-----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, KaMo4BYgvLb1JJo4Do1p8djKlkqPX6PH3PXqiioKDxZ3gvt2doLoNG6R4nlhXGHX 9gzQwuvWjHgf8WY71MgubQ== 0000868267-06-000008.txt : 20060814 0000868267-06-000008.hdr.sgml : 20060814 20060814120257 ACCESSION NUMBER: 0000868267-06-000008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060630 FILED AS OF DATE: 20060814 DATE AS OF CHANGE: 20060814 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: 061028026 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 form10qsb.txt 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 June 30, 2006 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." Class June 30, 2006 ----- --------------- Common Stock $.01 Par Value 2,756,364 shares** ** reflects 1 for 4 reverse stock split on July 3, 2006 FOOD TECHNOLOGY SERVICE, INC. BALANCE SHEETS JUNE 30, DECEMBER 31, 2006 2005 ASSETS ---- ---- ------ (unaudited) * Current Assets: Cash $ 269,572 $ 524,731 Accounts Receivable 338,524 286,951 Prepaid Expenses 63,661 20,949 ---------- ---------- Total Current Assets 671,757 832,631 ---------- ---------- Property and Equipment: Cobalt 3,100,973 2,675,756 Furniture and Equipment 1,781,249 1,764,624 Building 2,884,475 2,883,675 Less Accumulated Depreciation (4,673,551) (4,479,057) ---------- ---------- Total Property & Equipment 3,093,146 2,844,998 Land 171,654 171,654 Other Assets: Deposits 5,000 5,000 Loan Costs 11,429 11,429 ---------- ---------- Total Other Assets 16,429 16,429 ---------- ---------- Total Assets $ 3,952,986 $ 3,865,712 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY ----------------------------------- Current Liabilities: Accounts Payable and Accrued Expenses $ 33,595 $ 28,589 Financing Agreement and Debenture Payable 765,483 733,741 ---------- ---------- Total Current Liabilities 799,078 762,330 ---------- ---------- Stockholders' Equity: Common Stock $.01 par value, 5,000,000 shares authorized, 2,756,364 shares issued on June 30, 2006 and 2,750,760 shares outstanding on December 31, 2005 ** 27,564 27,508 Paid in Capital 12,059,123 12,059,179 Deficit (8,914,288) (8,983,305) Treasury Stock, 5,155 shares at cost ( 18,491) - ---------- ---------- 3,153,908 3,103,382 ---------- ---------- Total Liabilities and Stockholders' Equity $ 3,952,986 $ 3,865,712 ========== ========== * Condensed from audited financial statements ** reflects 1 for 4 reverse stock split on July 3, 2006 FOOD TECHNOLOGY SERVICE, INC. STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND 2005 2006 2005 ---- ---- (unaudited) (unaudited) Net Sales $ 437,607 $ 403,166 Processing Costs 92,795 81,622 --------- -------- Income from Operations 344,812 321,544 General Administrative and Development 210,573 188,625 Depreciation 99,008 90,782 Interest Expense 16,503 11,794 --------- -------- Income Before Income Taxes 18,728 30,343 Income Taxes Provision for Income Taxes 5,618 9,102 Tax Benefit from Net Operating Loss (5,618) (9,102) --------- -------- Net Income $ 18,728 $ 30,343 ========= ======== Net Income per Common Share ** $0.007 $0.011 ========= ======== 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 period ended June 30, 2006 are not necessarily indicative of the results to be expected for the full year. ** reflects 1 for 4 reverse stock split on July 3, 2006 FOOD TECHNOLOGY SERVICE, INC. STATEMENTS OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2006 AND 2005 2006 2005 ---- ---- (unaudited) (unaudited) Net Sales $ 861,702 $ 795,659 Processing Costs 186,041 170,499 --------- -------- Income from Operations 675,661 625,160 General Administrative and Development 380,407 366,056 Depreciation 194,497 182,668 Interest Expense 31,741 23,919 --------- -------- Income Before Income Taxes 69,016 52,517 Income Taxes Provision for income taxes 20,705 15,755 Tax Benefit from Net Operating loss (20,705) (15,755) --------- -------- Net Income $ 69,016 $ 52,517 ========= ======== Net Income Per Common Share** $ 0.025 $ 0.019 ========= ======== 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 six month period ended June 30, 2006 are not necessarily indicative of the results to be expected for the full year. ** reflects 1 for 4 reverse stock split on July 3, 2006 FOOD TECHNOLOGY SERVICE, INC. STATEMENTS OF CASH FLOWS Six Months Six Months Ended Ended June 30, 2006 June 30, 2005 -------------- -------------- (unaudited) (unaudited) Cash Flows from Operations: Sales Income Received $ 810,130 $ 697,995 Interest Received 915 808 Interest Paid - - Cash Paid for Operating Expenses (605,070) (561,056) --------- --------- 205,975 137,747 Cash Flows from Investing: Property & Equipment Purchase (442,643) ( 3,716) ---------- --------- (442,643) ( 3,716) Cash Flows from Financing Activities: Proceeds from Issue of Stock - 1,100 Purchase of Treasury Stock ( 18,491) (2,000) Repayment of Loans - (100,000) ---------- --------- ( 18,491) (100,900) Net Increase (Decrease) in Cash (255,159) 33,131 Cash at Beginning of Period 524,731 231,877 ---------- ---------- Cash at End of Period $269,572 $ 265,008 ========== ========== _______________________________________________________________________________ Reconciliation of Net Income to Net Cash Provided by Operations Net Income /(Loss) $ 69,016 $ 52,517 Adjustments to Reconcile Net Income to Cash Provided by Operations: Depreciation 194,497 182,668 Accrued Interest 31,741 23,919 (Increase) Decrease in Inventories - 623 (Increase) Decrease in Receivables (51,572) (97,663) (Increase) Decrease in Prepaids (42,714) (53,399) Increase (Decrease)in Payables and Accruals 5,007 29,082 ---------- ---------- Net Cash Provided by Operating Activities $205,975 $137,747 ========== ========== Management's Analysis of Quarterly Income Statements Operations - ---------- Food Technology Service Inc., had revenues of $437,607 during the second quarter of 2006 compared to revenues of $403,166 for the same period in 2005. This is an increase of nearly nine percent. The Company had a profit during the second quarter of 2006 of $18,728 compared to a profit of $30,343 during the second quarter of 2005. For the first half of 2006, the Company had revenues of $861,702 and a profit of $69,016. Revenues during the first half of 2005 were $795,659 and the Company had a profit of $52,517. Revenues increased by eight percent and profits increased by almost 32% in the first half of 2006 compared to the same period in 2005. Management attributes increased revenue to a growing demand for sterilization of medical products. Although revenue from irradiation of all product categories has increased, the majority of growth is occurring in medical sterilization. Profits during the second quarter of 2006 as compared to the same period in 2005 were diminished by costs associated with the distribution of the annual report and the reverse split of the Company's stock. Fees, printing and similar costs for these activities were about $35,000 in the second quarter of 2006. Approximately $20,000 in additional expense for the reverse split was incurred in the third quarter of 2006. During the second quarter of 2006, processing costs as a percentage of sales were 21.2%. This compares to 20.3% in the second quarter of 2005. Processing costs as a percentage of sales remained constant. This reflects the fact that processing costs are relatively fixed. General administrative and development costs as a percentage of sales during the second quarter of 2006 were 48.1%. This compares to 46.8% in the second quarter of 2005 and reflects the costs associated with the annual report and the reverse split. During the first half of 2006, general administrative and development costs as a percentage of sales were 44.1% compared to 46% during the first half of 2005. This increase was due to costs associated with the annual meeting and reverse split. Overall, expenses during the first half of 2006 were about $64,000 higher than in the same period in 2005, an increase of nearly 12 percent. This increase was primarily due to the previously described costs for the annual meeting and reverse split, increased depreciation due to the addition of Cobalt energy source in January, 2006 and rising interest rates. Management anticipates increased revenue during the remaining quarters of 2006 based on growing demand by both food and medical customers. Management believes base revenues will continue to exceed expenses during the remainder of 2006. Liquidity and Capital Resources - ------------------------------- As of June 30, 2006, the Company has cash on hand of $269,572 and accounts receivable of $338,524. PART II OTHER INFORMATION Item 1 Legal Proceedings The company is not involved in any legal proceedings. Item 2-5 Not applicable Item 6 The Company filed two Form 8-K Reports during the quarter ended June 30, 2006. The first report was dated June 6 and reported Item 7 (Regulation FD Disclosure), Item 8 (Other Events) and Item 9(Exhibits). The second report was dated June 26 and reported Item 5 (Amendment to Articles), Item 8(Other Events) and Item 9 (Exhibits). 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: August 14, 2006 FOOD TECHNOLOGY SERVICE, INC. /S/ Richard Hunter --------------------------------- Richard Hunter, Ph.D., Chief Executive Officer and Chief Financial Officer EX-31 2 ex32.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 June 30, 2006 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 August 14, 2006 EX-32 3 ex31.txt EXHIBIT 31 CERTIFICATION EXHIBIT 31 I Certify that: 1. I have reviewed this Quarterly Report on Form 10-QSB of Food Technology Service, Inc. for the three months ended June 30, 2006. 2. Based on my knowledge, this Quarterly 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 Quarterly Report; 3. Based on my knowledge, the Financial Statements, and other financial information included in the Quarterly 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 Quarterly 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 Quarterly 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 Quarterly Report (the "Evaluation Date") and; c) Presented in this Quarterly 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 Quarterly 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: August 14, 2006 FOOD TECHNOLOGY SERVICE, INC. By: / s/ Richard G. Hunter ---------------------------- Richard G. Hunter, Ph.D. Chief Executive Officer and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----