528,383 ----------- ----------- Cash and Equivalents, End of year $ 821,722 $ 999,255 =========== ===========

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