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Swordfish Financial, Inc. – ‘10-Q’ for 6/30/00

On: Wednesday, 7/26/00, at 1:26pm ET · For: 6/30/00 · Accession #: 897101-0-731 · File #: 0-07475

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 7/26/00  Swordfish Financial, Inc.         10-Q        6/30/00    2:16K                                    American Fin’l P… Inc/FA

Quarterly Report — Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                       9     32K 
 2: EX-27       Financial Data Schedule                                1      5K

10-Q — Quarterly Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Changes in Securities Financial Information Results of Vote of Security Holders
1	1st Page - Filing Submission
2	Item 1:. Financial Information
9	Item 2. Changes in Securities
"	Item 4. Results of Vote of Security Holders

10-Q 1st Page of 9 TOC ↑Top Previous Next ↓Bottom Just 1st
 
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 FORM 10-Q

 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended June 30, 2000                    Commission File Number 0-7475
-------------------------------                    -----------------------------

 PHOTO CONTROL CORPORATION
 -------------------------
(Exact Name of Registrant as Specified in its Charter)

Minnesota                                                    41-0831186         
---------                                                    ----------         
(State or Other Jurisdiction of                              (I.R.S. Employer   
 Incorporation or Organization)                              Identification No.)

4800 Quebec Avenue North, Minneapolis, Minnesota                        55428   
------------------------------------------------                        -----   
  (Address of Principal Executive Offices)                            (Zip Code)

Registrant's Telephone Number  (763) 537-3601                                   
--------------    

--------------------------------------------------------------------------------
  (Former name, former address, and former fiscal year if changes 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 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 the number of shares outstanding of each of the issuer's classes of    
common stock, as of the close of the period covered by this report.             

         Class                                      Outstanding at July 14, 2000
-------------------------------                     ----------------------------
Common Stock, par value $.08                             1,604,163 Shares     

1 

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 PHOTO CONTROL CORPORATION
 INDEX

PART I                                                             Page Number  
------                                                             -----------  

ITEM 1:  Financial Information                                        

Balance Sheet -                                 
           June 30, 2000 and December 31, 1999                   3

Statement of Operations -                       
Six Months and Three Months Ended           
           June 30, 2000 and 1999                                4

Statement of Cash Flows -                       
           Six Months Ended June 30, 2000 and 1999               5

         Notes to Financial Statements                           6

ITEM 2:     Management's Discussion and Analysis                        
of Financial Condition and Results of       
           Operations                                            7

PART II                                                                         
-------                                                                         

ITEM 2:     Changes in Securities                                   9   

ITEM 4:     Results of Vote of Security Holders                     9   

ITEM 6:     Exhibits and Reports on Form 8-K                        9   

 2

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 PHOTO CONTROL CORPORATION
 BALANCE SHEET
 (UNAUDITED)

                                                                [Download Table]

                                                   JUNE 30      DECEMBER 31 
                                                    2000           1999     
                                                    ----           ----     
                                                                            
             ASSETS                                                         
             ------                                                         
Current Assets                                                              
--------------                                                              
   Cash                                         $  1,245,001   $    819,302 
   Accounts Receivable                               934,349        647,597 
   Inventories                                     4,312,384      4,478,640 
   Prepaid Expenses                                                  74,430 
                                                ------------   ------------ 
         Total Current Assets                      6,491,734      6,019,969 
                                                ------------   ------------ 
Other Assets                                                                
------------                                                                
   Cash Value of Life Insurance                      321,660        308,166 
   Deferred Income Taxes                             160,000        160,000 
                                                ------------   ------------ 
         Total Other Assets                          481,660        468,166 
                                                ------------   ------------ 
Plant and Equipment                                                         
-------------------                                                         
   Land and Building                               2,293,818      2,293,818 
   Machinery and Equipment                         2,994,009      3,173,990 
   Accumulated Depreciation                       (3,769,391)    (3,846,133)
                                                ------------   ------------ 
         Total Plant and Equipment                 1,518,436      1,621,675 
                                                ------------   ------------ 
                                                $  8,491,830   $  8,109,810 
                                                ============   ============ 

          LIABILITIES AND STOCKHOLDERS' EQUITY                              
          ------------------------------------                              

Current Liabilities                                                         
-------------------                                                         
   Accounts Payable                             $    442,132   $    281,417 
   Accrued Payroll and Employee Benefits             247,001        220,848 
   Accrued Expenses                                  404,575        264,952 
   Customer Deposit                                                 406,250 
                                                ------------   ------------ 
         Total Current Liabilities                 1,093,708      1,173,467 
                                                ------------   ------------ 

Other Accrued Expense                                725,166        685,148 
---------------------                           ------------   ------------ 

Stockholders' Equity                                                        
--------------------                                                        
   Common Stock                                      128,333        128,333 
   Additional Paid-In Capital                      1,393,484      1,393,484 
   Retained Earnings                               5,151,139      4,729,378 
                                                ------------   ------------ 
         Total Stockholders' Equity                6,672,956      6,251,195 
                                                ------------   ------------ 
                                                $  8,491,830   $  8,109,810 
                                                ============   ============ 

 See accompanying notes to financial statements.

3 

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 PHOTO CONTROL CORPORATION

 STATEMENT OF OPERATIONS

 (unaudited)

                                                                [Download Table]

                                      THREE MONTHS              SIX MONTHS        
                                      ENDED JUNE 30            ENDED JUNE 30      
                                      -------------            -------------      

                                   2000          1999        2000          1999   
                                   ----          ----        ----          ----   
                                                                                  
Net Sales                       $3,718,870    $2,744,327  $5,827,462    $4,573,879
Cost of Sales                    2,591,760     1,881,113   4,175,140     3,234,830
                                ----------    ----------  ----------    ----------
   Gross Profit                  1,127,110       863,214   1,652,322     1,339,049

Expenses                                                                          
   Marketing & Administrative      496,445       425,089     964,207       924,660
   Research, Development & Eng.    125,172       154,901     266,354       331,191
                                ----------    ----------  ----------    ----------

                                   621,617       579,990   1,230,561     1,255,851
                                ----------    ----------  ----------    ----------

Net Income                      $  505,493    $  283,224  $  421,761    $   83,198
                                ==========    ==========  ==========    ==========

Net Income Per Common                                                             
   Share - Basic                $      .31    $      .17  $      .26    $      .05
                                ==========    ==========  ==========    ==========
Net Income Per Common                                                             
   Share - Diluted              $      .30    $      .17  $      .25    $      .05
                                ==========    ==========  ==========    ==========

 See accompanying notes to financial statements.

4 

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PHOTO CONTROL CORPORATION 

STATEMENT OF CASH FLOWS 

 (Unaudited)

                                                        [Enlarge/Download Table]

                                                                 SIX MONTHS          
                                                                ENDED JUNE 30        
                                                                -------------        

                                                             2000            1999    
                                                             ----            ----    
                                                                                     
Cash flows from operating activities:                                                
     Net from operations                                 $   421,762     $    83,198 
     Items not affecting cash-                                                       
         Depreciation                                        132,000         144,000 
         Deferred compensation                                75,000          75,000 
         Loss on sale of equipment                            12,889          36,600 
     Payment of deferred compensation                        (34,982)        (33,238)
     Change in:                                                                      
              Receivables                                   (286,752)       (505,530)
              Inventories                                    166,256        (606,486)
              Prepaid Expenses                                74,430          49,764 
              Accounts Payable                               160,714         433,798 
              Accrued Expenses                              (240,474)         24,596 
                                                         -----------     ----------- 
                  Net cash used by operating activities      480,843        (298,298)
                                                         -----------     ----------- 

Cash flows from investing activities:                                                
     Additions to plant and equipment                        (41,650)         (7,928)
     Additions to cash value of life insurance               (13,494)        (13,494)
                                                         -----------     ----------- 
                  Net cash used in investing activities      (55,144)        (21,422)
                                                         -----------     ----------- 

Change in cash                                               425,699        (319,720)
Cash at beginning of period                                  819,302         731,426 
                                                         -----------     ----------- 

Cash at end of period                                    $ 1,245,001     $   411,706 
                                                         ===========     =========== 

See Accompanying notes to financial statements

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 PHOTO CONTROL CORPORATION

 NOTES TO FINANCIAL STATEMENTS

 JUNE 30, 2000

 (UNAUDITED)

NOTE 1                                                                          

       Notes to financial statements presented herein do not include all the
footnotes normally presented in the Company's annual report to
stockholders.                                                 

  The accompanying financial statements reflect, in the opinion of
      management, all normal and recurring adjustments necessary to a fair
     presentation of financial position, results of operations, and cash
        flows for the interim periods. The results for interim periods are not
necessarily indicative of results to be expected for the year.

NOTE 2                                                                          

Inventories are analyzed as follows:                          

                                         JUNE 30         DECEMBER 31
                                      2000              1999
                                      ----              ----

       Raw Materials                 $ 3,959,239       $ 4,237,561

       Work in Progress                  352,786           257,031

       Finished Goods                  1,732,359         1,626,048

        Reserve for Obsolescence       (1,732,000)       (1,642,000)
                                     -----------       -----------

                                     $ 4,312,384       $ 4,478,640
                                     ===========       ===========

NOTE 3                                                                          

       Net Income per common share is computed based on the weighted average
      number of common shares outstanding during the period when computing
         the basic earnings per share. When dilutive, stock options are included
   as equivalents using the Treasury Stock method when computing the
diluted earnings per share.                                   

 6

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 PHOTO CONTROL CORPORATION

 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATION

RESULTS OF OPERATIONS                                                           

Sales for the second quarter ended June 30, 2000 were $3,719,000, an increase of
35.5% from the same quarter in the prior year. Sales for the six months ended   
June 30, 2000 were $5,827,000, an increase of 27.4% over the same period in the 
prior year. Lighting sales decreased $346,000 for the second quarter and        
$710,000 for the year to date period, as compared to the same periods in the    
prior year. A decrease in orders from large customers accounted for the sales   
decreases in the lighting product line. The camera product line accounts for an 
increase in sales of $1,340,000 for the second quarter and $1,950,000 for the   
year to date period, as compared to the same periods in the prior year. The     
increase in camera product line sales is attributable to the $6,200,000 camera  
contract for which shipment began in December of 1999 and will continue through 
April of 2001. As of June 30, 2000 the contract is forty-two percent complete.  
Sales of the third product line, printers, decreased by $19,000 for the second  
quarter and increased $14,000 for the year to date period, as compared to the   
same periods in the prior year. The sales trend for the printer line continues  
to decline because the optical photographic printer market continues to         
experience consolidation and excess capacity.                                   

The gross profit margin for the second quarter of 2000 decreased to 30.3% from  
31.5% in the second quarter of 1999. The gross profit margin for the six months 
ended June 30, 2000 decreased to 28.3% from 29.3% in the prior year period.     
Gross margin varies depending upon the product mix of sales. Management expects 
that the margins for the year 2000 will be approximately 28%.                   

Marketing and administrative expenses decreased as a percentage of sales to     
13.3% for the second quarter of 2000 from 15.5% for the second quarter of 1999  
and decreased to 16.5% for the first six months of 2000 from 20.2% for the same 
period in 1999. Marketing and administrative expenses increased $71,000 for the 
second quarter of 2000 as compared to the second quarter of 1999 and increased  
$40,000 for the first six months of 2000 compared to the same period in 1999.   
Research, development and engineering expense decreased by $30,000 for the      
second quarter of 2000 compared to the second quarter of 1999 and decreased by  
$65,000 for the first six months of 2000 compared to the same period of 1999.   
The increase in the marketing and administrative expense reflects additional    
compensation earned as the result of increased profitability. Research,         
development and engineering expense reflects the reorganization of the          
engineering department in 1999 which has resulted in lower cost, primarily due  
to a reduction in staff and increased efficiencies.                             

7 

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LIQUIDITY & CAPITAL RESOURCES                                                   

Cash increased by $426,000 to $1,245,000 since December 31, 1999. Operations for
the six months ended June 30, 2000 resulted in $481,000 of positive cash flow.  

At June 30, 2000 there is no borrowing under the line of credit. The Company can
borrow up to $1,000,000 under its line of credit. The line is unsecured, at the 
prime rate of interest and renewed annually in May.                             

The Company believes that its cash flow from future operations and available    
borrowing capacity will be sufficient to finance operations and capital         
requirements.                                                                   

FACTORS THAT MAY AFFECT FUTURE RESULTS                                          

Statements included or incorporated by reference in this Quarterly Report on    
Form 10-Q which are not historical in nature are identified as "forward looking 
statements" for the purposes of the safe harbor provided by Section 27A of the  
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange  
Act of 1934, as amended. The Company cautions readers that forward looking      
statements, including without limitation, those relating to the Company's future
business prospects, revenues, working capital, liquidity, capital needs,        
interest costs, and income, are subject to certain risks and uncertainties that 
could cause actual results to differ materially from those indicated in the     
forward looking statements. The risks and uncertainties include, but are not    
limited to, economic conditions, product demand and industry capacity,          
competitive products and pricing, manufacturing efficiencies, new product       
development and market acceptance, the regulatory and trade environment, and    
other risks indicated in filings with the Securities and Exchange Commission.   

8 

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ITEM 2. CHANGES IN SECURITIES                                                   

Common Stock          
------------          
                                Additional
                  Number of                    Paid In      Retained
                   Shares        Amount        Capital      Earnings
                   ------        ------        -------      --------
Balance at                                                                      
December 31,1999     1,604,163    $  128,333    $1,393,484    $4,729,378  

Net Income                                                          421,761     
                  ----------    ----------    ----------    ----------

Balance at                                                                      
June 30, 2000        1,604,163    $  128,333    $1,393,484    $5,151,139  
                  ==========    ==========    ==========    ==========

ITEM 4. RESULTS OF VOTE OF SECURITY HOLDERS                                     

At the annual meeting of stockholders held on May 11, 2000 the following matters
were approved by the Company's stockholders:                                    

     1.       Set the number of directors at six (6). The voting results
            were: 1,292,404 For, 28,578 Against and 2,225 Abstained.

    2.       Elected Messrs. James R. Loomis and John R. Helmen to the
                  Board of Directors for a three-year term or until the election
and qualification of a respective successor.

The voting results were as follows:         
                                     FOR         TO WITHHOLD AUTHORITY
      James R. Loomis      1,300,684              22,523
      John R. Helmen       1,289,140              34,067

                Messrs. Thomas J. Cassady, Mark J. Simonett, Scott S. Meyers
                 and Leslie A. Willig are directors of the Company whose terms
                 of office continued after the annual meeting of stockholders.

ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K                                         

A.      Exhibits - 27 Financial Data Schedule                                   
B.      Reports on Form 8-K - None                                              

   PHOTO CONTROL CORPORATION
                  ----------------------------------------
    (Registrant)
July 26, 2000                /s/ J. R. Helmen                                   
--------------------         ---------------------------------------------------
        Date                 J. R. Helmen, President and Chief Executive Officer

July 26, 2000                /s/ C. R. Jackels                                  
--------------------         ----------------------------------------           
Date                 C. R. Jackels, Vice President-Finance      

9

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10-Q’ Filing	Date	First	Last	Other Filings

Filed on:	7/26/00	9
	7/14/00	1
For Period End:	6/30/00	1	8
	5/11/00	9		DEF 14A
	12/31/99	8		10-K405
	6/30/99	2		10-Q
				List all Filings

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Filing Submission 0000897101-00-000731 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Swordfish Financial, Inc. – ‘10-Q’ for 6/30/00

On: Wednesday, 7/26/00, at 1:26pm ET · For: 6/30/00 · Accession #: 897101-0-731 · File #: 0-07475

Previous ‘10-Q’: ‘10-Q’ on 4/20/00 for 3/31/00 · Next: ‘10-Q’ on 10/13/00 for 9/30/00 · Latest: ‘10-Q/A’ on 12/6/17 for 9/30/17

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Quarterly Report — Form 10-Q
Filing Table of Contents

10-Q — Quarterly Report
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