-----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, Pb1mfPf67M7UKLBCHdr3cU24WJfl/ulqPjLGbOU1H6HOk5Lvmao6+HT1U8eO/ivJ 7bk956d6r0BPkyMnp9REMQ== 0000868267-05-000019.txt : 20051031 0000868267-05-000019.hdr.sgml : 20051031 20051031095221 ACCESSION NUMBER: 0000868267-05-000019 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051031 DATE AS OF CHANGE: 20051031 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOOD TECHNOLOGY SERVICE INC CENTRAL INDEX KEY: 0000868267 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 592618503 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-19047 FILM NUMBER: 051164978 BUSINESS ADDRESS: STREET 1: 502 PRARIE MINE RD CITY: MULBERRY STATE: FL ZIP: 33860 BUSINESS PHONE: 8634250039 MAIL ADDRESS: STREET 1: 502 PRARIE MINE RD CITY: MULBERRY STATE: FL ZIP: 33860 FORMER COMPANY: FORMER CONFORMED NAME: VINDICATOR INC /FL/ DATE OF NAME CHANGE: 19930328 FORMER COMPANY: FORMER CONFORMED NAME: VINDICATOR OF FLORIDA INC /FL/ DATE OF NAME CHANGE: 19600201 10QSB 1 form10q.txt FORM 10QSB FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Three Months Ended September 30,2005 Commission File Number 0-19047 ------------ INCORPORATED IN FLORIDA IRS IDENTIFICATION NO. 59-2618503 FOOD TECHNOLOGY SERVICE, INC. 502 Prairie Mine Road, Mulberry, FL 33860 (863) 425-0039 "Indicate by check mark whether the registrant has filed all annual, quarterly and other reports required to be filed with the Commission within the past 90 days and in addition has filed the most recent annual report required to be filed. Yes X . No ." -- -- "Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date." Outstanding as of September 30, 2005 and December 31, 2004 Class 2005 2004 ----- ---- ---- Common Stock $.01 Par Value 11,001,038 Shares 11,001,038 Shares FOOD TECHNOLOGY SERVICE, INC. BALANCE SHEETS SEPTEMBER 30, DECEMBER 31, 2005 2004 ASSETS ---- ---- ------ (unaudited) * Current Assets: Cash $ 411,149 $ 231,877 Accounts Receivable 272,032 135,946 Inventory 3,047 5,557 Prepaid Expenses 33,154 - ---------- ---------- Total Current Assets 719,382 373,380 ---------- ---------- Property and Equipment: Cobalt 2,675,756 2,675,756 Furniture and Equipment 1,754,130 1,739,717 Building 2,883,675 2,883,675 Less Accumulated Depreciation (4,387,798) (4,112,815) ---------- ---------- Total Property & Equipment 2,925,763 3,186,333 Land 171,654 171,654 Other Assets: Deposits 5,000 5,000 ---------- ---------- Total Assets $ 3,821,799 $ 3,736,367 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY ----------------------------------- Current Liabilities: Accounts Payable and Accrued Expense $ 34,797 $ 18,035 Financing Agreement and Debenture Payable 719,707 782,899 ---------- ---------- Total Current Liabilities 754,504 800,934 ---------- ---------- Stockholders' Equity: Common Stock $.01 par value, 20,000,000 shares authorized, 11,003,038 shares issued on September 30, 2005 and 11,001,038 shares issued on December 31, 2004 110,030 110,010 Paid in Capital 11,976,657 11,975,577 Deficit (9,017,392) (9,122,154) Treasury Stock, 2,000 shares at cost ( 2,000) - ---------- ---------- 3,067,295 2,963,433 Less-Common Stock Issued For Receivables - (28,000) ---------- ---------- Total Stockholders' Equity 3,067,295 2,935,433 ---------- ---------- Total Liabilities and Stockholders' Equity $ 3,821,799 $ 3,736,367 ========== ========== * Condensed from audited financial statements FOOD TECHNOLOGY SERVICE, INC. STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 2005 2004 ---- ---- (unaudited) (unaudited) Net Sales $ 449,620 $ 403,210 Processing Costs: 84,700 81,952 --------- -------- Income from Operations 364,920 321,258 General Administrative and Development 207,955 168,042 Depreciation 92,316 95,413 Interest Expense 12,889 12,021 Interest (Income) (485) (354) --------- -------- Income/(Loss) Before Income Taxes 52,245 46,136 Income Taxes Provision for Income Taxes 15,674 13,841 Tax Benefit from Net Operating Loss (15,674) (13,841) --------- -------- Net Income/(Loss) $ 52,245 $ 46,136 ========= ======== Net Income/(Loss) per Common Share $0.005 $0.004 ========= ======== NOTE 1: BASIS OF PRESENTATION The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normally recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three month periods ended September 30, 2005 are not necessarily indicative of the results to be expected for the full year. FOOD TECHNOLOGY SERVICE, INC. STATEMENTS OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2005 AND 2004 2005 2004 ---- ---- (unaudited) (unaudited) Net Sales $ 1,245,276 $ 967,797 Processing Costs 255,200 226,369 --------- -------- Income from Operations 990,076 741,428 General Administrative and Development 574,817 520,690 Depreciation 274,983 290,446 Interest Expense 36,808 35,620 Interest (Income) (1,294) (354) --------- -------- Income / (Loss) Before Income Taxes 104,762 (104,974) Income Taxes Provision for income taxes 31,429 0 Tax Benefit from Net Operating loss (31,429) ( 0) --------- -------- Net Income / (Loss) $ 104,762 $ (104,974) ========= ======== Net Income /(Loss) Per Common Share $ 0.010 $ (0.010) ========= ======== NOTE 1: BASIS OF PRESENTATION The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normally recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the nine month periods ended September 30, 2005 are not necessarily indicative of the results to be expected for the full year. FOOD TECHNOLOGY SERVICE, INC. STATEMENTS OF CASH FLOWS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2005 AND 2004 2005 2004 -------------- -------------- (unaudited) (unaudited) Cash Flows from Operations: Sales Income Received $1,109,790 $ 874,141 Interest Received 1,293 - Interest Paid - 354 Cash Paid for Operating Expenses (816,499) (715,714) --------- --------- 294,584 158,781 Cash Flows from Investing: Property & Equipment Purchase (14,412) ( 4,036) ---------- --------- (14,412) ( 4,036) Cash Flows from Financing Activities: Proceeds from Issue of Stock 1,100 - Purchase of Treasury Stock ( 2,000) Repayment of Loans (100,000) - ---------- --------- (100,900) - Net Increase (Decrease) in Cash 179,272 154,745 Cash at Beginning of Period 231,877 89,410 ---------- ---------- Cash at End of Period $411,149 $ 244,155 ========== ========== _______________________________________________________________________________ Reconciliation of Net Income to Net Cash Provided by Operations Net Income /(Loss) $ 104,762 ($104,974) Adjustments to Reconcile Net Income to Cash Provided by Operations: Depreciation 274,982 290,445 Accrued Interest 36,808 35,620 (Increase) Decrease in Inventories 2,510 (4,216) (Increase) Decrease in Receivables (136,086) (93,656) (Increase) Decrease in Prepaids (33,154) - Increase (Decrease)in Payables and Accruals 44,762 35,562 ---------- ---------- Net Cash Provided by Operating Activities $294,584 $158,781 ========== ========== FOOD TECHNOLOGY SERVICE, INC. STATEMENT OF STOCKHOLDERS' EQUITY 2004(unaudited) Common Stock Treasury Stock Paid-In Capital Deficit - ------------ ------------ -------------- --------------- ------- Balance January 1, 2004 $ 110,010 - $ 11,975,577 ($9,016,423) Net Loss for Period - - - (104,974) ---------- ------------ ---------- ---------- Balance September 30, 2004 $ 110,010 - $ 11,975,577 ($9,121,397) ========== ============ ========== ========== ______________________________________________________________________________ 2005 (unaudited) - --------------- Balance January 1, 2005 $ 110,010 $ - $11,975,577 ($9,122,154) Issued 2,000 shares Common Stock 20 - 1,080 - Purchased 2,000 shares Treasury Stock - 2,000 - - Net Income for Period - - - 104,762 ---------- ----------- ---------- ---------- Balance September 30, 2005 $ 110,030 $ 2,000 $11,976,657 ($9,017,392) ========== ============ ========== ========== (a) Earnings per common share, assuming no dilution, are based on the number of shares outstanding on September 30, 2005 - 11,001,038 and September 30, 2004 - 11,001,038. (b) The foregoing information is unaudited, but, in the opinion of Management, includes all adjustments, consisting of normal accruals, necessary for a fair presentation of the results for the period reported. Management's Analysis of Quarterly Income Statements Operations - ---------- Food Technology Service, Inc. had revenue of $449,620 during the third quarter of 2005. This compares to revenue of $403,210 for the same period in 2004. This is an increase of about twelve percent. The Company had a profit during the third quarter of 2005 of $52,245 compared to a profit of $46,136 during the third quarter of 2004. For the first nine months of 2005, the Company had revenues of $1,245,276 and a profit of $104,762. Revenues during the first three quarters of 2004 were $967,797 and the Company had a loss of ($104,974). Revenues increased by about twenty-nine percent during the first three quarters of 2005 compared to the same period in 2004. Management attributes increased revenue to a growing customer base made up of companies that regularly require irradiation of products. Past revenues have been impacted by large intermittent customers that used the Company's services unpredictably. The Company has devoted significant effort to expanding the base of customers requiring service on a regular basis. No large intermittent customers have required services since the fourth quarter of 2003. During the third quarter of 2005, processing costs as a percentage of sales were 18.8%. This compares to 20.3% in the third quarter of 2004. Processing costs as a percentage of sales decreased from 23.4% during the first nine months of 2004 to 20.5% in the first nine months of 2005. This reflects the fact that processing costs are relatively fixed. General administrative and development costs are also relatively fixed within the current revenue range. However, such costs as a percentage of sales during the third quarter of 2005 were 46.3%, up from 41.7% in the third quarter of 2004. This was largely due to increased non- recurring expenses (approximately $40,000) during the third quarter of 2004. Such costs included attainment of ISO certification, installation of a new dosimetry system and the planned construction of a new warehouse. During the first nine months of 2005, general administrative and development costs as a percentage of sales were 46.2% compared to 53.8% during the first nine months of 2004. The Company reduced its outstanding debt by $100,000 during the first nine months of 2005 and currently owes approximately $755,000 in total debt. The Company currently has cash of $411,149 and accounts receivable of $272,032. A large portion of this cash will be used in the next several months to purchase additional Cobalt energy source needed to accommodate continuing customer growth. The Company does not anticipate incurring any additional debt as a result of this Cobalt purchase. Management anticipates increased revenue during the last quarter of 2005 based on growing customer demand, particularly from medical customers. General administrative and development costs are expected to increase during the fourth quarter of 2005 due to expenditures associated with the installation of a new dosimetry system and the planned construction of a new warehouse. These are largely one-time costs. The new dosimetry system will provide greater efficiency and the warehouse will free space in the existing facility to accommodate customer growth. The new warehouse will be leased to a large, existing customer and revenue from the lease will offset financing and construction costs. Management believes base revenues will continue to grow and exceed expenses during the remainder of 2005. Liquidity and Capital Resources - ------------------------------- As of September 30, 2005, the Company has cash of $411,149 and accounts receivable of $272,032. PART II OTHER INFORMATION Item 1. Legal proceedings Reference is made to the information contained under Item 3- Legal Proceedings in the Company's Form 10KSB Report Filed for year ended December 31, 2004. Item 2-6 Not applicable SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: October 31, 2005 FOOD TECHNOLOGY SERVICE, INC. /S/ Richard Hunter --------------------------------- Richard Hunter, Ph.D., Chief Executive Officer and Chief Financial Officer EX-31 2 exhibit31a.txt EXHIBIT 31 CERTIFICATION EXHIBIT 31 I Certify that: 1. I have reviewed this Quarter Report on Form 10-QSB of Food Technology Service, Inc. for the three months ended September 30, 2005. 2. Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report; 3. Based on my knowledge, the Financial Statements, and other financial information included in the Annual Report fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this Annual Report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13A-14 and 15D-14 for the registrant and we have: a) Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this Annual Report (the "Evaluation Date") and; b) Presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) All significant deficiencies in the design or operation of internal controls, which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this Annual Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: October 31, 2005 FOOD TECHNOLOGY SERVICE, INC. By: / s/ Richard G. Hunter ---------------------------- Richard G. Hunter, Ph.D. Chief Executive Officer and Chief Financial Officer EX-32 3 exhibit32a.txt EXHIBIT 32 Certification of Periodic Report EXHIBIT 32 Section 906 of The Sarbanes-Oxley Act of 2002 In connection with the Quarterly Report of Food Technology Service, Inc.(the "Company") on Form 10-QSB for the period ending September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Richard G. Hunter, Ph.D. as Chief Executive Officer and Chief Financial Officer, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /S/ Richard Hunter - ------------------ Richard G. Hunter, Ph.D. Chief Executive Officer and Chief Financial Officer October 31, 2005 -----END PRIVACY-ENHANCED MESSAGE-----