-----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, P7nNT/AqZtzcw73S6vMojUE+CCZUDOB3YBYqwrC+7Y9SuPe+lEu5ZThOMx66NyDu w/bZ9SXL7iXb9pMXrP2qmw== 0000868267-06-000010.txt : 20061107 0000868267-06-000010.hdr.sgml : 20061107 20061107121706 ACCESSION NUMBER: 0000868267-06-000010 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060930 FILED AS OF DATE: 20061107 DATE AS OF CHANGE: 20061107 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: 061192830 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 September 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 September 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 SEPTEMBER 30, DECEMBER 31, 2006 2005 ASSETS ---- ---- ------ (unaudited) * Current Assets: Cash $ 347,994 $ 524,731 Accounts Receivable 323,784 286,951 Prepaid Expenses 55,239 20,949 ---------- ---------- Total Current Assets 727,017 832,631 ---------- ---------- Property and Equipment: Cobalt 3,100,973 2,675,756 Furniture and Equipment 1,792,600 1,764,624 Building 2,883,675 2,883,675 Construction In Progress 174,863 - Less Accumulated Depreciation (4,771,657) (4,479,057) ---------- ---------- Total Property & Equipment 3,180,454 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 $ 4,095,554 $ 3,865,712 =========== ========== FOOD TECHNOLOGY SERVICE, INC. BALANCE SHEETS SEPTEMBER 30, DECEMBER 31, 2006 2005 LIABILITIES AND STOCKHOLDERS' EQUITY - ----------------------------------- ------ ------ (unaudited) * Current Liabilities: Accounts Payable and Accrued Expenses $ 40,720 $ 28,589 Financing Agreement and Debenture Payable 783,321 733,741 Construction Loan Payable 90,000 - ---------- ---------- Total Current Liabilities 914,041 762,330 ---------- ---------- Stockholders' Equity: Common Stock $.01 par value, 5,000,000 shares authorized, 2,756,364 shares issued on September 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 (8,886,683) (8,983,305) Treasury Stock, 5,155 shares at cost ( 18,491) - ---------- ---------- 3,181,513 3,103,382 ---------- ---------- Total Liabilities and Stockholders' Equity $ 4,095,554 $ 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 SEPTEMBER 30, 2006 AND 2005 2006 2005 ---- ---- (unaudited) (unaudited) Net Sales $ 451,915 $ 449,620 Processing Costs 109,539 84,700 --------- -------- Income from Operations 342,376 364,920 General Administrative and Development 198,827 207,470 Depreciation 98,105 92,316 Interest Expense 17,839 12,889 --------- -------- Income Before Income Taxes 27,605 52,245 Income Taxes Provision for Income Taxes 8,281 15,674 Tax Benefit from Net Operating Loss (8,281) (15,674) --------- -------- Net Income $ 27,605 $ 52,245 ========= ======== Net Income per Common Share ** $0.010 $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 three month period ended September 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 NINE MONTH PERIOD ENDED SEPTEMBER 30, 2006 AND 2005 2006 2005 ---- ---- (unaudited) (unaudited) Net Sales $ 1,313,617 $ 1,245,276 Processing Costs 295,580 255,200 --------- -------- Income from Operations 1,018,037 990,076 General Administrative and Development 579,234 573,523 Depreciation 292,602 274,983 Interest Expense 49,580 36,808 --------- -------- Income Before Income Taxes 96,621 104,762 Income Taxes Provision for Income Taxes 28,986 31,429 Tax Benefit from Net Operating loss (28,986) (31,429) --------- -------- Net Income $ 96,621 $ 104,762 ========= ======== Net Income Per Common Share** $ 0.035 $ 0.038 ========= ======== 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 period ended September 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 Nine Months Nine Months Ended Ended September 30, September 30, 2006 2005 -------------- -------------- (unaudited) (unaudited) Cash Flows from Operations: Sales Income Received $ 1,276,784 $ 1,109,790 Interest Received 2,231 1,293 Interest Paid - - Cash Paid for Operating Expenses (899,205) (816,499) --------- --------- 379,810 294,584 Cash Flows from Investing: Property & Equipment Purchase (628,056) ( 14,412) ---------- --------- (628,056) ( 14,412) Cash Flows from Financing Activities: Proceeds from Issue of Stock - 1,100 Proceeds from Borrowing on Loans 90,000 - Purchase of Treasury Stock ( 18,491) (2,000) Repayment of Loans - (100,000) ---------- --------- 71,509 (100,900) ---------- --------- Net Increase (Decrease) in Cash (176,737) 179,272 Cash at Beginning of Period 524,731 231,877 ---------- ---------- Cash at End of Period $347,994 $ 411,149 ========== ========== _______________________________________________________________________________ Reconciliation of Net Income to Net Cash Provided by Operations Net Income $ 96,621 $ 104,762 Adjustments to Reconcile Net Income to Cash Provided by Operations: Depreciation 292,602 274,982 Accrued Interest 49,580 36,808 (Increase) Decrease in Inventories - 2,510 (Increase) Decrease in Receivables (36,833) (136,086) (Increase) Decrease in Prepaids (34,290) (33,154) Increase (Decrease)in Payables and Accruals 12,130 44,762 ---------- ---------- Net Cash Provided by Operating Activities $379,810 $294,584 ========== ========== Management's Analysis of Quarterly Income Statements Operations - ---------- Food Technology Service Inc., had revenues of $451,915 during the third quarter of 2006 compared to revenues of $449,620 for the same period in 2005. The Company had a profit during the third quarter of 2006 of $27,605 compared to a profit of $52,245 during the third quarter of 2005. For the first three quarters of 2006, the Company had revenues of $1,313,617 and a profit of $96,621. Revenues during the first three quarters of 2005 were $1,245,276 and the Company had a profit of $104,762. Although revenue from irradiation of all product categories has increased, the majority of growth is occurring in medical sterilization. The decrease in profits during these periods was primarily attributable to costs of approximately $50,000 associated with the reverse split of the Company's stock in July, 2006. During the third quarter of 2006, processing costs as a percentage of sales increased by 5.4% when compared to the third quarter of 2005. During the first three quarters of 2006, processing costs as a percentage of sales increased by 2.0% as compared to the first three quarters of 2005. These increases were due to increased labor costs and an increase in consumable supplies. During the third quarter and the first three quarters of 2006, general administrative and development costs as a percentage of sales decreased slightly as compared to the same periods in 2005. At the close of the third quarter of 2006, the Company had cash of $347,994 and accounts receivable of $323,784. Management believes base revenues will continue to exceed expenses during the remainder of 2006. Management expects completion of a new warehouse adjacent to the irradiation facility during the fourth quarter of 2006. The new warehouse will be leased to a large, existing customer and revenue from the lease will offset financing and construction costs. Liquidity and Capital Resources - ------------------------------- As of September 30, 2006, the Company has cash on hand of $347,994 and accounts receivable of $323,784. PART II OTHER INFORMATION Item 1 Legal Proceedings The company is not involved in any legal proceedings. 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: November 7, 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 September 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 November 7, 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 September 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: November 7, 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-----