-----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, U6YYMvVxfD8ZJvTulYR5/kHBsSF4AEkzZMCJcQXT4Kx8O6WiP4dqnKcorteSeNsA etkhDWVT1tNTdwjtLRHdRQ== 0000868267-07-000015.txt : 20071105 0000868267-07-000015.hdr.sgml : 20071105 20071105092630 ACCESSION NUMBER: 0000868267-07-000015 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070930 FILED AS OF DATE: 20071105 DATE AS OF CHANGE: 20071105 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: 071212467 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, 2007 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, 2007 ----- --------------- Common Stock $.01 Par Value 2,756,458 shares** ** reflects 1 for 4 reverse stock split on July 3, 2006 FOOD TECHNOLOGY SERVICE, INC. BALANCE SHEETS SEPTEMBER 30, DECEMBER 31, 2007 2006 ASSETS ---- ---- ------ (unaudited) * Current Assets: Cash $ 148,414 $ 425,110 Accounts Receivable Less Allowance For Doubtful Accounts of $2,500 in 2006 and 2007 411,032 362,684 Prepaid Expenses 15,893 27,852 ---------- ---------- Total Current Assets 575,339 815,646 ---------- ---------- Property and Equipment: Cobalt 3,900,496 3,100,973 Furniture and Equipment 1,797,899 1,792,601 Building 3,282,029 3,277,209 Less Accumulated Depreciation (5,144,908) (4,868,623) ---------- ---------- Total 3,835,516 3,302,160 Land 171,654 171,654 ---------- ---------- Total Property and Equipment 4,007,170 3,473,814 --------- --------- Other Assets: Deposits 5,000 5,000 Loan Costs 9,715 11,429 Deferred Income Tax 650,000 650,000 ---------- ---------- Total Other Assets 664,715 666,429 ---------- ---------- Total Assets $ 5,247,224 $ 4,955,889 =========== ========== FOOD TECHNOLOGY SERVICE, INC. BALANCE SHEETS SEPTEMBER 30, DECEMBER 31, LIABILITIES AND STOCKHOLDERS' EQUITY 2007 2006 - ----------------------------------- ------ ------ (unaudited) * Current Liabilities: Current Portion of Note Payable $ 5,497 $ 3,113 Accounts Payable and Accrued Expenses 58,396 80,855 Financing Agreement and Debenture Payable 858,931 801,576 ---------- ---------- Total Current Liabilities 922,824 885,544 ---------- -------- Note Payable After One Year 241,931 246,787 ---------- -------- Total Liabilities 1,164,755 1,132,331 ---------- ---------- Stockholders' Equity: Common Stock $.01 par value, 5,000,000 shares authorized, 2,756,458 shares issued on September 30, 2007 and 2,756,458 shares outstanding on December 31, 2006 ** 27,565 27,565 Paid in Capital 12,105,485 12,059,122 Deficit (8,032,090) (8,244,638) Treasury Stock, 5,155 shares at cost (18,491) (18,491) ---------- ---------- 4,082,469 3,823,558 ---------- ---------- Total Liabilities and Stockholders' Equity $ 5,247,224 $ 4,955,889 ========== ========== * 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, 2007 AND 2006 2007 2006 ---- ---- (unaudited) (unaudited) Net Sales $ 576,197 $ 451,915 Processing Costs 101,984 109,539 --------- -------- Income from Operations 474,213 342,376 General Administrative and Development 222,076 198,827 Depreciation 93,171 98,105 Interest Expense 28,939 17,839 Loss on Currency Exchange - - --------- -------- Income Before Income Taxes 130,027 27,605 Income Taxes Provision for Income Taxes 39,008 8,281 Tax Benefit from Net Operating Loss (39,008) (8,281) --------- -------- Net Income $ 130,027 $ 27,605 ========= ======== Net Income per Common Share ** $0.047 $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 three month period ended September 30, 2007 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 MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 2007 2006 ---- ---- (unaudited) (unaudited) Net Sales $1,594,357 $1,313,617 Processing Costs 318,372 295,580 --------- -------- Income from Operations 1,275,985 1,018,037 General Administrative and Development 671,474 579,234 Depreciation 276,285 292,602 Interest Expense 85,693 49,580 Loss on Currency Exchange 29,985 - --------- -------- Income Before Income Taxes 212,548 96,621 Income Taxes Provision for income taxes 63,764 28,986 Tax Benefit from Net Operating loss (63,764) (28,986) --------- -------- Net Income $ 212,548 $ 96,621 ========= ======== Net Income per Common Share ** $0.077 $0.035 ========= ======== 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, 2007 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 Sept. 30, 2007 Sept. 30, 2006 -------------- -------------- (unaudited) (unaudited) Cash Flows from Operations: Sales Income Received $ 1,546,189 $1,276,784 Interest Received 374 2,231 Interest Paid (28,338) - Cash Paid for Operating Expenses (982,808) (899,205) --------- --------- 535,417 379,810 Cash Flows from Investing: Property & Equipment Purchase (809,641) (628,056) ---------- --------- (809,641) (628,056) Cash Flows from Financing Activities: Proceeds from Borrowing on Loans - 90,000 Purchase of Treasury Stock - (18,491) Repayment of Loans (2,472) - ---------- --------- (2,472) 71,509 ---------- --------- Net Increase (Decrease) in Cash (276,696) (176,737) Cash at Beginning of Period 425,110 524,731 ---------- ---------- Cash at End of Period $148,414 $ 347,994 ========== ========== _______________________________________________________________________________ Reconciliation of Net Income to Net Cash Provided by Operations Net Income /(Loss) $ 212,548 $ 96,621 Adjustments to Reconcile Net Income to Cash Provided by Operations: Depreciation and Amortization 277,999 292,602 Accrued Interest 57,355 49,580 Non-Cash Options Granted 46,364 - (Increase) Decrease in Receivables (48,349) (36,833) (Increase) Decrease in Prepaids 11,959 (34,290) Increase (Decrease)in Payables and Accruals (22,459) 12,130 ---------- ---------- Net Cash Provided by Operating Activities $535,417 $379,810 ========== ========== Management's Analysis of Quarterly Income Statements Operations - ---------- Food Technology Service Inc., had revenues of $576,197 during the third quarter of 2007 compared to revenues of $451,915 for the same period in 2006. This is an increase of 27.5 percent. The Company had a profit during the third quarter of 2007 of $130,027 compared to a profit of $27,605 during the third quarter of 2006. This is an increase of about 371 percent. For the first three quarters of 2007, the Company had record revenues of $1,594,357 and a profit of $212,548. Revenues during the first three quarters of 2006 were $1,313,617 and the Company had a profit of $96,621. Revenues increased by 21.3 percent and profits increased by about 121 percent in the first three quarters of 2007 compared to the same period in 2006. Management attributes increased revenue to a growing customer base that requires irradiation of products on a regular basis. The majority of revenue growth is occurring in medical sterilization. During the third quarter of 2007, processing costs as a percentage of sales were 17.7 percent, which compares favorably to 24.2 percent in the third quarter of 2006. General administrative and development costs as a percentage of sales during the third quarter of 2007 were 38.5 percent compared to 44 percent in the third quarter of 2006. During the first three quarters of 2007, processing costs as a percentage of sales were 20 percent compared to 22.5 percent during the first three quarters of 2006. General, administrative and development costs as a percentage of sales were 42 percent during the first three quarters of 2007 compared to 44 percent during the same period in 2006. The decline in processing costs and general, administrative and development expenses, as a percentage of sales, was due primarily to the increase in sales as such costs remained relatively constant. During the third quarter, the Company paid the remaining balance of $200,000 on a loan for Cobalt received in January, 2007. Management anticipates increased revenue during the remaining quarter of 2007 based on growing demand for irradiation services. Management believes base revenues will continue to exceed expenses during the remainder of 2007. Liquidity and Capital Resources - ------------------------------- As of September 30, 2007, the Company has cash on hand of $148,414, and accounts receivable of $411,032. 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 5, 2007 FOOD TECHNOLOGY SERVICE, INC. /S/ Richard Hunter --------------------------------- Richard Hunter, Ph.D., Chief Executive Officer and Chief Financial Officer EX-31 2 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, 2007. 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 5, 2007 FOOD TECHNOLOGY SERVICE, INC. By: / s/ Richard G. Hunter ---------------------------- Richard G. Hunter, Ph.D. Chief Executive Officer and Chief Financial Officer EX-32 3 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, 2007 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 5, 2007 -----END PRIVACY-ENHANCED MESSAGE-----