-----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, J277t9jthC+oUiMv3FffzWPSoCBQ2xJPemQxwUntkXFgaTBQFtQBumf2lZHa3n6l FIy/3EdAfKnLoNcURGtCKw== 0000912057-01-515926.txt : 20010516 0000912057-01-515926.hdr.sgml : 20010516 ACCESSION NUMBER: 0000912057-01-515926 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAW TECHNOLOGIES INC /UT CENTRAL INDEX KEY: 0000882159 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL BUILDING CONTRACTORS - NONRESIDENTIAL BUILDINGS [1540] IRS NUMBER: 870464280 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-21818 FILM NUMBER: 1637559 BUSINESS ADDRESS: STREET 1: 2700 S 900 W CITY: SALT LAKE CITY STATE: UT ZIP: 84119 BUSINESS PHONE: 8019773100 MAIL ADDRESS: STREET 2: 2700 SOUTH 900 WEST CITY: SALT LAKE CITY STATE: UT ZIP: 84119 FORMER COMPANY: FORMER CONFORMED NAME: PRIMA ACQUISITIONS INC DATE OF NAME CHANGE: 19600201 10-Q 1 a2049348z10-q.txt 10-Q - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (X) Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2001 or ( ) Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. 0-21818 ------------------------------- (Commission File No.) DAW TECHNOLOGIES, INC. ----------------------------------------------------------- (Exact name of registrant as specified in its charter) UTAH 87-0464280 - ----------------------------- ----------------------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 2700 SOUTH 900 WEST SALT LAKE CITY, UTAH 84119 ----------------------------------------------------------- (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (801) 977-3100 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 ( ) As of May 15, 2001, the Registrant had 15,047,176 shares of Common Stock, $0.01 par value outstanding. - -------------------------------------------------------------------------------- Daw Technologies, Inc. INDEX TO FORM 10-Q PART I FINANCIAL INFORMATION................................................................................. 1 Item 1. Financial Statements Consolidated Balance Sheets - March 31, 2001 (unaudited) and December 31, 2000 ....................... 2 Consolidated Statements of Operations - Three months ended March 31, 2001 and 2000 (unaudited)........................................................................................... 3 Consolidated Statements of Cash Flows - Three months ended March 31, 2001 and 2000 (unaudited)........ 4 Notes to Consolidated Financial Statements (unaudited)................................................ 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................. 9 Item 3. Qualitative and Quantitative Disclosures About Market Risk............................................ 11 PART II OTHER INFORMATION....................................................................................... 12 Item 5. Other Information..................................................................................... 12 Item 6. Exhibits and Reports on Form 8-K...................................................................... 12 Signatures...................................................................................................... 13
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The condensed consolidated financial statements for the three months ended March 31, 2001 and March 31, 2000 and the balance sheet as of March 31, 2001 included herein have not been audited by independent public accountants, but, in the opinion of Management of Daw Technologies, Inc. (the "Company"), all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at March 31, 2001 and the results of operations and the cash flows for the periods presented herein have been made. The results of operations for the three months ended March 31, 2001 are not necessarily indicative of the operating results to be expected for the full fiscal year ending December 31, 2001. The consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Although the Company believes that the disclosures made are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally recognized in the United States of America have been condensed or omitted pursuant to such regulations. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Form 10-K for the fiscal year ended December 31, 2000. 1 Daw Technologies, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except share data) ASSETS
March 31, Dec. 31, 2001 2000 --------- --------- CURRENT ASSETS Cash and cash equivalents $ 420 $ 413 Accounts receivable, net 17,256 9,878 Costs and estimated earnings in excess of billings on contracts in progress 8,975 8,546 Inventories, net 2,442 1,977 Deferred income taxes 601 601 Other current assets 2,385 2,383 --------- --------- Total current assets 32,079 23,798 PROPERTY AND EQUIPMENT - AT COST, NET 2,306 2,404 DEFERRED INCOME TAXES 4,416 4,527 OTHER ASSETS 823 835 --------- --------- $ 39,624 $ 31,564 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Checks written in excess of cash in bank $ - $ 22 Accounts payable and accrued liabilities 11,840 8,831 Billings in excess of costs and estimated earnings on contracts in progress 5,279 910 Line of credit 3,033 2,603 Current portion of long-term obligations 176 88 --------- --------- Total current liabilities 20,328 12,454 LONG-TERM OBLIGATIONS, LESS CURRENT PORTION 89 99 COMMITMENTS AND CONTINGENCIES - - SHAREHOLDERS' EQUITY 3% Series A Convertible Preferred stock, authorized 10,000,000 shares of $0.01 par value; 416 shares issued and outstanding at - - March 31, 2001 and 465 shares on December 31, 2000 Common stock, authorized 50,000,000 shares of $0.01 par value; issued and outstanding 14,927,593 shares at March 31, 2001 and 13,696,071 shares on December 31, 2000 149 137 Additional paid-in capital 21,594 21,606 Accumulated deficit (2,536) (2,732) --------- --------- Total shareholders' equity 19,207 19,011 --------- --------- $ 39,624 $ 31,564 ========= =========
The accompanying notes are an integral part of these statements. 2 Daw Technologies, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except share data)
Three months ended March 31, 2001 2000 -------------- --------------- Revenues $ 14,030 $ 14,675 Cost of goods sold 12,523 13,102 -------------- --------------- Gross profit 1,507 1,573 Operating expenses Selling, general and administrative 952 1,333 Research and development 87 19 Depreciation and amortization 64 120 -------------- --------------- 1,103 1,472 -------------- --------------- Earnings from operations 404 101 Other income (expense) Interest (140) (192) Other, net 49 57 -------------- --------------- (91) (135) -------------- --------------- Earnings (loss) before income taxes 313 (34) Income taxes 117 - -------------- --------------- NET EARNINGS (LOSS) $ 196 $ (34) ============== =============== Earnings (loss) per common share Basic $ 0.01 $ (0.00) Diluted 0.01 (0.00) Weighted-average common and dilutive common equivalent shares outstanding Basic 14,404,394 12,595,011 Diluted 24,793,251 12,595,011
The accompanying notes are an integral part of these statements. 3 Daw Technologies, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands, except share data)
Three months ended March 31, 2001 2000 ------------ ------------ Increase (decrease) in cash and cash equivalents Cash flows from operating activities Net earnings (loss) $ 196 $ (34) Adjustments to reconcile net earnings (loss) to net cash used in operating activities Depreciation and amortization 334 282 Loss on disposition of property and equipment - 13 Deferred income taxes 111 - Changes in assets and liabilities Accounts receivables (7,378) (2,406) Costs and estimated earnings in excess of billings on contracts in progress (429) (1,614) Inventories (465) 330 Other current assets (2) (191) Accounts payable and accrued liabilities 3,009 2,382 Billings in excess of costs and estimated earnings on contracts in progress 4,369 1,033 Other assets 12 47 ------------ ------------ Net cash used in operating activities (243) (158) ------------ ------------ Cash flows from investing activities Payments for purchase of property and equipment (236) (93) ------------ ------------ Net cash used in investing activities (236) (93) ------------ ------------
(Continued) The accompanying notes are an integral part of these statements. 4 Daw Technologies, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED (unaudited) (in thousands, except share data)
Three months ended March 31, 2001 2000 ------------- ------------- Cash flows from financing activities Decrease in checks written in excess of cash in bank (22) (248) Net change in line of credit 430 210 Proceeds from issuance of stock - 435 Changes in long-term obligations 78 (58) ------------- ------------- Net cash provided by financing activities 486 339 ------------- ------------- Net increase in cash and cash equivalents 7 88 Cash and cash equivalents at beginning of period 413 296 ------------- ------------- Cash and cash equivalents at end of period $ 420 $ 384 ============= ============= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for Interest $ 140 $ 192 Income taxes - - NONCASH INVESTING AND FINANCING ACTIVITIES During the three months ended March 31, 2001, 49 Convertible Preferred shares of stock were converted into 1,221,524 shares of common stock
The accompanying notes are an integral part of these statements. 5 Daw Technologies, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands, except share data) 1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS The accompanying unaudited consolidated financial statements have been prepared by Daw Technologies, Inc. (the "Company" or "Daw") in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such regulations. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company's financial position, results of operations and cash flows have been included. All such adjustments are of a normal recurring nature. These financial statements and footnote disclosures in this Form 10-Q for the three months ended March 31, 2001 should be read in conjunction with the Company's annual report on Form 10-K for the year ended December 31, 2000. The results of operations for the three months ended March 31, 2001 may not be indicative of the results that may be expected for the year ending December 31, 2001. 2. NET EARNINGS (LOSS) PER SHARE The Company follows the provisions of Statement of Financial Accounting Standards No. 128 "Earnings Per Share" (SFAS No. 128). SFAS No. 128 requires the presentation of basic and diluted EPS. Basic EPS are calculated by dividing earnings (loss) available to common shareholders by the weighted-average number of common shares outstanding during each period. Diluted EPS are similarly calculated, except that the weighted-average number of common shares outstanding includes common shares that may be issued subject to existing rights with dilutive potential. 3. LINE OF CREDIT During the three months ended March 31, 2001, the Company maintained a revolving line of credit with a domestic bank for the lesser of $3,750 or the available borrowing base. The interest rate is floating and is computed at prime plus 4.5 percent (13.0% as of March 31, 2001). The line of credit requires monthly payments of interest. The Company had $3,033 in borrowings against the line at March 31, 2001 ($2,603 at December 31, 2000). The line of credit originally expired October 31, 1999 and was extended to December 31, 2000. During the three months ended March 31, 2001, the Company signed an extension of the line of credit through April 30, 2001. The line of credit is collateralized by certain domestic receivables and inventories. The line of credit agreement contains restrictive covenants imposing limitations on payments of cash dividends, purchases or redemptions of capital stock, indebtedness and other matters. At times during 2000 and the three months ended March 31, 2001 and at both December 31, 2000 and March 31, 2000, the Company was not in compliance with certain indebtedness covenants. Subsequent to March 31, 2001 the Company signed an extension of the line of credit through July 31, 2001, which included a waiver for the non-compliance with the covenants as of April 30, 2001. The Company is currently reviewing several financing alternatives. 6 Daw Technologies, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (unaudited) (in thousands, except share data) 4. SEGMENT INFORMATION The Company had two reportable segments for the three months ended March 31, 2001, namely 1) cleanrooms and related products and 2) other manufactured goods and services. The Company evaluates performance of each segment based on earnings or loss from operations. The Company's reportable segments are similar in manufacturing processes and are tracked similarly in the accounting system. The manufacturing process for each segment uses the same manufacturing facilities and overhead is allocated similarly to each segment. It is not practical to determine the total assets per segment and depreciation by segment because each segment uses the same manufacturing facility. Identifiable assets by segment are reported below. The Company allocates certain general and administrative expenses, consisting primarily of facilities expenses, utilities, and manufacturing overhead. Segment information for the cleanrooms and related products and other manufactured goods and services are as follows:
Three months ended March 31, 2001 2000 ---------- ----------- Revenues Cleanrooms and related products $ 11,014 $ 11,269 Other manufactured goods and services 3,016 3,406 ---------- ----------- Totals $ 14,030 $ 14,675 ========== =========== Earnings (loss) from operations Cleanrooms and related products $ 628 $ 161 Other manufactured goods and services (224) (60) ---------- ----------- Totals $ 404 $ 101 ========== ===========
March 31, Dec. 31, 2001 2000 ------------ ----------- Total assets Cleanrooms and related products $ 28,563 $ 22,021 Other manufactured goods and services 2,976 1,712 Manufacturing and corporate assets 8,085 7,831 ------------ ----------- Totals $ 39,624 $ 31,564 ============ ===========
7 Daw Technologies, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except share data) 5. EARNINGS (LOSS) PER COMMON SHARE The following data show the amounts used in computing net earnings (loss) per common share, including the effect on net earnings (loss) for preferred stock dividends. The following data also show the weighted average number of shares and rights to acquire shares with dilutive potential. :
March 31, March 31, 2001 2000 -------------- ------------- Net earnings (loss) $ 196 $ (34) Dividends on preferred stock (32) - -------------- ------------- Net earnings (loss) applicable to common stock $ 164 $ (34) ============== =============
March 31, March 31, 2001 2000 -------------- ------------- Common shares outstanding entire period 13,696,071 12,513,114 Net weighted average common shares issued during period 708,323 81,897 -------------- ------------- Weighted average number of common shares used in basic EPS 14,404,394 12,595,011 Dilutive effect of stock options 82,188 - Dilutive effect of preferred stock 10,306,669 - -------------- ------------- Weighted average number of common shares and dilutive potential common shares used in diluted EPS 24,793,251 12,595,011 ============== =============
For the three month period ended March 31, 2000 all of the options and warrants that were outstanding were not included in the computation of diluted EPS because to do so would have been anti-dilutive. For the three month period ended March 31, 2001, all warrants and 698,450 options that were outstanding were not included in the computation because they were not in the money. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. GENERAL The following discussion should be read in conjunction with the financial statements and notes thereto included elsewhere herein. All data in the tables are in thousands, except for percentages and per-share data. The Company's principal line of business is the design, manufacture and installation of cleanroom components and integrated cleanroom systems, primarily for the semiconductor industry. The Company also designs, manufactures and installs cleanroom components and integrated cleanroom systems for other industries, such as the pharmaceutical, flat panel display, disk drive, biotechnology and food processing industries. The Company is a global leader in the cleanroom installation business. In addition, the Company designs and manufactures environmentally controlled "mini-environments," which range in size from the size of a desk to the size of a bus. These mini-environments typically house expensive automation and robotic equipment used in the semiconductor manufacturing process or in pharmaceutical research and development. Finally, the Company offers manufacturing and specialized painting services on a contract basis, primarily to local and regional manufacturers and fabricators. RESULTS OF OPERATIONS SELECTED FINANCIAL INFORMATION
FOR THE THREE MONTHS ENDED MARCH 31, -------------------------------------- 2001 2000 ------------------ ------------------ STATEMENTS OF OPERATIONS DATA: Revenues......................................... $ 14,030 $ 14,675 Gross profit..................................... 1,507 1,573 Selling, general and administrative.............. 952 1,333 Research and development......................... 87 19 Depreciation and amortization.................... 64 120 Interest expense................................. 140 192 Net earnings (loss) ............................. 196 (34)
MARCH 31, 2001 DECEMBER 31, 2000 ------------------ ----------------- BALANCE SHEET DATA: Cash and cash equivalents.......... $ 420 $ 413 Working capital.................... 11,751 11,344 Total assets....................... 39,624 31,564 Total liabilities.................. 20,417 12,553 Total shareholder's equity......... 19,207 19,011
9 DISCUSSION Revenues for the first quarter of 2001 decreased by 4.4% to $14.0 million compared to $14.7 million for the first quarter of 2000. This decrease was primarily attributable to a decrease in cleanroom and related products contract awards. Revenues from cleanroom and related products decreased $0.25 million, or 2.2%, to $11.0 million for the first quarter of 2001 from $11.3 million during the first quarter of 2000. Additionally, the sale of other manufactured products decreased by $0.39 million. Revenues from other manufactured goods and services decreased to $3.0 million for the period ended March 31, 2001, as compared with $3.4 million for the period ended March 31, 2000. Gross profit for first quarter of 2001 decreased by 4.2% to $1.50 million from $1.57 million for the first quarter of 2000 but remained at 10.7% as a percentage of revenue for the first quarter of 2001 compared to 10.7% for the first quarter of 2000. The decrease in gross profit in the first quarter of 2001 as compared to the first quarter of 2000 was due largely to lower than anticipated profits from other manufactured goods and services not related to the semiconductor cleanroom industry. With the Company's efforts to develop a portion of its revenues from sources outside of the semiconductor industry by applying its product and engineering expertise in custom metal fabrication, airflow systems and panel production, the Company continues to experience cost inefficiencies due to ramp-up costs. However, it continues to be the Company's objective to identify, manufacture and sell other products that have high gross profit margin potential. Selling, general and administrative expenses for the first quarter of 2001 decreased 28.6% to $0.95 million, or 6.8% of revenue, compared to $1.3 million, or 9.1% of revenue for the first quarter of 2000. The decrease in selling, general and administrative expenses was the result of the Company's continued efforts to manage and reduce its operating cost structure. The reduction was primarily the result of reduced variable costs and payroll and related expenses. Research and development expenses for the first quarter of 2001 increased 357.9% to $87,000, compared to $19,000 for the first quarter of 2000. This increase is primarily attributable to the Company's efforts to design advanced cleanroom component systems to better position itself for what it believes will be the next generation of cleanroom design, primarily for the semiconductor industry. The Company continues to fund research and development to improve its existing products and develop new products in its diversification program. Interest expense for the first quarter of 2001 decreased to $140,000, compared to $192,000 for the first quarter of 2000. This decrease was directly related to decreased borrowings against the Company's credit line during the first quarter of 2001, compared to borrowings during the first quarter of 2000. LIQUIDITY AND CAPITAL RESOURCES Working capital at March 31, 2001 was $11.8 million, compared to $11.3 million at December 31, 2000. This includes cash and cash equivalents of $420,000 at March 31, 2001 and $413,000 at December 31, 2000. The Company's operations used $243,000 of cash during the first quarter of 2001, compared to using $158,000 of cash from operations during the first quarter of 2000. During the first quarter of 2001, the Company experienced a net increase in receivables of $7.4 million, mostly attributable to the Company's European operations, and an increase in costs and estimated earnings in excess of billings on contracts in progress of $0.4 million. In addition, accounts payable and accrued liabilities increased by $3.0 million and billings in excess of costs and estimated earnings on contracts in progress increased by $4.4 million, also mostly attributable to the Company's European operations. During the three months ended March 31, 2001, the Company maintained a revolving line of credit with a domestic bank for the lesser of $3,750 or the available borrowing base. The interest rate is 10 floating and is computed at prime plus 4.5 percent (13.0% as of March 31, 2001). The line of credit requires monthly payments of interest. The Company had $3,033 in borrowings against the line at March 31, 2001 ($2,603 at December 31, 2000). The line of credit originally expired October 31, 1999 and was extended to December 31, 2000. During the three months ended March 31, 2001, the Company signed an extension of the line of credit through April 30, 2001. The line of credit is collateralized by certain domestic receivables and inventories. The line of credit agreement contains restrictive covenants imposing limitations on payments of cash dividends, purchases or redemptions of capital stock, indebtedness and other matters. At times during 2000 and the three months ended March 31, 2001 and at both December 31, 2000 and March 31, 2000, the Company was not in compliance with certain indebtedness covenants. Subsequent to March 31, 2001 the Company signed an extension of the line of credit through July 31, 2001, which included a waiver for the non-compliance with the covenants as of April 30, 2001. The Company is currently reviewing several financing alternatives. Management believes that existing cash balances, borrowings available under the line of credit and cash generated from operations, will be adequate to meet the Company's anticipated cash requirements through December 31, 2001. However, in the event the Company experiences adverse operating performance, above-anticipated capital expenditure requirements, or is unable to renew or replace its existing line of credit, additional financing may be required. There can be no assurance that such additional financing, if required, would be available on favorable terms, if at all. INFORMATION CONTAINED IN THIS REPORT CONTAINS "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD," "EXPECT," "ANTICIPATE," "ESTIMATE," OR "CONTINUE," OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT INCLUDE, BUT ARE NOT LIMITED TO, THOSE IDENTIFIED IN THIS REPORT, DESCRIBED FROM TIME TO TIME IN THE COMPANY'S OTHER SECURITIES AND EXCHANGE COMMISSION FILINGS, OR DISCUSSED IN THE COMPANY'S PRESS RELEASES. ACTUAL RESULTS MAY VARY MATERIALLY FROM EXPECTATIONS. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The Company is exposed to various market risks, including changes in foreign currency exchange rates and interest rate risks. Market risk is the potential loss arising from adverse change in market rates and prices, such as foreign currency exchange and interest rates. For the Company, these exposures are primarily related to the sale of product to foreign customers and changes in interest rates. The Company does not have any derivatives or other financial instruments for trading or speculative purposes. The Company is exposed to interest rate changes primarily in relation to its revolving credit line debt with a bank. The fair value of the Company's total revolving credit line debt at March 31, 2001 was $3.0 million. Market risk was estimated as the potential decrease (increase) in future earnings and cash flows resulting from a hypothetical 10% increase (decrease) in the Company's estimated weighted average borrowing rate at March 31, 2001. Although most of the interest on the Company's debt is indexed to a market rate, there would be no material effect on the future earnings or cash flows related to the Company's total debt for such a hypothetical change. The Company's financial position is not materially affected by fluctuations in currencies against the U.S. dollar, since funds generated in a foreign currency on projects outside the United States are typically kept in the country in which such funds are generated and are not typically repatriated to the United States, and goods and services provided by the Company are typically priced in United States dollars. The Company's sensitivity analysis of the effects of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency prices, as the preponderance of our foreign sales occur over short periods of time or are denominated in U.S. dollars. 11 PART II - OTHER INFORMATION Item 5. OTHER INFORMATION On April 11, 2001 the Company received a Nasdaq Staff Determination indicating that the Company fails to comply with the $1.00 per share minimum bid price requirement for continued listing set forth in Marketplace Rule 4450(a)(5), and that the Company's common stock is, therefore, subject to delisting from the Nasdaq National Market. The Company has appealed the Staff Determination and has requested an oral hearing before a Nasdaq Listing Qualifications Panel. The hearing on the Company's appeal is scheduled for June 1, 2001. In order to achieve compliance with the minimum bid price requirement of Marketplace Rule 4450(a)(5), the Company is proposing that it complete a four-to-one reverse stock split. The Company has filed a definitive proxy statement for its annual meeting of shareholders to be held on May 30, 2001 that contains a proposal authorizing the Board of Directors to complete a four-to-one reverse stock split at the Board's discretion. In a written submission filed with the Nasdaq Listing Qualifications Panel, the Company is appealing the Staff Determination and is also seeking an extension of time in which to comply with the minimum bid price standard in order to allow the Company time to complete a reverse stock split. There can be no assurance that the Panel will grant the Company's request for continued listing or its request for additional time in which to comply with the applicable listing standards. If the Company's common stock is delisted from the Nasdaq National Market, the stock should, nevertheless, be eligible to be quoted on the OTC Bulletin Board. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. None (b) Reports on Form 8-K. A report on Form 8-K was filed on February 22, 2001 reporting that the Company had released a news release announcing the appointment of Michael J. Shea as President of the Company and Robert G. Chamberlain as Co-Chairman of the Board of Directors. A report on Form 8-K was filed on March 26, 2001 reporting that the Company had released a news release announcing the Company's financial results for the fourth quarter of 2000 and for fiscal year 2000. SIGNATURES 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, on May 15, 2001. DAW TECHNOLOGIES, INC. By: /s/ Michael J. Shea -------------------------------------- Michael J. Shea President By: /s/ B.J. Mendenhall -------------------------------------- B.J. Mendenhall Chief Financial Officer, Principal Financial and Accounting Officer 12 -----END PRIVACY-ENHANCED MESSAGE-----