-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SH0PzeSHTCkta3WFcJdWvQsBe50i79d33xIDUAXsF+lJ2L5fuigmzPcvMSaNANiM AsvgKf4gzcnXA8zTH2mgHg== 0000909012-99-000001.txt : 19990105 0000909012-99-000001.hdr.sgml : 19990105 ACCESSION NUMBER: 0000909012-99-000001 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19990104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METAL ARTS CO INC CENTRAL INDEX KEY: 0000320303 STANDARD INDUSTRIAL CLASSIFICATION: COATING, ENGRAVING & ALLIED SERVICES [3470] IRS NUMBER: 060945588 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-09998 FILM NUMBER: 99500062 BUSINESS ADDRESS: STREET 1: 1 AMERICAN CENTER CITY: GENEVA STATE: NY ZIP: 14456-1188 BUSINESS PHONE: 3157892200 MAIL ADDRESS: STREET 1: 1 AMERICAN CTR CITY: GENEVA STATE: NY ZIP: 14456-1188 10-K 1 ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) (X) Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Fee Required) For the fiscal year ended 6/30/98 or ( ) Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the transition period from ________ to ________ Commission file number 0-9998 ---------------------------- THE METAL ARTS COMPANY, INC. (Exact - -------------------------------------------------------------------------------- name of registrant as specified in its charter) NEW YORK 06-0945588 - -------------------------------- ----------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1 AMERICAN CENTER, GENEVA, NEW YORK 14456-1188 - ---------------------------------------- ------------ (Address of principal executive offices) (Zip Code) (315) 789-2200 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED ------------------- ------------------- NONE ------------------- ------------------- ------------------- ------------------- Securities registered pursuant to Section 12(g) of the Act: NONE - -------------------------------------------------------------------------------- (Title of Class) - -------------------------------------------------------------------------------- (Title of Class) 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 --- ---- State the aggregate market value of the voting stock held by non-affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within 60 days prior to the date of filing. (See definition of affiliate in Rule 405.) $1,060,637 (4,242,551 at $.25 Per share) Note. If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided that the assumptions are set forth in this form. APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No ----- ------ APPLICABLE ONLY TO CORPORATE REGISTRANTS: Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. 7,520,802 SHARES OF COMMON STOCK -------------------------------- PAR VALUE $.01 PER SHARE ------------------------ Page 2 of 44 Exhibit Page Appears on Page 43 PART I ITEM 1. BUSINESS Certain statements contained in this filing are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions, competition and other uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings. GENERAL Metal Arts Company, Inc. established in 1913 ("Metal Arts" or the "Company"), has operated as a holding company. Except where specific reference is made in this Part I to the individual operations of Metal Arts or its 70 percent owned subsidiary Coating Technology, Inc., references in the Part I to the "Company" are intended to be a reference to the collective operations of Metal Arts and Coating Technology. Coating Technology engages in contract electroless nickel, aluminum anodizing, electroless nickel and gold plating of circuit boards and other surface coating and enhancement operations. Metal Arts had outstanding liabilities of $1,405,749 as of the close of Fiscal 1998. A detailed description of these liabilities is set forth in the Financial Statements and Supplementary Data annexed as Item 8 to this Form 10-K. Specific reference is made to Notes 1 and 5 of these Financial Statements for information concerning specific liabilities. On June 30, 1994, the company undertook to offer twenty(20) of its $25,000 Principal Amount 8% Convertible Subordinated Debentures due June 30, 1999 ( the "Debentures"). The Debentures are convertible into common stock of the company at $.75 through June 30, 1996, $.95 per share from July 1, 1996 through June 30, 1988 and $1.25 per share thereafter, and grant the holder a warrant to purchase an equal number of common shares at $.85. As of September 30, 1994, eleven (11) Debentures had been subscribed for a total of $275,000. The Debentures were offered and issued under Section 4.2 of the Securities Act of 1993 and the rules and regulations thereunder. The proceeds from the Debenture were used to acquire a new Patented Technology for the plating of electroless nickel on aluminum and to commercialize that technology, initially to the Computer Hard Disk and Aluminum Automobile Wheel Markets. The Company's proprietary specialty chemicals consist of Microsmooth(R), a patented aluminum activator solution used in conjunction with a proprietary electroless-nickel bath for plating on aluminum. Both the products and process are proprietary, rendering a smoother surface with enhanced corrosion protection, elimination of several toxic chemicals, while reducing plating and waste treatment costs. Marketing efforts to the computer memory disk and aluminum wheel markets continue now. If successful in the U.S., it is the company's intention to market the technology or license it internationally. The technology was acquired for $50,000 cash, which was paid as of September 30, 1995. In addition, the seller has received 100,000 shares of Metal Arts common stock and an additional 100,000 shares of Metal Arts common stock upon the issuance of the patent. -3- As a result of this acquisition, Metal Arts will become an operating company, marketing its proprietary specialty chemicals to end users nationally. Compliance with environmental laws and regulations has a material and on-going impact on the company. The company must comply and the costs are both capital and operational. It has a positive impact in that certain companies that cannot comply are at a disadvantage, operationally. It has a negative impact in that the costs of compliance affects capital resources and cash flow. During the fiscal year 1998, Coating Technology spent approximately $55,000 on various compliance requirements. As new technologies and methods are available to the company, additional capital and operational costs will be incurred to comply with and/or reduce on-going expenses of waste treatment. THE COMPANY'S MARKETS During the past three fiscal years, substantially all of the company's sales were attributable to the operations of Coating Technology. Coating Technology provides surface coating services for various regional industries.
FISCAL YEARS (ENDING JUNE 30) ----------------------------- 1998 1997 1996 ---- ---- ---- Metal Arts $ 82,000 $ 44,000 $ -- Coating Technology 1,790,000 1,613,000 1,630,000 ---------- ---------- ---------- $1,872,000 $1,657,000 $1,630,000 ========== ========== ==========
THE COMPANY'S PRODUCTS Metal Arts is entering the Specialty chemical business, marketing its new process for plating electroless nickel on aluminum. The process consists of Microsmooth (R), a patented activator and a proprietary high-phosphorus electroless nickel formulation, initially to manufacturers of computer hard disks and aluminum wheels. Coating Technology is engaged in contract electroless and brite nickel and aluminum anodizing operations. Coating Technology services the office products industry through large, medium and small metal fabricating companies who in turn supply subassemblies and individual component parts to major office product manufacturers such as Xerox, Kodak, IBM, Cannon and others. In addition, Coating Technology provides electroless nickel and gold plating for the circuit board industry. It also provides other surface finishes to various contract customers. MANUFACTURING OPERATIONS Metal Arts' specialty chemical mixing operations will initially be conducted with existing equipment at Coating Technology. SURFACE COATING OPERATIONS Coating Technology engages in the Surface Coatings and Enhancements business. It is a leading regional Electroless Nickel Plater, a plating technique that deposits nickel on metal without the use of an applied electrical current. The process is used to prevent corrosion, enhance smoothness and improve overall surface quality on various metals including aluminum, copper and steel. It is now a leading regional anodizer. All surface finishing operations are conducted at its facility at 1600 N. Clinton Ave Rochester, NY. As of January 1, 1999, all surface finishing operations will be moved to a new facility at 800 St. Paul St. Rochester, NY. -4- COMPLIANCE WITH GOVERNMENTAL REGULATIONS The company believes that its present operations are in compliance with the current requirements of OSHA, EPA and all applicable local and state regulations, utilizing an up-to-date waste treatment system. COMPETITION Metal Arts will be competing initially in the computer memory disk and aluminum wheel markets where established, substantially larger companies dominate. There are approximately 20 companies that sell plating chemicals to these markets. Metal Arts will compete on the basis of an improved technology that will save its potential customers material, labor and waste treatment costs. Coating Technology competes with several regional plating firms including two that are larger and several of the same or smaller size. The company competes on the basis of superior service and, in certain instances, on the basis of proprietary technology or equipment. CUSTOMERS During the fiscal year ended June 30, 1998, Coating Technology had two customers which accounted for 24 percent of its sales, one of which accounted for 14 percent of its sales. INVENTORY REQUIREMENTS Coating Technology does not maintain an inventory other than its normal chemical plating and surface finishing solutions which are sourced as needed and are readily available. SOURCES OF RAW MATERIALS Metal Arts will be able to source all components for its proprietary electroless nickel process, readily, from multiple sources at competitive prices. The company can accommodate raw material requirements out of current working capital during the initial stages of commercialization. It will be necessary to enhance its working capital either out of cash flow or other external means if sales increase substantially. Coating Technology sources its raw materials on regular trade terms and has the working capital required to sustain current operations and continue to grow at its current rate. There are no rights of return, or extended payment terms for Coating Technology, nor are any anticipated for Metal Arts. Coating Technology sources all chemicals and related supplies from local and national companies at competitive prices. EMPLOYEES The company employs one executive in its Metal Arts operations and 25 in its Coating Technology operations, none of whom are union members. -5- ITEM 2. PROPERTIES Coating Technology leases approximately 22,000 square feet at an initial rental of $2.95 per square foot escalating to $4.95 by the end of the first five year term on September 1, 1996, which was extended on the same terms until December 31, 1998. This is a "gross" lease with responsibility for payment of utilities. The Company has signed a ten year lease for approximately 40,000 square feet of factory and office space in a superior building initially at $2.00 per square foot with responsibility for utilities. The plant includes surface finishing machinery and equipment which the company believes are adequate to satisfy the requirements of Metal Arts' and Coating Technology's present and proposed future businesses. ITEM 3. LEGAL PROCEEDINGS There are no legal proceedings at the present time. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS During the fiscal year ended June 30, 1998, no annual meeting was held and no shareholder votes took place. It is anticipated that the next annual meeting will take place in the next few months. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON SHARES AND RELATED STOCKHOLDER MATTERS The common shares of Metal Arts have been traded in the over-the-counter market since its initial public offering on January 22, 1981, and are now traded on the NASDAQ "Bulletin Board" under the symbol MTRT. The following table sets forth, for the calendar quarters indicated, the range of high and low bid quotations on the NASDAQ National Market System, as reported by the National Quotation Bureau, Inc.
FISCAL YEAR ENDED JUNE 30, 1997 HIGH LOW - ------------------------------- ---- --- First Quarter (July - September 1996) 9/16 5/16 Second Quarter (October - December 1996) 7/16 5/16 Third Quarter (January - March 1997) 5/16 3/16 Fourth Quarter (April - June 1997) 7/16 5/16 FISCAL YEAR ENDED JUNE 30, 1998 - ------------------------------- First Quarter (July - September 1997) 7/8 1/2 Second Quarter (October - December 1997) 9/16 1/4 Third Quarter (January - March 1998) 1/4 3/16 Fourth Quarter (April - June 1998) 1/4 3/16 FISCAL YEAR ENDED JUNE 30, 1999 - ------------------------------- First Quarter (July - September 1998) 1/4 3/16
-6- For a recent reported quotation for the company's common shares, see the cover page of this Form 10-K. The quotations listed above reflect inter-dealer prices, without retail markup, markdown, or commissions and may not necessarily represent actual transactions. To date, the company has not paid a dividend on its common shares. The payment of future dividends is subject to the company's earnings and financial position and such other factors, including contractual restrictions, as the Board of Directors may deem relevant and it is unlikely that dividends will be paid in the foreseeable future. As of October 1, 1998, there were approximately 980 holders of record of the common shares of Metal Arts, approximately 20 holders of record of warrants issued (and extended to December 31, 1998) as part of the 1988 Private Placement (23,000 have been exercised and 552,000 are left), and eleven holders of record of the June 30, 1994 Debentures, which are potentially convertible into a total of 366,663 common shares of the company. In June, 1995, the Board of Directors of The Metal Arts Company, Inc. (the "Company"), voted to distribute to the Company's shareholders, pro rata, the Company's holdings of the common shares of its then subsidiary, Bastian Company, Inc. ("Bastian"). As of June, 1995, the Company held approximately 356,000 of the then outstanding 400,000 common shares of Bastian, or approximately 89% of the then issued and outstanding common shares of Bastian. Bastian has advised the Company that Bastian believes it has an aggregate of approximately 260 holders of its common shares. The Company has approximately 980 holders of its own common shares. The Company's management believes that the value of the Bastian common shares then owned by the Company, both as of the date of the decision to distribute those shares, and as of the date of this Report, was negligible both in the aggregate and on a per share basis. Bastian has advised the Company that Bastian has not filed a registration statement with the Securities and Exchange Commission to register the Bastian common shares pursuant to The Securities Exchange Act of 1934, as amended (the "1934 Act"), and has not taken any other steps to comply with federal or state securities statutes. As such, since the Company believes that such registration under the 1934 Act, and other actions under federal and state securities statutes, may be required prior to the time that the Bastian common shares are distributed to the Company's shareholders, the Company has not completed the pro rata distribution of the Bastian common shares which was declared in June 1995. Management of the Company is unable to determine when, or if Bastian will register the Bastian common shares pursuant to the 1934 Act, but will further advise the Company's shareholders at the time that any further determination is made with regard to the distribution of the Bastian common shares. At this time, management of the Company believes that all of the Company's shareholders have a right to receive their pro rata distribution of the Bastian common shares, subject, however, to the completion of the necessary 1934 Act registration being filed and becoming effective and certain other securities requirements being fulfilled. -7- ITEM 6. SELECTED FINANCIAL DATA
June 30, June 30, June 30, June 30, June 30, 1998 1997 1996 1995 1994 ---- ---- ---- ---- ---- Results of operations: Net sales $ 1,871,896 $ 1,656,961 $ 1,629,538 $ 1,573,276 $ 1,258,500 Income (loss) before cumulative effect of accounting changes $ (156,988) $ (126,307) $ (147,294) $ (400,722) $ 131,318 Cumulative effect of accounting change $ -- $ -- $ -- $ -- $ 176,400 Net income (loss) $ (156,988) $ (126,307) $ (147,294) $ (400,722) $ 307,718 Per share: Income (loss) before cumulative effect of accounting change $ (.02) $ (.02) $ (.02) $ (.05) $ .02 Cumulative effect of accounting change $ -- $ -- $ -- $ -- $ .03 Net income (loss) $ (.02) $ (.02) $ (.02) $ (.05) $ .05 Weighted average number of common shares outstanding 7,464,116 7,357,402 7,307,402 7,294,002 6,766,352
Cash dividends paid per common share - No dividends have been paid in the past.
June 30, June 30, June 30, June 30, June 30, 1998 1997 1996 1995 1994 ---- ---- ---- ---- ---- Balance sheet data: Total assets $ 1,276,061 $ 1,064,636 $ 1,179,263 $ 1,202,988 $ 1,009,783 Total liabilities $ 1,405,749 $ 1,090,267 $ 1,128,587 $ 1,005,018 $ 966,673 Long-term obligations $ 433,706 $ 606,354 $ 660,168 $ 646,180 $ 588,341 Minority interest $ 135,901 $ 142,181 $ 129,898 $ 125,002 $ 99,406 Working capital $ (468,611) $ 5,627 $ 59,777 $ 172,843 $ 54,156 Stockholders' equity (deficiency) $ (129,688) $ (25,631) $ 50,676 $ 197,970 $ 43,110
-8- The following table illustrates the major components of consolidated net sales and net loss:
1998 1997 1996 ---- ---- ---- CONSOLIDATED NET SALES: Metal Arts $ 82,000 $ 44,000 $ -- Coating Technology 1,790,000 1,613,000 1,630,000 ----------- ----------- ----------- $ 1,872,000 $ 1,657,000 $ 1,630,000 =========== =========== =========== CONSOLIDATED NET LOSS: Metal Arts $ (143,000) $ (155,000) $ (158,000) Coating Technology (20,000) 41,000 16,000 Minority Interest 6,000 (12,000) (5,000) ----------- ----------- ----------- $ (157,000) $ (126,000) $ (147,000) =========== =========== ===========
-9- ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management Discussion and Analysis should be read in conjunction with this entire Form 10-K 1998 Annual Report. Except where specific reference is made in this Item 7 to the individual operations of Metal Arts or its 70 percent owned subsidiary, Coating Technology, references in this Item 7 to the "Company" are intended to be a reference to the joint operations of all of Metal Arts, and Coating Technology. LIQUIDITY AND CAPITAL RESOURCES PRIVATE PLACEMENT OF DEBENTURES The company sold, as of September 30, 1994, eleven debentures for a total of $275,000. The purpose of the private placement was to acquire the technology for plating electroless nickel on aluminum, complete all research and development, conduct test trials with potential customers leading up to commercialization. NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY FUNDING The company signed an agreement with the New York State Energy Research and Development Authority (NYSERDA) dated June 22, 1995 for funding of $325,000 for its new technology. This was done as a part of NYSERDA's Industrial Waste Minimization Program. The purpose of the funding is to provide money for the completion of research and development, test trials, commercial demonstrations and commercialization of the technology. To date, the company has received a total of $325,000 on this contract. On June 30, 1998, the company signed a new agreement with NYSERDA to demonstrate the use of Microsmooth(R) for hard anodizing in the amount of $55,000. On August 12, 1998, the company signed an additional agreement with NYSERDA to demonstrate the Microsmooth(R) process on aluminum automobile wheels. This contract also includes funding from the US Department of Energy with the Aluminum Company of America (ALCOA) as a strategic partner in the effort. The funding from NYSERDA and US DOE totals $640,000. In addition, ALCOA has pledged $100,000 of in-kind material, services and cash. OPERATING ACTIVITIES Over the past three fiscal years Coating Technology has shown steady growth in sales and operating earnings. Cash flow, along with capital leases, was adequate to provide for the acquisition of capital equipment and provide the working capital necessary to run the business. In addition, all relevant measures relating to: Debt to Equity; current ratio; working capital; and net worth increased. Through the first quarter of fiscal year 1999, Coating Technology operated profitably with sufficient resources to sustain operations. -10- MICROSMOOTH(R) The Company initially applied for a patent on Microsmooth(R), its proprietary activator for plating electroless nickel on aluminum in March, 1994. That application was then split into three separate applications; the chemical formula; the process and; the resulting product. Subsequently, and as a result of significant chemical formula modifications, the original formula application was abandoned and a new patent application was filed in June, 1998. On May 19, 1998, the United Stated Patent office issued patent number 5,753,304 covering the Microsmooth(R) formula and the Microsmooth(R) process. A trademark was issued on the name, Microsmooth(R), on June 30, 1998. On July 30, 1997 the Company entered into an exclusive license agreement with Alyn Corporation, Inc. for Alyn to use the Microsmooth(R) process on Alyn's Boralyn 7 alternate computer memory disks. The Company will receive material royalties from the Alyn Corporation to retain Alyn's exclusive worldwide rights to the Microsmooth(R) technology on alternate computer memory disks. If Metal Arts is successful in commercializing its new technology it will be necessary to raise additional capital. The amount of capital required will depend on how rapidly market acceptance might occur. If this does occur it could result in growth in the company's sales and earnings over the next few years. The company will seek, if commercial sales commence, to raise additional capital in the form of receivables financing, warrant conversion or other investment mechanisms to sustain operations. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA -11- INDEX TO FINANCIAL STATEMENTS AND SCHEDULES Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . 1 Consolidated Balance Sheets at June 30, 1998 and 1997 . . . . . . . . . . 2 - 3 Consolidated Statements of Operations for the years ended June 30, 1998, 1997 and 1996 . . . . . . . . . . . . . . . . . . . .4 Consolidated Statements of Changes In Stockholders' Equity (Deficiency) for the years ended June 30, 1998, 1997 and 1996 . . . . . . . . . . . . . . . . . . 5 - 6 Consolidated Statements of Cash Flows for the years ended June 30, 1998, 1997 and 1996 . . . . . . . . . . . . . . . . . 7 - 8 Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . .9 - 19 Financial Schedules II - Amounts Receivable from Related Parties and Underwriters, Promoters, and Employees Other Than Related Parties . . . . . . . . . . . . . . . . . . . 20 V - Property, Plant and Equipment . . . . . . . . . . . . . . . . . . .21 VI - Accumulated Depreciation and Amortization of Property, Plant and Equipment . . . . . . . . . . . . . . . . . 22 VII - Valuation and Qualifying Accounts and Reserves . . . . . . . . . . 23 X - Supplementary Income Statement Information . . . . . . . . . . . . 24 All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or the notes thereto. -12- DAVIE KAPLAN CHAPMAN BRAVERMAN CERTIFIED PUBLIC ACCOUNTANTS BUSINESS AND FINANCIAL CONSULTANTS 28 Main St. E, Suite 1000 Rochester, New York 14614 Tel: 716-454-4161 Fax: 716-454-2573 INDEPENDENT AUDITORS' REPORT ---------------------------- The Board of Directors and Stockholders The Metal Arts Company, Inc. and Subsidiary We have audited the accompanying consolidated balance sheets of The Metal Arts Company, Inc. and Subsidiary as of June 30, 1998 and 1997, and the related consolidated financial statements listed in the accompanying index for each of the years in the three-year period ended June 30, 1998. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As described in Notes 1 and 2 to the financial statements, the Company has elected not to consolidate its Bastian and Ocean State subsidiaries as required by generally accepted accounting principles. In our opinion, except for the effects of not consolidating its Bastian and Ocean State subsidiaries as discussed in the preceding paragraph, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Metal Arts Company, Inc. and Subsidiary as of June 30, 1998 and 1997, and the results of their operations, changes in their stockholders' equity (deficiency) and their cash flows for each of the years in the three-year period ended June 30, 1998, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The financial schedules listed in the accompanying index are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ DAVIE KAPLAN CHAPMAN BRAVERMAN, P.C. ---------------------------------------- October 9, 1998 -13- A Professional Corporation Member - BKR International THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- Consolidated Balance Sheets June 30, 1998 And 1997
ASSETS ------ Current assets: 1998 1997 ---------- ---------- Cash $ 35,374 $ 53,241 Accounts receivable, trade - less allowance for uncollectible accounts of $10,000 in 1998 and 1997 (Notes 5 and 10) 262,683 223,791 Due from NYSERDA, current portion (Note 3) -- 32,501 Due from unconsolidated subsidiary, less allowance for uncollectible amount of $100,000 in 1998 and 1997 (Note 15) -- 2,862 Stock subscription receivable 7,500 -- Prepaid expenses and other current assets 26,974 8,364 Deferred tax asset - less valuation allowance of $22,800 in 1998 and $37,100 in 1997 (Notes 2 and 11) 35,000 26,600 ---------- ---------- 367,531 347,359 ---------- ---------- Property, plant and equipment (Notes 2, 4 and 5) 1,251,623 929,629 Less: Accumulated depreciation and amortization 576,918 469,469 ---------- ---------- 674,705 460,160 ---------- ---------- Other assets: Due from shareholder (Note 15) 19,734 13,009 Cash value of life insurance 7,893 7,893 Operating rights, net of accumulated amortization of $4,690 in 1998 and $3,350 in 1997 (Notes 2 and 8) 15,410 16,750 Debt issuance costs, net of accumulated amortization of $21,243 in 1998 and $15,931 in 1997 (Note 2) 5,311 10,622 Other assets 37,677 30,543 Deferred tax asset - less valuation allowance of $130,300 in 1998 and $309,200 in 1997 (Notes 2 and 11) 147,800 178,300 ---------- ---------- 233,825 257,117 ---------- ---------- $1,276,061 $1,064,636 ========== ==========
The accompanying Notes to Financial Statements are an integral part of these statements. -14-
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current liabilities: 1998 1997 ----------- ----------- Current portion of long-term debt (Note 5) $ 402,012 $ 56,613 Accounts payable, trade 329,114 220,809 Accrued expenses 10,049 8,207 Accrued payroll and related taxes 47,377 21,702 Accrued commissions 34,590 34,401 Due to shareholder (Note 15) 13,000 -- ----------- ----------- 836,142 341,732 ----------- ----------- Long-term liabilities: Long-term debt, net of current portion (Note 5) 183,784 348,332 Other long-term liability (Note 6) 243,222 243,222 Deferred tax liability (Notes 2 and 11) 6,700 14,800 ----------- ----------- 433,706 606,354 ----------- ----------- Minority interest in subsidiary (Note 9) 135,901 142,181 ----------- ----------- Commitments and contingencies (Notes 12 and 13) Stockholders' equity (deficiency) (Notes 3, 5, 7 and 8): Commonstock - $.01 par value, 15,000,000 shares authorized; 7,520,802 and 7,407,402 shares issued and outstanding in 1998 and 1997, respectively 75,208 74,074 Paid-in capital in excess of par value 2,458,984 2,407,188 Accumulated deficit (2,663,880) (2,506,893) ----------- ----------- (129,688) (25,631) ----------- ----------- $ 1,276,061 $ 1,064,636 =========== ===========
-15- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY Consolidated Statements Of Operations For The Years Ended June 30, 1998, 1997 And 1996
1998 1997 1996 ---- ---- ---- Net sales (Note 10) $ 1,871,897 $ 1,656,961 $ 1,629,538 Cost of goods sold 1,504,840 1,322,482 1,377,353 ----------- ----------- ----------- Gross profit 367,057 334,479 252,185 ----------- ----------- ----------- Selling, general and administrative expenses 465,258 389,006 334,440 Research and development 3,572 25,063 28,209 ----------- ----------- ----------- 468,830 414,069 362,649 ----------- ----------- ----------- Loss from operations (101,773) (79,590) (110,464) ----------- ----------- ----------- Other income (expense): Allowance for uncollectible accounts -- -- (6,000) Interest expense (47,589) (36,947) (38,547) Interest income 745 1,046 2,813 Minority interest in income of subsidiary (Note 9) 6,280 (12,283) (4,896) ----------- ----------- ----------- (40,564) (48,184) (46,630) ----------- ----------- ----------- Loss before income taxes (142,337) (127,774) (157,094) Provision for income taxes (Notes 2 and 11) 14,650 (1,467) (9,800) ----------- ----------- ----------- Net loss for the year $ (156,987) $ (126,307) $ (147,294) =========== =========== =========== Earnings per share of common stock (Note 2) $ (.02) $ (.02) $ (.02) =========== =========== ===========
The accompanying Notes to Financial Statements are an integral part of these statements. -16- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- Consolidated Statements Of Changes In Stockholders' Equity (Deficiency) For The Years Ended June 30, 1998, 1997 And 1996
COMMON STOCK ------------ NUMBER OF SHARES AMOUNT ------ ------ Balance at June 30, 1995 7,307,402 $73,074 Net loss for the year -- -- --------- ------- Balance at June 30, 1996 7,307,402 73,074 Issuance of common stock 100,000 1,000 Net loss for the year -- -- --------- ------- Balance at June 30, 1997 7,407,402 74,074 Issuance of common stock 113,400 1,134 Net loss for the year -- -- --------- ------- Balance at June 30, 1998 7,520,802 $75,208 ========= =======
The accompanying Notes to Financial Statements are an integral part of these statements. -17- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- Consolidated Statements Of Changes In Stockholders' Equity (Deficiency) For The Years Ended June 30, 1998, 1997 And 1996
PAID-IN TOTAL CAPITAL IN STOCKHOLDERS' EXCESS OF ACCUMULATED EQUITY PAR VALUE DEFICIT (DEFICIENCY) --------- ------- ------------ Balance at June 30, 1995 $2,358,188 $(2,233,292) $ 197,970 Net loss for the year - (147,294) (147,294) ---------------- ------------ --------- Balance at June 30, 1996 2,358,188 (2,380,586) 50,676 Issuance of common stock 49,000 - 50,000 Net loss for the year - (126,307) (126,307) ---------------- ------------ --------- Balance at June 30, 1997 2,407,188 (2,506,893) (25,631) Issuance of common stock 51,796 - 52,930 Net loss for the year - (156,987) (156,987) ---------------- ------------- --------- Balance at June 30, 1998 $2,458,984 $(2,663,880) $(129,688) ========== =========== =========
-18- THE METAL ARTS COMPANY, INC AND SUBSIDIARY ------------------------------------------ Consolidated Statements Of Cash Flows For The Years Ended June 30, 1998, 1997 And 1996
1998 1997 1996 ---- ---- ---- Cash flows from operating activities: Net loss for the year $(156,987) $(126,307) $(147,294) Adjustments to reconcile net loss to net cash provided by (used for) operating activities: Rent expense offset against advances to unconsolidated subsidiary 3,000 6,000 6,000 Bad debt expense -- -- 6,000 Depreciation and amortization 114,100 100,230 94,508 Deferred income taxes 14,000 (8,900) (11,400) Minority interest in income of subsidiary (6,280) 12,283 4,896 Change in operating accounts: Accounts receivable (6,391) (1,625) 59,597 Prepaid expenses (8,440) 21,155 (19,826) Other assets (7,134) (64) (12,524) Accounts payable 143,565 56,596 72,854 Accrued expenses 1,842 (1,205) (116) Accrued payroll and related taxes 25,675 1,977 (7,992) Accrued commissions 189 (91) (478) --------- --------- --------- Net cash provided by operating activities 117,139 60,049 44,225 --------- --------- --------- Cash flows from investing activities: Repayments from (advances to) unconsolidated subsidiary (138) 138 (15,000) Capital expenditures (123,863) (45,472) (56,007) Advances to shareholder (6,725) (13,009) -- --------- --------- --------- Net cash used for investing activities (130,726) (58,343) (71,007) --------- --------- --------- Cash flows from financing activities: Issuance of common stock -- 6,000 -- Advances from shareholder 13,000 -- -- Proceeds from long-term debt 50,000 -- 100,000 Payments on long-term debt (67,280) (66,680) (39,595) --------- --------- --------- Net cash provided by (used for) financing activities (4,280) (60,680) 60,405 --------- --------- ---------
The accompanying Notes to Financial Statements are an integral part of these statements. -19-
1998 1997 1996 ---- ---- ---- Net increase (decrease) in cash $ (17,867) $ (58,974) $ 33,623 Cash at beginning of year 53,241 112,215 78,592 --------- --------- -------- Cash at end of year $ 35,374 $ 53,241 $112,215 ========= ========= ======== Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 45,739 $ 38,076 $ 37,458 ========= ========= ======== Cash paid during the year for income taxes $ 6,809 $ 1,849 $ 29,209 ========= ========= ======== Supplemental disclosure of non-cash investing and financing activities: Issuance of common stock $ 52,930 $ 50,000 $ -- Payment of liabilities (35,260) (44,000) -- Payment of prepaid expenses (10,170) -- -- Stock subscription receivable (7,500) -- -- --------- --------- -------- Cash received from issuance of common stock $ -- $ 6,000 $ -- ========= ========= ======== Acquisition of property and equipment by issuance of long-term debt $ 198,131 $ -- $ -- ========= ========= ========
-20- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996 1. BUSINESS DESCRIPTION -------------------- The Company and its 70% owned subsidiary, Coating Technology, Inc., are primarily engaged in the surface coatings and enhancements business. Customers, substantially all of whom are manufacturers, are located primarily in Western, New York. Prior to June 30, 1995, the Company owned 89% of The Bastian Company, Inc. (Bastian) and 100% of Ocean State Enameling, Inc. (Ocean State). On June 7, 1995, the Company's Board of Directors approved the sale of the Company's interest in Ocean State at its original investment amount of $500 to Bastian. In addition, the spin-off of Bastian in the form of a stock dividend to the Company's stockholders of record as of June 30, 1995 was approved. As of October 9, 1998, Bastian has not filed a registration statement with the Securities and Exchange Commission to register the Bastian common shares pursuant to the Securities Exchange Act of 1934. Therefore, the Company has not completed the pro rata distribution of the Bastian common shares and, as such, Bastian and Ocean State are still technically subsidiaries of the Company. (See Note 2) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - -- ------------------------------------------ a) PRINCIPLES OF CONSOLIDATION --------------------------- The consolidated financial statements include the accounts of the Company and its 70% owned subsidiary, Coating Technology, Inc. All material intercompany items have been eliminated in consolidation. The consolidated financial statements do not include the accounts of its 89% owned subsidiary, The Bastian Company, Inc. and its 100% owned subsidiary, Ocean State Enameling, Inc., as required by generally accepted accounting principles. The Company believes that not consolidating these subsidiaries provides for a more meaningful presentation of continuing operations. (See Note 1) b) USE OF ESTIMATES ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. c) REVENUE RECOGNITION ------------------- The Company records its revenues and expenses on the accrual basis of accounting. Revenues are recognized on the date goods are shipped. -21- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ------------------------------------------------------ d) PROPERTY, PLANT AND EQUIPMENT ----------------------------- Property, plant and equipment are carried at cost. Depreciation is computed on the straight-line method over a period of 5 to 39 years. Accelerated methods are used for tax purposes by Coating Technology, Inc. e) OPERATING RIGHTS ---------------- During 1995, the Company acquired the rights to a new technology, which is a new process for plating electroless nickel on aluminum. These operating rights are being amortized using the straight-line method over 15 years. f) DEBT ISSUANCE COSTS ------------------- Debt issuance costs are being amortized using the straight-line method over the term of the related debt instrument, five years. g) INCOME TAXES ------------ Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the bases of certain assets and liabilities for financial and tax reporting. The deferred taxes represent the future tax return consequences of those differences, which will either be taxable when the assets and liabilities are recovered or settled. h) EARNINGS PER SHARE ------------------ Earnings per common share were computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Options to purchase common stock have a negligible effect on earnings per share. 3. DUE FROM NYSERDA ---------------- On June 22, 1995, the Company entered into an agreement with the New York State Energy Research and Development Authority (NYSERDA). Under the terms of the agreement, NYSERDA shared in the cost to develop a new technology by paying $325,010, which represented 59.8% of the actual development costs. NYSERDA paid the Company 90% of its 59.8% share upon receipt of an invoice for a progress payment. Final payment was made after completion of work and receipt of the final report. The Company has recorded $325,010 of reimbursements from NYSERDA through June 30, 1997. -22- 11 THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996 3. DUE FROM NYSERDA (continued) ---------------------------- In accordance with the agreement, the Company is obligated to pay to NYSERDA 2% of sales of the new technology manufactured in New York State and 4% of sales manufactured outside of New York State. The Company's obligation to make payments to NYSERDA shall commence upon the earlier of the two following events; 1) sales exceed $500,000; 2) two years after the Company's receipt of final payment under the contract. NYSERDA possesses certain rights to contract data and certain liquidation or dissolution preferences pursuant to the contract. 4. PROPERTY, PLANT AND EQUIPMENT -----------------------------
Property, plant and equipment consists of the following: 1998 1997 ---- ---- Leasehold improvements $ 36,061 $ 28,784 Machinery and equipment 1,139,632 827,891 Furniture and fixtures 75,930 72,954 ---------- -------- $1,251,623 $929,629 ========== ========
Depreciation and amortization expense for each of the three years in the period ended June 30, 1998 was $107,449, $93,579 and $87,858, respectively. 5. LONG-TERM DEBT --------------
Long-term debt consists of the following: 1998 1997 ---- ---- 8% convertible subordinated debentures due and payable on June 30, 1999. The debentures are subordinated to the Company's senior indebtedness. See Note 8 for conversion provisions. $275,000 $275,000 Note payable secured by specific equipment. Interest accrues at 5%. Principal, in the amount of $26,667, plus interest is payable each December through 1998. 26,666 53,333 Installment note payable in monthly payments of $1,667, plus interest at prime plus 1.5%, through October 2000. The note is secured by a general lien on equipment, accounts receivable and inventory and is guaranteed by the stockholders of Coating Technology, Inc. 46,667 66,666
-23- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996
5. LONG-TERM DEBT (continued) 1998 1997 -------------- ----- ---- Installment note payable in monthly payments of $1,667, plus interest at prime plus 2%, through December 1997. The note was secured by a general lien on equipment and accounts receivable and was guaranteed by the stockholders of Coating Technology, Inc. - 9,946 Unsecured note payable. Interest accrues at 8% and is payable monthly. Principal is due in full on April 30, 1999. 50,000 - Capital lease payable. Due in 60 monthly payments of $1,738, including interest at 14.5%, through January 2003. The lease is secured by specific equipment and is personally guaranteed by the minority shareholder of Coating Technology. 69,567 - Capital lease payable. Due in 60 monthly payments of $1,405, including interest at 14.5%, through January 2003. The lease is secured by specific equipment and is personally guaranteed by the minority shareholder of Coating Technology. 56,233 - Capital lease payable. Due in 60 monthly payments of $1,478, including interest at 16.9%, through February 2003. The lease is secured by specific equipment and is personally guaranteed by the minority shareholder of Coating Technology. 57,013 - Capital lease payable. Due in 60 monthly payments of $118, including interest at 17.7%, through February 2003. The lease is secured by specific equipment and is personally guaranteed by the minority shareholder of Coating Technology. 4,650 - -------- ---------- 585,796 404,945 Less: Current portion 402,012 56,613 -------- ---------- Long-term debt, net of current portion $183,784 $348,332 ======== ==========
The aggregate maturities for all long-term borrowings as of June 30, 1998 are as follows: 1999 $402,012 2000 55,296 2001 47,729 2002 47,779 2003 32,980 -------- $585,796 ========
-24- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996 6. OTHER LONG-TERM LIABILITY ------------------------- The Company entered into a partnership (Sunshine Bullion Co.) on September 1, 1981. The Company incurred a liability to certain vendors relating to silver price fluctuations during the period of time that Sunshine Bullion Co. was operating. The Company has denied responsibility for these amounts. The vendors obtained a judgement against the Company in 1983, but no collection effort has been made since that time. 7. INCENTIVE STOCK OPTION PLAN --------------------------- The Company has an incentive stock option plan for key employees, reserving 850,000 shares of common stock for issuance upon the exercise of options granted under the plan. The options expire 10 years from date of grant (5 years for grantees who hold 10% or more of the Company voting power) and are exercisable one year from the date of the grant on a cumulative basis at the rate of 25% of the total number of shares covered by the grant. As of June 30, 1998, options on 435,000 shares have been exercised at $.06 per share, leaving options on 415,000 shares available under the plan. 8. COMMON STOCK AND STOCK WARRANTS ------------------------------- In December 1988, the Company sold 575,000 $.01 par value common shares and warrants to purchase 575,000 additional common shares. The selling price was $.50 per newly issued share. The warrants were exercisable for two years at $.60 per common share. The sale of common stock and warrants was made by means of a private placement. The 575,000 newly issued shares constituted the minimum offering under terms of the private placement. 552,000 warrants were outstanding as of June 30, 1998. The Company has extended the exercise period for these warrants to December 31, 1998. During the year ended June 30, 1995, the Company issued convertible subordinated debentures. These debentures are redeemable by the Company upon at least 30 days notice at any time after December 30, 1995, and are convertible into common shares of the Company. The holders of the debentures may convert the debentures into common shares of the Company at any time prior to 5:00 pm on June 30, 1999. The conversion price is $.75 per share through June 30, 1996, $.95 per share from July 1, 1996 through June 30, 1998, and $1.25 per share thereafter. Accompanying each $25,000 debenture is a non-detachable warrant. Each non-detachable warrant enables the holder to purchase up to an additional 33,333 shares at an exercise price of $.85 per share. The warrants can only be exercised coincidentally with the conversion of the debenture. The Company also has an outstanding warrant to purchase 60,000 common shares at $.06 per share. The warrant was issued in connection with the purchase of equipment in 1994 and expires December 31, 1998. -25- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996 8. COMMON STOCK AND STOCK WARRANTS (continued) ------------------------------- During the year ended June 30, 1995, the Company acquired the operating rights to a new chemical process. As part of the purchase price, the Company was obligated to issue 100,000 common shares upon the transfer of clear title to certain patent pending rights and receipt of $.06 per share. An additional 100,000 common shares must be issued when the patent is accepted. Also, 300,000 common shares must be issued based upon the Company attaining certain sales levels of the new chemical process. All common shares issued under this agreement require payment of $.06 per share. 9. MINORITY INTEREST ----------------- Coating Technology, Inc. is in the business of electroless nickel and aluminum anodizing operations. The accounts of Coating Technology, Inc. for the years ended June 30, 1998 and 1997 are included in the consolidated financial statements of the Company with recognition of a minority interest representing the 30% interest owned by another party. Summarized balance sheet data of Coating Technology, Inc. as of June 30, 1998 and 1997 is as follows:
1998 1997 ---- ---- Current assets $ 283,000 $276,000 Property and equipment, net 668,000 451,000 Other assets 69,000 54,000 ----------- --------- $1,020,000 $781,000 ========== ======== Current liabilities $ 379,000 $223,000 Long-term liabilities 191,000 88,000 ----------- --------- 570,000 311,000 Shareholders' equity 450,000 470,000 ----------- -------- $1,020,000 $781,000 ========== ========
Summarized income statement data of Coating Technology, Inc. for the years ended June 30, 1998, 1997 and 1996 is as follows:
1998 1997 1996 ---- ---- ---- Revenues $1,790,000 $1,613,000 $1,630,000 Costs and expenses 1,810,000 1,572,000 1,614,000 ---------- ---------- ---------- Net income (loss) $ (20,000) $ 41,000 $ 16,000 =========== =========== ===========
-26- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996 9. MINORITY INTEREST (continued) ----------------------------- Depreciation expense for Coating Technology, Inc. for the years ended June 30, 1998, 1997 and 1996 amounted to $105,820, $91,303 and $86,081, respectively. Capital expenditures for Coating Technology, Inc. for the years ended June 30, 1998, 1997 and 1996 amounted to $321,994, $45,472 and $48,922, respectively. 10. SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK ------------------------------------------------------ During the year ended June 30, 1998, Coating Technology, Inc. had two customers who accounted for 24% of consolidated sales. During the year ended June 30, 1997, Coating Technology, Inc. had two customers who, in the aggregate, accounted for 26% of consolidated sales. During the year ended June 30, 1996, Coating Technology, Inc. had two customers who, in the aggregate, accounted for 21% of consolidated sales. The Company grants credit to its customers, substantially all of whom are manufacturers located in Western New York. Two Coating Technology, Inc. customers comprised 22% and 21% of accounts receivable at June 30, 1998 and 1997, respectively. One Metal Arts customer comprised 11% of accounts receivable at June 30, 1998. 11. INCOME TAXES ------------ Provision for income taxes was determined as follows:
1998 1997 1996 ---- ---- ---- Loss before income taxes $(142,337) $(127,774) $(157,094) Excess tax depreciation 2,190 (1,565) (26,926) State income tax (650) (2,833) (1,600) Minority interest in income of subsidiary (6,280) 12,283 4,896 Net operating loss of Metal Arts 109,107 124,588 152,267 Allowance for doubtful accounts - - 6,000 Other 39,975 53,337 22,480 ---------- ---------- ------------ Federal taxable income $ 2,005 $ 58,036 $ 23 ========== ========== ============
-27- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996 11. INCOME TAXES (continued) ------------
1998 1997 1996 ---- ---- ---- Federal statutory income tax $ 301 $ 9,509 $ 3 Federal alternative minimum tax credit (301) (4,901) (3) State income tax 650 2,833 1,600 Other - (8) - Deferred 14,000 (8,900) (11,400) ------- ------- -------- Provision for income taxes $14,650 $(1,467) $ (9,800) ======= ======= =========
Financial Accounting Standards Board Statement of Financial Accounting Standards No. 109 (FASB 109), "Accounting for Income Taxes" requires that an asset be recorded for the expected realizable value of net operating loss carryforwards and tax credits and a corresponding valuation allowance for the amount of tax benefits not expected to be realized. The Company has recorded a deferred tax asset of $182,800 reflecting the benefit of net operating loss carryforwards and investment tax credit carryforwards. Realization is dependent on generating sufficient taxable income prior to expiration of the net operating loss and investment tax credit carryforwards. Although realization is not assured, management believes it is more likely than not that all of the deferred tax asset will be realized. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. At June 30, 1998, the Company had available net operating loss deduction carryforwards for Federal income tax purposes which expire as follows: 2001 $ 8,000 2003 160,000 2009 8,000 2010 206,000 2011 152,000 2012 124,000 2013 108,000 -------- $766,000 ======== Coating Technology, Inc. has approximately $88,500 of New York State investment tax credit carryforwards that expire in various years from 2004 to 2013 and Federal and New York State alternative minimum tax credit carryforwards of approximately $5,300. -28- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996 11. INCOME TAXES (continued) ------------
Deferred income taxes consist of: 1998 1997 ---- ---- Assets NOL carryforward $ 291,500 $ 514,700 Federal tax credit carryforwards 1,000 1,800 NYS tax credit carryforwards 92,800 76,500 Allowance for doubtful accounts 2,200 2,200 Less: Valuation allowance (153,100) (346,300) --------- --------- Net deferred tax assets 234,400 248,900 Liabilities Accelerated depreciation (58,300) (58,800) ---------- ---------- $ 176,100 $ 190,100 ========= =========
Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The net deferred tax asset is presented on the balance sheet as follows:
1998 1997 ---- ---- Net current deferred tax asset - Metal Arts $ 35,000 $ 26,600 Net long-term deferred tax asset - Metal Arts 147,800 178,300 Net long-term deferred tax liability - Coating Technology (6,700) (14,800) ---------- --------- $176,100 $190,100 ======== ========
12. COMMITMENTS ----------- Coating Technology, Inc. had a lease agreement through January 31, 1998. This lease has been extended, on a month-to-month basis, until the Company completes the transition to its new facility. In addition to monthly rental payments of $8,709, Coating Technology, Inc. is also responsible for its own utilities and general maintenance. During 1997, Coating Technology entered into a ten year lease agreement for its new manufacturing and office space. The lease requires 28 monthly rental payments of $5,958, beginning September 1, 1997. The annual rent as of January 1, 2000, and each January 1st thereafter, shall be increased by the percentage increase in the consumer price index for the previous calendar year, but in no event, more than three percent in any year. In addition, the Company is also responsible for its own utilities. -29- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996 12. COMMITMENTS (continued) ----------- Effective July 1, 1995, the Company rents office space from its unconsolidated subsidiary on a month-to-month basis for $500 per month. Consolidated rent expense for each of the years ended June 30, 1998, 1997 and 1996 was approximately $166,000, $111,000 and $109,000, respectively. During the year ended June 30, 1995, the Company entered into a royalty agreement in conjunction with the purchase of the operating rights to a new chemical process. The agreement requires royalty payments of 2% of gross sales of the new chemical process throughout the former owner's lifetime. As of June 30, 1998, no royalties were due under this agreement. In addition, the Company entered into a licensing agreement for an existing chemical process. The agreement requires licensing fees equal to 50% of the Company's net profit on sales of this process. As of June 30, 1998, no fees were due under this agreement. 13. CONTINGENCIES ------------- The Company is the guarantor of debt owed to the City of Geneva, N.Y. by its unconsolidated subsidiary, Bastian, in the approximate amount of $280,000. Bastian is currently in default on its debt payments to the City of Geneva. Bastian has incurred substantial losses in recent years and has a deficiency of stockholders' equity. Although Bastian has taken steps to return to profitability, it is at least reasonably possible that Bastian will not become profitable in the near future. If not, the Company may become responsible for repayment of at least a portion of the amount owed to the City of Geneva. As of June 30, 1998, the Company has not recorded a liability relating to this contingency in its financial statements. 14. BENEFIT PLAN ------------ During 1996, Coating Technology, Inc. started a salary reduction plan pursuant 401(k) of the Internal Revenue Code that covers all eligible employees. Employees are eligible for participation in the plan after the completion of six months of service and attainment of age twenty-one. Under terms of the plan, the Company contributes up to 1.25% of each participant's compensation. Also, Coating may make additional contributions to the plan at its discretion. Coating's contributions to the plan amounted to $3,328 in 1998 and $3,135 in 1997. -30- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- Notes To Consolidated Financial Statements June 30, 1998, 1997 And 1996 15. TRANSACTIONS WITH RELATED PARTIES --------------------------------- As of June 30, 1998, the Company was owed $100,000 from Bastian for advances. The Company has a second security interest in virtually all of the assets in Bastian. Due to the financial condition of Bastian, the Company reserved $100,000 for possible uncollectibility. Amounts due to/from shareholder do not bear interest, are unsecured and have no fixed repayment terms. 16. CAPITAL LEASES -------------- Assets held under capital leases as of June 30, 1998 are as follows: Machinery and equipment $198,131 Less: Accumulated depreciation 8,255 -------- $189,876 ======== Minimum lease payments for all capital leases as of June 30, 1998 are as follows: 1999 $ 56,879 2000 56,879 2001 56,879 2002 56,879 2003 34,776 --------- Total minimum lease payments 262,292 Less: Amount representing interest and sales tax 74,829 --------- Present value of net minimum lease payments $187,463 ========= -31- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES For The Years Ended June 30, 1998, 1997 And 1996
BALANCE AT BALANCE BEGINNING AMOUNTS AMOUNTS AT END NAME OF DEBTOR OF YEAR ADDITIONS COLLECTED WRITTEN OFF OF YEAR - -------------- ------- --------- --------- ----------- ------- June 30, 1998 N/A $ - $ - $ - $ - $ - ======= ======= ======= ======= ======= June 30, 1997 N/A $ - $ - $ - $ - $ - ======= ======= ======= ======= ======= June 30, 1996 N/A $ - $ - $ - $ - $ - ======= ======= ======= ======= =======
-32- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT For The Years Ended June 30, 1998, 1997 And 1996
BALANCE AT BALANCE BEGINNING ADDITIONS AT END CLASSIFICATION OF YEAR AT COST RETIREMENTS OF YEAR - -------------- ------- ------- ----------- ------- June 30, 1998 Leasehold improvements $ 28,784 $ 7,277 $ -- $ 36,061 Machinery and equipment 827,891 311,741 -- 1,139,632 Furniture and fixtures 72,954 2,976 -- 75,930 -------- -------- ---------- ---------- $929,629 $321,994 $ -- $1,251,623 ======== ======== ========== ========== June 30, 1997 Leasehold improvements $ 28,784 $ -- $ -- $ 28,784 Machinery and equipment 794,998 32,893 -- 827,891 Furniture and fixtures 60,375 12,579 -- 72,954 -------- -------- ---------- ---------- $884,157 $ 45,472 $ -- $ 929,629 ======== ======== ========== ========== June 30, 1996 Leasehold improvements $ 26,052 $ 2,732 $ -- $ 28,784 Machinery and equipment 759,582 35,416 -- 794,998 Furniture and fixtures 42,516 17,859 -- 60,375 -------- -------- ---------- ---------- $828,150 $ 56,007 $ -- $ 884,157 ======== ======== ========== ==========
-33- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT For The Years Ended June 30, 1998, 1997 And 1996
ADDITIONS BALANCE AT CHARGED TO BALANCE BEGINNING COSTS AND AT END CLASSIFICATION OF YEAR EXPENSES RETIREMENTS OF YEAR - -------------- ------- -------- ----------- ------- June 30, 1998 Leasehold improvements $ 14,331 $ 3,286 $ -- $ 17,617 Machinery and equipment 416,231 98,837 -- 510,068 Furniture and fixtures 38,907 10,326 -- 49,233 -------- -------- -------- -------- $469,469 $107,449 $ -- $576,918 ======== ======== ======== ======== June 30, 1997 Leasehold improvements $ 11,348 $ 2,983 $ -- $ 14,331 Machinery and equipment 336,107 80,124 -- 416,231 Furniture and fixtures 28,435 10,472 -- 38,907 -------- -------- -------- -------- $375,890 $ 93,579 $ -- $469,469 ======== ======== ======== ======== June 30, 1996 Leasehold improvements $ 8,606 $ 2,742 $ -- $ 11,348 Machinery and equipment 259,542 76,565 -- 336,107 Furniture and fixtures 19,884 8,551 -- 28,435 -------- -------- -------- -------- $288,032 $ 87,858 $ -- $375,890 ======== ======== ======== ========
-34- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES For The Years Ended June 30, 1998, 1997 And 1996
ADDITIONS BALANCE AT CHARGED TO BALANCE BEGINNING COSTS AND AT END DESCRIPTION OF YEAR EXPENSES DEDUCTIONS OF YEAR - ----------- ------- -------- ---------- ------- Allowance for doubtful accounts - deducted from accounts and notes receivable in the balance sheet June 30, 1998 $110,000 $ - $ - $110,000 ======== ============ ========= ======== June 30, 1997 $110,000 $ - $ - $110,000 ======== ============ ========= ======== June 30, 1996 $104,000 $ 6,000 $ - $110,000 ======== ============ ========= ========
-35- THE METAL ARTS COMPANY, INC. AND SUBSIDIARY ------------------------------------------- SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION For The Years Ended June 30, 1998, 1997 And 1996
ITEM CHARGED TO COSTS AND EXPENSES ---------------------------------- 1998 1997 1996 ---- ---- ---- Maintenance and repairs $86,719 $71,181 $66,478 ======= ======= ======= Depreciation and amortization of intangible assets, pre- operating costs and similar deferrals $ * $ * $ * === === === Taxes, other than payroll and income taxes $ * $ * $ * === === === Royalties $ * $ * $ * === === === Advertising costs $ * $ * $ * === === === * Less than 1% of total sales
-36- ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE During the two most recent fiscal years, there have been no changes in, or disagreements with, accountants on accounting and financial disclosures. PART II ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The directors and executive officers of Metal Arts are listed below, followed by a brief description of their business experience for at least the last five years. These persons also hold officer and director positions with Coating Technology. NAME AGE POSITIONS WITH METAL ARTS - ---- --- ------------------------- Stanley J. Dahle 61 President, Chief Executive Officer and Director Albert A. Cauwels 64 Secretary and Director Geoffrey A. Rich 49 Director STANLEY J. DAHLE has been President of Metal Arts since October, 1981 and Chairman since 1990. He was Executive Vice President of Metal Arts since its inception in June, 1976, until October, 1981. Mr. Dahle has also served in various other offices for Metal Arts since its inception. He is a director of Coating Technology. ALBERT A. CAUWELS became a director of Metal Arts in June, 1984 and serves as Secretary. He is a director of Coating Technology, Inc. GEOFFREY A. RICH has been President of Coating Technology since its inception in 1989 and Chief Executive Officer since 1995. He has been a director of Metal Arts since December, 1990. None of Metal Arts' Directors is a Director of any company with a class of securities registered pursuant to Section 12 of the Securities & Exchange Act of 1934, as amended, or of any company registered under the Investment Company Act of 1940, as amended. There is no family relationship among any members of the Board of Directors or the Executive Officers or significant employees of Metal Arts. The Board of Directors met 4 times during the fiscal year ended June 30, 1998. At the present time, the company has no Audit, Compensation or Nominating Committees. All Directors and Executive Officers have been elected to serve as Directors and Executive Officers until the next annual meeting of shareholders of Metal Arts or until their successors have been elected and qualified. There are no arrangements or understandings between any Director or Executive Officer and any other persons pursuant to which any such Directors or Executive Officers was or is to be selected as a Director or nominee for Director. -37- ITEM 11. EXECUTIVE COMPENSATION The aggregate direct remuneration accrued and paid by Metal Arts and Coating Technology, during the fiscal year ended June 30, 1998, to each of Metal Arts' Officers and Directors whose aggregate remuneration exceeded $50,000, and to all Directors and Officers of Metal Arts as a group, is set forth in the following table.
CASH AND CASH-EQUIVALENT FORM OF REIMBURSEMENT SALARIES, FEES, SECURITIES OR DIRECTOR'S PROPERTY, FEES, INSURANCE NAME OF INDIVIDUAL COMMISSIONS BENEFITS OR OR NUMBER OF CAPACITIES IN AND REIMBURSEMENTS, PERSONS IN GROUP WHICH SERVED (1) BONUSES PERSONAL BENEFITS - ---------------- ---------------- ------- ----------------- Stanley J. Dahle President, $ 95,000 $ 5,000 CEO, and Director Albert A. Cauwels Secretary and $ -0- $ -0- Director Geoffrey A. Rich Director $ 80,000 $ 5,000 All Officers and All Officers $175,000 $ 10,000 Directors as a and Directors group (3) persons as a group
OTHER COMPENSATION There was no other compensation of any kind paid to the officers and directors during fiscal year 1998. No executive earned more than $100,000 of total compensation. There is no executive committee and all compensation decisions are made by the Board of Directors. There were no loans made to officers, no directors fees and no long term compensation arrangements. There were no outstanding stock option grants to officers at year end. There are no employment agreements. -38- OPTION EXERCISE AND VALUE TABLE
NUMBER OF SECURITIES IN-THE-MONEY UNDERLYING OPTIONS/SARS SHARES UNEXERCISED AT FISCAL ACQUIRED VALUE OPTIONS/SARS YEAR-END ($)*** ON EXERCISE REALIZED*** AT FISCAL EXERCISABLE (E) / NAME (#) ($) YEAR-END (#) UNEXERCISABLE (U) EXERCISABLE (E) / UNEXERCISABLE (U) - ------------------------------------------------------------------------------------------------------------------------------------ Stanley J. Dahle -0- -0- -0- -0- Albert A. Cauwels -0- -0- -0- -0- Geoffrey A. Rich -0- -0- -0- -0- (1) These capacities include the capacities in which each such individual served Metal Arts and Coating Technology as officers and directors as set forth in the preceding table in Item 10 of this Form 10-K.
Non-Management directors are paid a fee of $250 per meeting attended. There are no such directors at this time. During the past fiscal year, fees aggregating $-0- were paid. Directors who are also full time employees are not paid director's fees. OFFICER COMPENSATION FOR THE PRECEDING THREE FISCAL YEARS
SECURITIES OR PROPERTY, INSURANCE BENEFITS OR FISCAL DIRECTORS FEES, REIMBURSEMENTS NAME YEAR COMMISSIONS & BUSINESS PERSONAL BENEFITS - ---- ---- ---------------------- ----------------- Stanley J. Dahle 1998 $95,000 $5,000 1997 95,000 5,000 1996 85,650 5,000 Albert A. Cauwels 1998 -0- -0- 1997 -0- -0- 1996 -0- -0- Geoffrey A. Rich 1998 80,000 5,000 1997 80,000 5,000 1996 73,400 5,000
STOCK OPTION PLAN On March 3, 1982, Metal Arts adopted an incentive stock option plan (the "Plan" or the "Stock Option Plan") pursuant to Section 422A of the Internal Revenue Code. Under the Plan, as amended, Metal Arts' Board of Directors may grant options to key employees (including executive officers of Metal Arts) to purchase up to an aggregate 850,000 common shares. -39- Such options expire 10 years from the date of the grant (but must be exercised within 5 years of the date of grant for grantees who hold 10 percent or more of the common shares) and are exercisable one year from the date of the grant on a cumulative basis at the rate of 25 percent of the total number of common shares subject to the option granted. Options must be granted at no less than fair market value (but not less than 110 percent of fair market value for grantees who hold 10 percent or more of the common shares). During the Fiscal Year ended June 30, 1998, no options were exercised. There are currently available under the plan 415,000 common shares for future grants. Metal Arts' management believes that the availability of the Plan, and the grants of the options, will enable the Company to attract and hold valuable employees by providing them with incentives to foster growth. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information as of October 1, 1998, with respect to all directors, officers, and persons who are known by Metal Arts to be the beneficial owners of more than five percent (5%) of the common shares of Metal Arts. The common shares are the only voting securities of Metal Arts. All persons listed below have sole voting and investment power with respect to their common shares unless otherwise indicated.
NAME AND ADDRESS OF AMOUNT BENEFICIALLY PERCENT BENEFICIAL OWNER OWNED OF CLASS ---------------- ----- -------- Stanley J. Dahle 1,419,000(a) 20 81 Country Club Drive Rochester, New York Clifford W. Charlson 598,000(b) 8 987 East Avenue Rochester, New York Albert A. Cauwels 486,551 6.8 28 Franklin Street Phelps, New York Geoffrey A. Rich 225,000 3.2 2856 Gildersleeve Road Walworth, New York All officers and directors as a group (3) persons 2,130,551 30 (a) Includes 102,000 shares owned by Mr. Dahle's wife and children of which Mr. Dahle disclaims any beneficial ownership. (b) Includes 18,000 common shares owned by Mr. Charlson's children of which Mr. Charlson disclaims any beneficial interest.
-40- As noted, Metal Arts owns 70 percent of Coating Technology, and therefore, Coating Technology is considered to be a subsidiary of Metal Arts. No member of management of Metal Arts owns any common shares of Coating Technology. No one person other than Metal Arts owns in the aggregate in excess of 5 percent of the common shares of Coating Technology, except Geoffrey A. Rich, who owns 30 percent of the common shares of Coating Technology. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) The following documents are filed as a part of this Form 10-K 1998 Annual Report: 1 and 2. Consolidated Financial Statements and Schedules. (See "INDEX TO FINANCIAL STATEMENTS AND SCHEDULES.") 3. (See "INDEX TO EXHIBITS.") -41- SIGNATURE Pursuant to the requirements of Section 13 or 15 (d) 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. THE METAL ARTS COMPANY, INC. Date: 10-15-98 By: /s/ STANLEY J. DAHLE -------------------------- Stanley J. Dahle President and Chief Executive Officer Date: 10-15-98 By: /s/ ALBERT A. CAUWELS -------------------------- Albert A. Cauwels Secretary and Director Pursuant to the requirement of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: SIGNATURE TITLE DATE - --------- ----- ---- Chairman, President Chief Executive Officer 10-15-98 /s/STANLEY J. DAHLE and Director Stanley J. Dahle /s/ALBERT A. CAUWELS Secretary and Director 10-15-98 Albert A. Cauwels /s/ GEOFFREY A. RICH Director 10-15-98 Geoffrey A. Rich -42- EXHIBITS 3(a) Certificate of Incorporation of Registrant and Amendments thereto. (Filed as Exhibits 2 (a-c, e) to Registration Statement No. 2-69789-NY (the "Registration Statement") and incorporated herein by reference.) 3(a)(1) Certificate of Amendment to the Certificate of Incorporation of Registrant as approved at the 1989 Annual Meeting. 3(b) By-laws of Registrant. (Filed as Exhibit 2(d) to the Registration Statement and incorporated herein by reference.) 4(a) Secured Promissory Note dated November 30, 1992, between Coating Technology and M&T Bank. (Filed as Exhibit 4(i) to the company's Form 10-K for the year ended June 30, 1993 and incorporated herein by reference.) 4(b) Secured Promissory Note dated December 10, 1993, between Coating Technology and M&T Bank. (Filed as Exhibit 4(j) to the company's Form 10-K for the year ended June 30, 1994 and incorporated herein by reference.) 10(a) Lease agreement dated September 1, 1991, between John Albiston, William B. Mendick, Andrew Gallina and Raymond C. Shaheen, as Landlords, and Coating Technology as Tenant, relating to its facility in Rochester, New York. (Filed as Exhibit 10(a) to the company's Form 10-K for the year ended June 30, 1992, and incorporated herein by reference.) 10(b) The company's Stock Option Plan, as approved by the company's shareholders on March 3, 1982. (Filed as Exhibit 10(b) to the company's Form 10-K for the year ended July 3, 1982, and incorporated herein by reference.) 10(c) First amendment to the Incentive Stock Option Plan of the Metal Arts Company, Inc., approved at the 1989 Annual Meeting of shareholders. 10(d) Asset purchase agreement between Coating Technology and Rochester Steel Treating Works, Inc. dated December 22, 1993. (Filed as Exhibit 10(d) to the company's 10-K for the year ended June 30, 1994 and incorporated herein by reference.) 10(e) Option Agreement between the company and LeKem Inc., and Richard Feagins dated February 28, 1994. (Filed as Exhibit 10(e) to the company's Form 10-K for the year ended June 30, 1994 and incorporated herein by reference.) 10(f) Agreement between Metal Arts Company and the New York State Energy Research and Development Authority, dated June 22, 1995. (Filed as Exhibit 10(f) to the company's Form 10-K for the year ended June 30, 1995, and incorporated herein by reference.) 10(g) Lease agreement dated February 19, 1998 between O'Brien and Gere Property Development, Inc. as Landlord and Coating Technology, Inc. as Tenant relating to its new facility at 800 St. Paul St., Rochester, New York. (Filed as exhibit (g) to the Company's Form 10-K for the year ended June 30, 1998, and incorporated herein by reference.) -43- 11 Description of computation of per share earnings. (See Note 2 of Notes to Consolidated Financial Statements of the Metal Arts Company, Inc.) 22. Subsidiaries. The subsidiaries of the company and the state of incorporation are as follows: a. Coating Technology incorporated in the State of New York. b. Metal Arts Acquisitions, Inc. incorporated in the State of New York. (b) Reports on Form 8-K: 8-K dated November 23, 1994 8-K dated June 9, 1995 (c) See Item 14(a) (3), above. (d) See Item 14(a) (2), above. -44- EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from the consolidated financial statements and is qualified in its entirety by reference to such financial statements. 1 12-MOS JUN-30-1998 JUN-30-1998 35,400 0 262,700 0 0 367,500 1,251,600 576,900 1,276,000 836,100 0 75,200 0 0 0 1,276,000 1,871,900 1,871,900 1,504,800 1,973,700 0 0 47,600 (142,300) (14,700) (157,000) 0 0 0 (157,000) 0 0
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