UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[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
For the transition period from _______________ to _______________
Commission file number: 0-17219
GENTNER COMMUNICATIONS CORPORATION
----------------------------------
(Exact name of registrant as specified in its charter)
Utah 87-0398877
---- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1825 Research Way, Salt Lake City, Utah 84119
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 975-7200
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-----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act 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.
[X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class of Common Stock May 10, 2001
$0.001 par value 8,632,278 shares
GENTNER COMMUNICATIONS CORPORATION
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets
March 31, 2001 (unaudited) and June 30, 2000.................... 3
Consolidated Statements of Income
Three Months Ended March 31, 2001 and 2000 (unaudited).......... 4
Consolidated Statements of Income
Nine Months Ended March 31, 2001 and 2000 (unaudited)........... 5
Consolidated Statements of Cash Flows
Nine Months Ended March 31, 2001 and 2000 (unaudited)........... 6
Notes to Consolidated Financial Statements....................... 7
Item 2. Management's Discussion and Analysis of Plan of Operation........12
Item 3. Qualitative and Quantitative Disclosure about Market Risk........18
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.................................19
2
GENTNER COMMUNICATIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited)
March 31, June 30,
-------------------------------
2001 2000
---- ----
ASSETS
Current assets:
Cash and cash equivalents.................................. $ 6,041,617 $ 5,374,996
Accounts receivable........................................ 6,065,601 4,153,677
Inventory.................................................. 5,175,898 3,484,992
Income tax receivable...................................... -- 987,912
Deferred taxes............................................. 136,000 136,000
Other current assets....................................... 548,368 678,744
------------- ------------
Total current assets................................... 17,967,484 14,816,321
Property and equipment, net.................................... 3,730,219 3,050,349
Related party note receivable.................................. 13,164 52,488
Goodwill, net.................................................. 2,680,763 --
Other assets, net.............................................. 262,969 1,373
------------- ------------
Total assets........................................... $ 24,654,599 $ 17,920,531
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................... $ 701,807 $ 767,095
Accrued compensation and other benefits.................... 374,370 694,219
Income tax payable......................................... 356,498 --
Other accrued expenses..................................... 988,136 1,045,607
Current portion of capital lease obligations............... 219,931 249,859
------------- ------------
Total current liabilities.............................. 2,640,742 2,756,780
Capital lease obligations...................................... 47,418 205,530
Deferred tax liability......................................... 205,000 205,000
------------- ------------
Total liabilities...................................... 2,893,160 3,167,310
Shareholders' equity:
Common stock, 50,000,000 shares authorized, par value $.001,
8,632,278 and 8,427,145 shares issued and outstanding
at March 31, 2001 and June 30, 2000, respectively........ 8,632 8,427
Additional paid-in capital................................. 9,034,321 6,697,090
Retained earnings.......................................... 12,718,258 8,047,704
Cumulative foreign currency translation adjustment......... 228 --
------------- ------------
Total shareholders' equity............................. 21,761,439 14,753,221
------------- ------------
Total liabilities and shareholders' equity............. $ 24,654,599 $ 17,920,531
============= ============
See accompanying notes
3
GENTNER COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
----------------------------------------
2001 2000
---- ----
Product sales............................................ $ 7,665,910 70.0% $ 6,161,804 78.3%
Service sales............................................ 3,277,781 30.0% 1,705,629 21.7%
----------- ---- ----------- ----
Total net sales...................................... 10,943,691 100.0% 7,867,433 100.0%
Cost of goods sold - products............................ 2,853,335 37.2% 2,152,928 34.9%
Cost of goods sold - services............................ 1,730,268 52.8% 751,526 44.1%
----------- -----------
Total cost of goods sold............................. 4,583,603 41.9% 2,904,454 36.9%
----------- ---- ----------- ----
Gross profit............................................. 6,360,088 58.1% 4,962,979 63.1%
Operating expenses:
Marketing and selling................................ 1,998,746 18.3% 1,808,549 23.0%
General and administrative........................... 1,133,525 10.3% 779,953 9.9%
Product development.................................. 743,815 6.8% 436,582 5.6%
----------- ---- ----------- ----
Total operating expenses......................... 3,876,086 35.4% 3,025,084 38.5%
----------- ---- ----------- ----
Operating income................................. 2,484,002 22.7% 1,937,895 24.6%
Other income (expense):
Interest income...................................... 100,360 0.9% 59,355 0.8%
Interest expense..................................... (9,008) (0.1)% (15,689) (0.2)%
Other, net........................................... 492 0.0% (2,576) (0.0)%
Loss on foreign currency transactions................ (22,567) (0.2)% -- 0.0%
----------- ---- ----------- ----
Total other income............................... 69,277 0.6% 41,090 0.6%
----------- ---- ----------- ----
Income before income taxes............................... 2,553,279 23.3% 1,978,985 25.2%
Provision for income taxes............................... 952,266 8.7% 738,730 9.4%
----------- ---- ----------- ----
Net income....................................... $ 1,601,013 14.6% $ 1,240,255 15.8%
=========== ==== =========== ====
Basic earnings per common share.......................... $ 0.19 $ 0.15
=========== ===========
Diluted earnings per common share........................ $ 0.18 $ 0.14
=========== ===========
See accompanying notes
4
GENTNER COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Nine Months Ended
March 31,
----------------------------------------
2001 2000
---- ----
Product sales............................................ $23,244,038 73.6% $18,284,087 81.7%
Service sales............................................ 8,340,859 26.4% 4,083,458 18.3%
----------- ---- ----------- ----
Total net sales...................................... 31,584,897 100.0% 22,367,545 100.0%
Cost of goods sold - products............................ 8,545,473 36.8% 6,516,618 35.6%
Cost of goods sold - services............................ 4,317,349 51.8% 2,062,123 50.5%
----------- -----------
Total cost of goods sold............................. 12,862,822 40.7% 8,578,741 38.4%
----------- ---- ----------- ----
Gross profit............................................. 18,722,075 59.3% 13,788,804 61.6%
Operating expenses:
Marketing and selling................................ 5,994,077 19.0% 4,845,321 21.7%
General and administrative........................... 3,630,578 11.5% 2,276,966 10.2%
Product development.................................. 1,863,459 5.9% 1,393,170 6.2%
----------- ---- ----------- ----
Total operating expenses......................... 11,488,114 36.4% 8,515,457 38.1%
----------- ---- ----------- ----
Operating income................................. 7,233,961 22.9% 5,273,347 23.5%
Other income (expense):
Interest income...................................... 278,592 0.9% 160,484 0.7%
Interest expense..................................... (32,442) (0.1)% (51,650) (0.2)%
Other, net........................................... 17,950 0.0% (4,034) 0.0%
Loss on foreign currency transactions................ (12,017) (0.0)% -- 0.0%
----------- ---- ----------- ----
Total other income............................... 252,083 0.8% 104,800 0.5%
----------- ---- ----------- ----
Income before income taxes............................... 7,486,044 23.7% 5,378,147 24.0%
Provision for income taxes............................... 2,815,491 8.9% 2,005,730 8.9%
----------- ---- ----------- ----
Net income....................................... $ 4,670,553 14.8% $ 3,372,417 15.1%
=========== ==== =========== ====
Basic earnings per common share.......................... $ 0.54 $ 0.41
=========== ===========
Diluted earnings per common share........................ $ 0.52 $ 0.39
=========== ============
See accompanying notes
5
GENTNER COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
March 31,
--------------------------
2001 2000
---- ----
Cash flows from operating activities:
Net income ............................................... $ 4,670,553 $ 3,372,417
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of property and equipment 779,268 559,742
Amortization of other assets .......................... 201,471 18,224
Changes in operating assets and liabilities:
Accounts receivable ................................ (1,911,924) (1,378,673)
Inventory .......................................... (1,391,820) (600,379)
Other current assets ............................... 151,999 (204,041)
Accounts payable and other accrued expenses ........ 901,802 508,929
Other ................................................. (22,497) --
------------ ------------
Net cash provided by operating activities ........ 3,378,852 2,276,219
Cash flows from investing activities:
Purchases of property and equipment ...................... (1,142,854) (1,006,440)
Purchase of business ..................................... (1,758,085) --
Repayment of note receivable ............................. 39,324 30,994
------------ ------------
Net cash used in investing activities ............ (2,861,615) (975,446)
Cash flows from financing activities:
Proceeds from issuance of common stock ................... 15,095 23,820
Exercise of employee stock options ....................... 322,329 285,718
Principal payments on capital lease obligations .......... (188,040) (159,704)
------------ ------------
Net cash provided by financing activities ........ 149,384 149,834
------------ ------------
Net increase in cash ........................................ 666,621 1,450,607
Cash at the beginning of the year ........................... 5,374,996 3,922,183
------------ ------------
Cash at the end of the period ............................... $ 6,041,617 $ 5,372,790
============ ============
Supplemental disclosure of cash flow information:
Income taxes paid ........................................ $(2,230,000) $(1,856,000)
Interest paid ............................................ $ (32,442) $ (51,650)
Consideration paid in stock for purchase of business ..... $(2,000,013) $ --
See accompanying notes
6
GENTNER COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2001
(Unaudited)
1. Basis of Presentation
During October 2000, the Company established Gentner Communications EuMEA GmbH,
a wholly owned subsidiary headquartered in Nuremberg, Germany. The subsidiary
began operations during December 2000. Gentner EuMEA will focus on distribution,
technical support, and training in Europe, the Middle East and northern Africa.
The subsidiary conducts its sales and prepares its financial statements in
German Deutsche Marks. Such financial statements are then translated into US
Dollars for consolidated financial statement presentation.
The Company is now providing consolidated financial statements that include
Gentner EuMEA. This practice commenced in the second quarter of fiscal 2001. All
intercompany transactions have been eliminated.
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q of Regulation S-K. Accordingly, certain
information and footnote disclosures normally included in complete financial
statements have been condensed or omitted. These financial statements should be
read in conjunction with the financial statements and footnotes thereto included
in the Company's 2000 Annual Report on Form 10-KSB.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
The results of operations for interim periods are not necessarily indicative of
the results of operations to be expected for the full year.
2. Earnings Per Common Share
The following table sets forth the computation of basic and diluted net income
per share:
Three months ended
March 31,
---------
2001 2000
---- ----
Numerator:
Net income ............................................................... $1,601,013 $1,240,255
========== ==========
Denominator:
Denominator for basic net income per share - weighted average shares ..... 8,610,375 8,300,841
Effect of dilutive securities using treasury stock method ................ 436,914 554,964
---------- ----------
9,047,289 8,855,805
========== ==========
Net income per share - basic ................................................. $ 0.19 $ 0.15
Net income per share - dilutive .............................................. $ 0.18 $ 0.14
Nine months ended
March 31,
---------
2001 2000
---- ----
Numerator:
Net income ............................................................... $4,670,553 $3,372,417
========== ==========
Denominator:
Denominator for basic net income per share - weighted average shares ..... 8,581,738 8,230,546
Effect of dilutive securities using treasury stock method ................ 444,444 502,735
---------- ----------
9,026,182 8,733,281
========== ==========
Net income per share - basic ................................................. $ 0.54 $ 0.41
Net income per share - dilutive .............................................. $ 0.52 $ 0.39
7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)
3. Comprehensive Income
As of July 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income." Comprehensive income for
the nine-month periods ended March 31, 2001 and 2000 was $4,670,781 and
$3,372,417, respectively.
4. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements and these accompanying
notes. Actual results could differ from those estimates.
5. Inventory
Inventory is summarized as follows:
(Unaudited) (Audited)
March 31, June 30,
2001 2000
---- ----
Raw Materials $ 2,758,523 $ 1,559,210
Work in progress 80,120 437,112
Finished Goods 2,337,255 1,488,670
----------- -----------
Total inventory $ 5,175,898 $ 3,484,992
=========== ===========
6. Stock Option Exercise
The following table shows the changes in stock options outstanding.
Weighted
Number Average
of Shares Exercise Price
--------- --------------
Options outstanding as of June 30, 2000............... 1,508,548 $ 7.01
Options granted....................................... 106,000 $ 13.58
Options exercised..................................... (5,650) $ 2.66
Options expired & canceled............................ (44,250) $ 9.02
--------- -------
Options outstanding as of September 30, 2000.......... 1,564,648 $ 7.42
Options granted....................................... 360,000 $ 12.61
Options exercised..................................... (31,050) $ 5.38
Options expired & canceled............................ (3,000) $ 2.66
---------- -------
Options outstanding as of December 31, 2000........... 1,890,598 $ 8.45
--------- -------
Options granted....................................... 59,000 $ 13.85
Options exercised..................................... (37,425) $ 3.75
Options expired & canceled............................ (215,625) $ 11.62
---------- -------
Options outstanding as of March 31, 2001.............. 1,696,548 $ 8.33
========= =======
8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)
7. Purchase of Business
In May 2000, the Company entered into an agreement to purchase substantially all
of the assets of ClearOne, Inc. ("ClearOne") for $3.4 million plus approximately
$300,000 in inventory, with a combination of cash and restricted stock. Under
the terms of the agreement, the Company issued 129,871 shares of common stock
valued at $15.40 and cash of $1,758,085. Goodwill resulting from the difference
between the purchase price plus acquisition costs and the net assets acquired,
including a non-compete agreement of $240,000, totaled approximately $2.8
million and is being amortized on a straight-line basis over fifteen years.
Gentner assumed the lease agreement on ClearOne office space in Woburn,
Massachusetts beginning in July 2000. The base monthly rent for this office
space is approximately $3,300 monthly. ClearOne was a privately held developer
and manufacturer of multimedia group communications products. On July 5, 2000,
the acquisition was consummated and was accounted for under the purchase method
of accounting.
The following pro forma combined financial information reflects operations as if
the acquisition of ClearOne had occurred as of July 1, 1999. The pro forma
combined financial information is presented for illustrative purposes only, does
not purport to be indicative of the Company's results of operations as of the
date hereof and is not indicative necessarily of what the Company's actual
results of operations would have been had the acquisition been consummated on
such date.
Three months ended
March 31,
---------
2001 2000
---- ----
Net revenue................................... $10,943,691 $ 7,912,848
=========== ===========
Net income.................................... $ 1,601,013 $ 1,060,390
=========== ===========
Net income per share - basic.................. $ 0.19 $ 0.13
Net income per share - dilutive............... $ 0.18 $ 0.12
Nine months ended
March 31,
---------
2001 2000
---- ----
Net revenue................................... $31,584,897 $22,791,418
=========== ===========
Net income.................................... $ 4,670,553 $ 2,979,517
=========== ===========
Net income per share - basic.................. $ 0.54 $ 0.36
Net income per share - dilutive............... $ 0.52 $ 0.34
8. Segment Reporting
The Company reports four different segments - Remote Facilities Management
(RFM)/Broadcast, Conferencing Products, Conferencing Services and Other. The
RFM/Broadcast segment consists of remote site control products which are
designed to monitor and control processes and equipment from a single source to
many locations. This segment also consists of telephone interface products which
are designed to facilitate the interface between regular telephone lines and the
broadcast world, allowing callers to speak live on radio and TV airwaves to
millions of listeners. The Conferencing Products segment consists of a full line
of room system conferencing products including installed and portable audio- and
videoconferencing products. The Conferencing Services segment includes
conference calling services, audio bridging, document conferencing services and
the addition of the professional services group, which provides consultation
services, meeting facilitation and web presentation services.
The accounting policies of the reportable segments are the same as those
described in the summary of significant accounting policies included within the
Company's Form 10-KSB for the year ended June 30, 2000. The Company evaluates
the performance of these business segments based upon a measure of gross profit
since general and administrative costs are not allocated to each segment.
The Company's reportable segments are strategic business units that offer
products and services to meet different customer needs. They are managed
separately because each segment requires focus and attention on their market and
distribution channel.
9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)
8. Segment Reporting - (continued)
The following table summarizes the segment information:
RFM/ Conferencing Conferencing Company
Broadcast Products Services All Other Totals
--------- -------- -------- --------- ------
Quarter Ended March 31, 2001:
- ----------------------------
Net sales $ 1,728,828 $ 5,921,941 $ 3,232,004 $ 60,918 $ 10,943,691
Cost of goods sold 699,046 2,168,394 1,697,645 18,518 4,583,603
---------- --------- --------- ------ ---------
Gross profit 1,029,782 3,753,547 1,534,359 42,400 6,360,088
Marketing and selling 136,473 1,213,282 648,147 844 1,998,746
Product development 53,304 690,511 743,815
General and administrative 1,133,525
---------
Total operating expenses 3,876,086
Operating profit 2,484,002
Other income (expense) 69,277
-----------
Income before income taxes 2,553,279
Provision for income taxes 952,266
----------
Net income $ 1,601,013
============
Quarter Ended March 31, 2000:
- ----------------------------
Net sales $ 1,802,155 $ 4,340,422 $ 1,667,139 $ 57,717 $ 7,867,433
Cost of goods sold 661,195 1,490,867 730,854 21,538 2,904,454
---------- --------- ---------- ------ ---------
Gross profit 1,140,960 2,849,555 936,285 36,179 4,962,979
Marketing and selling 261,973 1,032,111 514,472 (7) 1,808,549
Product development 154,816 281,766 436,582
General and administrative 779,953
----------
Total operating expenses 3,025,084
Operating profit 1,937,895
Other income (expense) 41,090
-----------
Income before income taxes 1,978,985
Provision for income taxes 738,730
----------
Net income $ 1,240,255
============
RFM/ Conferencing Conferencing Company
Broadcast Products Services All Other Totals
Year-to-Date At March 31, 2001:
Net sales $ 5,423,322 $ 17,718,710 $ 8,186,667 $ 256,198 $ 31,584,897
Cost of goods sold 2,176,416 6,401,860 4,204,162 80,384 12,862,822
--------- --------- --------- -------- ----------
Gross profit 3,246,906 11,316,850 3,982,505 175,814 18,722,075
Marketing and selling 463,338 3,636,993 1,890,698 3,048 5,994,077
Product development 201,147 1,662,312 1,863,459
General and administrative 3,630,578
-----------
Total operating expenses 11,488,114
Operating profit 7,233,961
Other income (expense) 252,083
----------
Income before income taxes 7,486,044
Provision for income taxes 2,815,491
---------
Net income $ 4,670,553
============
10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)
8. Segment Reporting - (continued)
Year-to-Date At March 31, 2000:
Net sales $ 5,660,327 $ 12,517,172 $ 3,921,480 $ 268,566 $ 22,367,545
Cost of goods sold 2,232,133 4,250,208 2,003,204 93,196 8,578,741
--------- --------- --------- -------- ---------
Gross profit 3,428,194 8,266,964 1,918,276 175,370 13,788,804
Marketing and selling 904,835 2,729,298 1,208,604 2,584 4,845,321
Product development 664,488 728,682 1,393,170
General and administrative 2,276,966
---------
Total operating expenses 8,515,457
Operating profit 5,273,347
Other income (expense) 104,800
----------
Income before income taxes 5,378,147
Provision for income taxes 2,005,730
---------
Net income $ 3,372,417
============
9. Subsequent Events
On April 12, 2001, the Company sold the assets of the remote control portion of
the RFM/Broadcast division to Burk Technology of Littleton, MA ("Burk"). Burk is
a privately-held developer and manufacturer of broadcast facility control
systems products. The Company retained the accounts payable of the remote
control portion of the RFM/Broadcast division. Burk assumed obligations for (i)
unfilled customer orders, and (ii) satisfying warranty obligations to both
existing customers of the Company, and for inventory sold to Burk.
The assets of the remote control portion of the RFM/Broadcast division were sold
to Burk for $3.2 million, including $750,000 at closing, and $1.75 million in
the form of a seven (7) year promissory note, with interest at the rate of nine
percent (9%), secured by a subordinate security interest in the personal
property of Burk. In addition, up to $700,000 is payable as a commission over a
period of up to seven years. The Company will account for the sale of these
assets under the purchase method of accounting, realizing a gain on the sale of
approximately $2.9 million.
During April 2001, the Company announced that its board of directors had
approved a stock repurchase program to purchase up to 500,000 shares of the
Company's common stock over the next six months. Purchases will be made on the
open market or in private transactions.
11
Item 2. Management's Discussion and Analysis of Plan of Operation
- -----------------------------------------------------------------
General
The Company develops, manufactures, markets, and distributes products and
services for the broadcast and conferencing markets. The Company reports four
different segments - Remote Facilities Management (RFM)/Broadcast, Conferencing
Products, Conferencing Services and Other. The Company has applied its core
digital technology to the development of products for small, medium and large
conferencing venues, as well as assistive listening markets. The following
discussion should be read in conjunction with financial statements included in
this Form 10-Q as well as the Management's Discussion and Analysis of Plan of
Operation and the financial statements contained in the Company's Form 10-KSB
for fiscal year ended June 30, 2000.
Results of Operations
Sales for the three-month period ended March 31, 2001 increased 39 percent to
$10.9 million from $7.9 million compared to the three-month period ended March
31, 2000. For the nine-month period ended March 31, 2001, sales increased 41
percent to $31.6 million from $22.4 million compared to the nine-month period
ended March 31, 2000. This increase is mainly due to the strong growth in sales
of conferencing products and conferencing services, as discussed below.
Conferencing Products experienced a 36 percent sales growth when comparing the
third quarter of fiscal 2001 to the same quarter of fiscal 2000, from $4.3
million to $5.9 million. Sales in Conferencing Products increased 42 percent,
from $12.5 million to $17.7 million, comparing the first nine months of this
fiscal year to the first nine months of last fiscal year. This increase was
mainly due to the continued success of the Audio Perfect(R) product line, as
well as the introduction of new products, including the GT1524. The Audio
Perfect(R) product line, which began shipping in April of 1998, includes the
AP800, the AP10, the AP400, AP Tools, the AP IR Remote, and the APV200 IP. The
Company also realized more revenue associated with a room installation as a
result of the expanded product lines. During the third quarter of fiscal 2000,
the Company started shipping the PA870 power amplifier. During the second
quarter of fiscal 2001, the Company began shipping the PSR1212 digital matrix
mixer.
Conferencing Services, the conference calling portion which is known as 1-800
LETS MEET(R), experienced sales growth of 94 percent in the third quarter, with
$3.2 million in revenues for the third quarter of fiscal 2001 compared to $1.7
million for the same quarter of fiscal 2000. Conferencing Services increased 109
percent for this fiscal year-to-date with $8.2 million in revenues for the first
nine months of fiscal 2001 compared to $3.9 million for the first nine months of
fiscal 2000. Over the past year, the Company has expanded its service offerings
to include on-demand, reservationless conference calling, and Webconferencing.
The Company attributes this growth in sales to an increased customer base due in
part to the Company's increase in sales staff for marketing conference calling
services as well as the overall market growth over the last year for such
services. The Company's conference calling service is being marketed not only to
corporate clients but also to long distance telephone service providers for
resale.
RFM/Broadcast sales decreased four percent in the third quarter of this fiscal
year to $1.7 million from $1.8 million in the same quarter of last fiscal year.
RFM/Broadcast sales decreased four percent in the first nine months of fiscal
2001 to $5.4 million from $5.7 million in the same period of last fiscal year.
RFM/Broadcast consists of two product lines, Telephone Interface and Remote
Facilities Management (RFM, formerly known as Remote Site Control). Sales of the
Telephone Interface line decreased three percent during the third quarter of
this fiscal year compared to the same quarter of last year and decreased 11
percent during the first nine months of this fiscal year compared to the same
period of last fiscal year. RFM decreased five percent in the third quarter of
this fiscal year when compared to the same quarter last year and increased seven
percent in the first nine months of this fiscal year when compared to the same
period of last fiscal year, mainly due to increased sales of the GSC3000 during
second quarter of fiscal 2001. Also contributing to this increase is sales of
the VRC2500, which began shipping in the first quarter of fiscal 2001. Following
the fiscal 2001 third quarter, the Company sold the assets comprising the
Company's remote control portion of the RFM/Broadcast operations, as described
in footnote 9 of the financial statements filed with this Form 10-Q. The Company
retained the assets of the Telephone Interface portion of this division.
Other sales increased six percent in the third quarter of this fiscal year with
revenues of $60,918 compared to $57,717 for the same quarter of last fiscal
year. Other sales decreased five percent for the first nine months of this
fiscal year with revenues of $256,198 compared to $268,566 for the same period
of fiscal 2000. In general, the Company is not promoting Other Products, and
those sales are expected to continue to decrease.
During the third quarter of fiscal 2001, the Company implemented a blanket
purchase order program for the Company's dealers and premier dealers. This
program offers higher discounts for orders placed by these dealers for their
product needs over a twelve-month period. This program may allow the Company to
better predict its manufacturing schedule, expense levels and net revenues.
12
The Company's gross profit margin percentage was 58.1 percent for the third
quarter of fiscal 2001 and 63.1 percent for the same quarter last year. Gross
profit margin percentage was 59.3 percent for the first nine months of fiscal
2001 and 61.6 percent for the same nine-month period last year. This decrease
was primarily due to the increase in the pricing of select core components used
in Company products and the increase in service revenues which generally have
lower margins. Also contributing to the decrease is greater dealer margins
offered under the new blanket purchase order program.
The Company believes that most of the key components required for the production
of its products are currently available in sufficient quantities. The Company
has experienced long component lead times in the past, but is starting to see
moderating lead times on many products. Even though the Company has purchased
more of these "longer-lead-time" parts to ensure continued delivery of products,
reduction in these inventories will track the reduction of lead times with an
undetermined lag time. The Company also continues to focus on locating other
sources for raw materials and enhancing vendor relationships to further ensure
adequate materials.
The Company's operating expenses increased 28.1 percent when comparing the third
quarter of this fiscal year compared to the same quarter of last fiscal year and
34.9 percent when comparing the first nine months of this fiscal year compared
to the same period of last fiscal year. The most significant portion of these
increases came in general and administrative expenses, as discussed below.
Marketing and selling expenses for the third quarter of fiscal 2001 increased 11
percent from the third quarter of last fiscal year. Marketing and selling
expenses decreased as a percent of revenue from 23.0 percent in the third
quarter of fiscal 2000 to 18.3 percent in the third quarter of fiscal 2001.
Year-to-date marketing and selling expenses increased 24 percent compared to the
same period last fiscal year, although market and selling expenses decreased as
a percentage of revenue from 21.7 percent for the first nine months of fiscal
2000 to 19.0 percent for the same period of fiscal 2001 as a percent of revenue.
The increase in dollars was primarily due to higher commission expense resulting
from the increase in sales. Also contributing to the increase was shelving
expenses with respect to the retail market.
Product development costs increased 70 percent in the third quarter of fiscal
2001 as compared to the third quarter of fiscal 2000, and increased as a percent
of revenue from 5.6 percent in the third quarter of fiscal 2000 to 6.8 percent
in the third quarter of fiscal 2001. Year-to-date product development expenses
increased 34 percent for the nine months ended March 31, 2001 as compared to the
same period of fiscal 2000, but decreased as a percent of revenue from 6.2
percent in the first nine months of fiscal 2000 to 5.9 percent in the first nine
months of fiscal 2001. The increase in absolute dollars was primarily due to new
product development and higher salary expenses.
General and administrative expenses increased 45 percent in the third quarter of
fiscal 2001 as compared to the third quarter in the previous fiscal year, while
expenses increased as a percent of revenue from 9.9 percent in the third quarter
of fiscal 2000 to 10.3 percent in the third quarter of fiscal 2001. Year-to-date
general and administrative expenses increased 59 percent in the first nine
months of fiscal 2001 as compared to the first nine months of the previous
fiscal year, while expenses increased as of percent of revenue from 10.2 percent
in the first nine months of fiscal 2000 to 11.5 percent in the first nine months
of fiscal 2001. This increase in absolute dollars was mainly due to a one-time
bad debt write off of $398,453 with respect to a single customer who filed
bankruptcy during the second quarter. Also associated with this increase were
the costs incurred in hiring personnel to support increased sales volume and the
infrastructure costs associated with the hiring of such new personnel, as well
as costs associated with the Company's Woburn, MA office and the amortization
expense associated with the goodwill purchased in the ClearOne acquisition.
Interest income increased 69 percent when comparing the third quarter of fiscal
2001 to the third quarter of fiscal 2000. Interest income increased 74 percent
when comparing the first nine months of 2001 to the same period of fiscal 2000.
The increase is due to the increase in cash and cash equivalents.
Interest expense decreased 43 percent when comparing the third quarter of fiscal
2001 to the third quarter of fiscal 2000. Interest expense decreased 37 percent
when comparing the first nine months of fiscal 2001 to the first nine months of
fiscal 2000 due to the maturing of certain of the Company's leases.
During the third quarter of fiscal 2001, income tax expense was calculated at a
combined federal and state tax rate of 37.3 percent, resulting in a tax expense
of $952,300, compared to 37.3 percent and $738,700 in the third quarter of
fiscal 2000. Year-to-date income tax expense was calculated at a combined
federal and state tax rate of 37.6 percent, resulting in a tax expense of
$2,815,500, compared to 37.3 percent and $2,005,700 in the first nine months of
fiscal 2000.
Net income increased 29 percent the third quarter of this fiscal year as
compared to the third quarter in the previous year. Net income increased 38
percent the first nine months of this fiscal year as compared to the nine months
in the previous year. These increases reflect the favorable operating results
offset by the increase in certain expenses, all as described above.
13
Financial Condition and Liquidity
The Company had cash and cash equivalents of $6.0 million and $5.4 million at
March 31, 2001 and June 30, 2000, respectively, an increase of $670,000. Net
operating activities provided cash of $3.4 million in the first nine months of
fiscal 2001, primarily due to profitable operations, as well as increased
amortization and depreciation expense which was offset by increased inventory as
discussed above. Net investing activities used cash of $2.9 million primarily
due to the purchase of the assets of ClearOne and the purchase of assets for
development of the Company's infrastructure. Net cash provided by financing
activities was $149,000.
The Company has an available revolving line of credit of $5.0 million, which is
secured by the Company's accounts receivable and inventory. The interest rate on
the line of credit is variable (250 basis points over the London Interbank
Offered Rate (LIBOR) or prime less 0.25 percent, whichever the Company chooses).
The borrowing rate was 7.0 percent at March 31, 2001. There was no outstanding
balance on March 31, 2001. The line of credit was renewed as of December 22,
2000 and will expire on December 22, 2001. Borrowings under the line of credit
are subject to certain financial and operating covenants. The Company was in
compliance with the covenants at March 31, 2001.
During April 2001, the Company announced that its board of directors had
approved a stock repurchase program to purchase up to 500,000 shares of the
Company's common stock over the next six months. Purchases will be made on the
open market or in private transactions.
Management believes that the Company's working capital, bank line of credit and
cash flow from operating activities will be sufficient to meet the Company's
operating and capital expenditures requirements for the next twelve months. In
the longer term, or if the Company experiences a decline in revenue, or in the
event of other unforeseen events, the Company may require additional funds and
may seek to raise such funds through public or private equity or debt financing,
bank lines of credit, or other sources. No assurance can be given that
additional financing will be available or, if available will be on terms
favorable to the Company. See "Factors that May Affect Future Results - Limited
Capitalization."
Factors that May Affect Future Results
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended.
Forward-looking statements relate to the Company's future plans, objectives,
expectations, and intentions. These statements may be recognized by the use of
words such as "believes," "expects," "may," "will," "intends," "plans,"
"should," "seeks," "anticipates," and similar expressions. In particular,
statements regarding the Company's markets and market share, demand for its
products and services, FCC actions, manufacturing capacity and component
availability, and the development and introduction of new products and services
are forward-looking statements and subject to material risks. Actual results
could differ markedly from those projected in the forward-looking statements as
a result of the factors set forth below and the matters set forth in the report
generally, as well as the factors set forth in the Company's reports filed with
the Securities and Exchange Commission including the Form 10-KSB filed for the
year ended June 30, 2000. The Company cautions the reader, however, that this
list of factors may not be exhaustive, particularly with respect to future
factors. Any forward-looking statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only as of the date
made.
Rapid Technological Change
The RFM/Broadcast, conferencing products, conferencing services, and other
product markets are highly competitive and characterized by rapid technological
change. The Company's future performance will depend in large part upon its
ability to remain competitive and to develop and market new products and
services in these markets in a timely fashion that responds to customers' needs
and incorporates new technology and standards.
The Company may not be able to design and manufacture products that address
customer needs or achieve market acceptance. Any significant failure to design,
manufacture, and successfully introduce new products could materially harm the
Company's business.
The markets in which the Company competes have historically involved the
introduction of new and technologically advanced products and services that cost
less or perform better. If the Company is not competitive in its research and
development efforts, its products may become obsolete or be priced above
competitive levels.
Although management believes that, based on their performance and price, its
products are currently attractive to customers, there can be no assurance that
competitors will not introduce comparable or technologically superior products
which are priced more favorably than the Company's products.
14
Competition
The markets for the Company's products and services are highly competitive.
These markets include the Company's traditional dealer channel, the market for
its conferencing services, and the retail channel. The Company competes with
businesses having substantially greater financial, research and development,
manufacturing, marketing, and other resources. If the Company fails to maintain
or enhance its competitive position, it could experience pricing pressures and
reduced sales, margin, profits, and market share, each of which could materially
harm the Company.
Marketing
The Company is subject to the risks inherent in the marketing and sale of
current and new products and services in an evolving marketplace. The Company
must effectively allocate its resources to the marketing and sale of these
products through diverse channels of distribution. The Company's current
strategy is to establish distribution channels and direct selling efforts in
markets where it believes there is a growing need for its products and services.
For example, with the acquisition of the ClearOne assets the Company has
expanded its products to include the retail market. There can be no assurance
that this strategy will prove successful.
Difficulties in Managing Growth
The Company is experiencing a period of significant expansion in personnel,
facilities and infrastructure, and management anticipates that further expansion
will be required to address potential growth in our customer base and market
opportunities. This expansion will require continued application of management,
operational and financial resources
To manage the expected growth of operations and personnel, the Company may need
to improve its transaction processing, operational and financial systems,
procedures and controls. The Company's current and planned personnel, systems,
procedures and controls may not be adequate to support our future operations.
Difficulties in managing these challenges could adversely affect the Company's
financial performance.
Difficulties in Estimating Customer Demand Could Harm Our Operating Results
Orders from our resellers are based on demand from end-users. Prospective
end-user demand is difficult to measure. This means that any period could be
adversely impacted by lower end-user demand, which could in turn negatively
affect orders we receive from our resellers. Our expectations for both short-
and long-term future net revenues are based on our own estimate of future demand
as well as backlog based on the blanket purchase order program, as discussed
above. We also base expense levels on those revenue estimates.
Dependence on Distribution Network
The Company markets its products primarily through a network of representatives,
dealers, and master distributors. All of the Company's agreements retaining such
representatives and dealers are non-exclusive and terminable at will by either
party. Although the Company believes that its relationships with such
representatives and dealers are good, there can be no assurance that any or all
such representatives or dealers will continue to offer the Company's products.
Price discounts to the Company's distribution market are based on performance.
However, there are no obligations on the part of such representatives and
dealers to provide any specified level of support to the Company's products or
to devote any specific time, resources or efforts to the marketing of the
Company's products. There are no prohibitions on dealers offering products that
are competitive with those of the Company. Most dealers do offer competitive
products. The Company reserves the right to maintain house accounts which are
for products sold directly to customers. The loss of representatives or dealers
could have a material adverse effect on the Company's business.
Limited Capitalization
As of March 31, 2001, the Company had $6.0 million in cash and $15.3 million in
working capital. The Company may be required to seek additional financing if
anticipated levels of revenue are not realized, if higher than anticipated costs
are incurred in the development, manufacture, or marketing of the Company's
products, or if product demand exceeds expected levels. There can be no
assurance that any additional financing thereby necessitated will be available
on acceptable terms, or at all.
In addition, the Company's $5 million revolving line of credit matures in
December of 2001 and there can be no assurance that the Company will be able to
extend the maturity date of the line of credit or obtain a replacement line of
credit from another commercial institution. The Company had no outstanding
balance payable on the line of credit as of March 31, 2001. To the extent the
15
line of credit is not extended or replaced and cash from operations is
insufficient to fund operations, the Company may be required to seek additional
financing.
Telecommunications and Information Systems Network
The Company is highly reliant on its network equipment, telecommunications
providers, data, and software, to support all functions of the Company. The
Company's conference calling service relies 100 percent on the network for its
revenues. While the Company endeavors to provide for failures in the network by
providing back-up systems and procedures, there is no guarantee that these
back-up systems and procedures will operate satisfactorily in an emergency.
Should the Company experience such a failure, it could seriously jeopardize its
ability to continue operations. In particular, should the Company's conference
calling service experience even a short term interruption of its network or
telecommunication providers, its ongoing customers may choose a different
provider, and its reputation may be damaged, reducing its attractiveness to new
customers.
Dependence on Supplier and Single Source of Supply
The Company does not typically have written contracts with any of its suppliers.
Furthermore, certain electronic components used in connection with the Company's
products can only be obtained from single manufacturers and the Company is
dependent upon the ability of these manufacturers to deliver such components to
the Company's suppliers so that they can meet the Company's delivery schedules.
The Company does not have a written commitment from such suppliers to fulfill
the Company's future requirements. The Company's suppliers maintain an inventory
of such components, but there can be no assurance that such components will
always be readily available, available at reasonable prices, available in
sufficient quantities, or deliverable in a timely fashion. If such key
components become unavailable, it is likely that the Company will experience
delays, which could be significant, in production and delivery of its products
unless and until the Company can otherwise procure the required component or
components at competitive prices, if at all. The lack of availability of these
components could have a materially adverse effect on the Company.
The Company believes that most of the key components required for the production
of its products are currently available in sufficient quantities. The Company
has experienced long component lead times in the past, but is starting to see
moderating lead times on many products. Even though the Company has purchased
more of these "longer-lead-time" parts to ensure continued delivery of products,
reduction in these inventories will track the reduction of lead times with an
undetermined lag time. Furthermore, suppliers of some of these components are
currently or may become competitors of the Company, which might also affect the
availability of key components to the Company. It is possible that other
components required in the future may necessitate custom fabrication in
accordance with specifications developed or to be developed by the Company.
Also, in the event the Company or any of the manufacturers whose products the
Company expects to utilize in the manufacture of its products, is unable to
develop or acquire components in a timely fashion, the Company's ability to
achieve production yields, revenues and net income may be adversely affected.
Software Risks
The Company has developed custom software for its products and has licensed
additional software from third parties. This software may contain undetected
errors, defects or bugs. Although the Company has not suffered significant harm
from any errors or defects to date, the Company may discover significant errors
or defects in the future that the Company may or may not be able to fix or fix
in a timely or cost effective manner. The Company's inability to do so could
harm its business.
Manufacturing Process Risks
While the Company has substantial experience in designing and manufacturing its
products, the Company may still experience technical difficulties and delays
with the manufacturing of our products. Potential difficulties in the design and
manufacturing process that could be experienced by us include difficulty in
meeting required specifications, difficulty in achieving necessary manufacturing
efficiencies, and difficulties in obtaining materials on a timely basis.
Reliance on Efficiency of Distribution and Third Parties
The Company's financial performance is dependent in part on its ability to
provide prompt, accurate, and complete services to customers on a timely and
competitive basis. Delays in distribution in the Company's day-to-day operations
or material increases in the Company's costs of procuring and delivering
products could have an adverse effect on the Company's results of operations.
Any failure of either the Company's computer operating systems, the Internet or
the Company's telephone system could adversely affect the Company's ability to
receive and process customers' orders and ship products on a timely basis.
Strikes or other service interruptions affecting Federal Express Corporation,
United Parcel Service of America, Inc., or other common carriers used by the
16
Company to receive necessary components or other materials or to ship the
Company's products also could impair its ability to deliver products on a timely
and cost-effective basis.
Lack of Patent Protection
The Company currently relies on a combination of trade secret and nondisclosure
agreements to establish and protect its proprietary rights in its products.
There can be no assurance that others will not independently develop similar
technologies, or duplicate or design around aspects of the Company's technology.
The Company believes that its products and other proprietary rights do not
infringe any proprietary rights of third parties. There can be no assurance,
however, that third parties will not assert infringement claims in the future.
Such claims could divert management's attention and be expensive, regardless of
their merit. The Company might be required to license third party technology or
redesign its products, which may not be possible or economically feasible.
Government Funding and Regulation
In the conferencing market, the Company is dependent on government funding to
place its distance learning sales and courtroom equipment sales. In the event
government funding was stopped, these sales would be negatively impacted.
Additionally, many of the Company's products are subject to governmental
regulations. New regulations could significantly adversely impact sales.
Dividends Unlikely
The Company has never paid cash dividends on its securities and does not intend
to declare or pay cash dividends in the foreseeable future. Earnings are
expected to be retained to finance and expand its business. Furthermore, the
Company's revolving line of credit prohibits the payment of dividends on its
Common Stock.
Potential Dilutive Effect of Outstanding Options and Possible Negative Effect of
Future Financing
The Company has outstanding options issued under the Company's 1990 Incentive
Plan and the 1998 Stock Option Plan, which include options to purchase up to
3,200,000 shares of Common Stock granted or available for grant. As of March 31,
2001, the Plans have 1,696,548 options outstanding. Holders of these options are
given an opportunity to profit from a rise in the market price of the Company's
Common Stock with a resulting dilution in the interests of the other
stockholders. The holders of the options may exercise them at a time when the
Company might be able to obtain additional capital through a new offering of
securities on terms more favorable than those provided therein.
Dependence Upon Key Employees
The Company is substantially dependent upon certain of its employees, including
Frances M. Flood, President and Chief Executive Officer and a director and
shareholder of the Company. The loss of Ms. Flood by the Company could have a
material adverse effect on the Company. The Company currently has in place a key
person life insurance policy on the life of Ms. Flood in the amount of
$3,000,000.
Possible Control by Officers and Directors
The officers and directors of the Company together had beneficial ownership of
approximately 26.4 percent of the Company's Common Stock (including options that
are currently exercisable or exercisable within sixty (60) days) as of May 1,
2001. This significant holding in the aggregate places the officers and
directors in a position, when acting together, to effectively control the
Company and could delay or prevent a change in control.
Collectability of Outstanding Receivables
The Company grants credit without requiring collateral to substantially all of
its customers. Although the possibility of a large percentage of customers
defaulting exists, the Company believes this scenario to be highly unlikely.
International Sales and Related Risks
International sales represent a significant portion of the Company's total
revenue. For example, international sales represented 13 percent of the
Company's total sales for the third quarter of fiscal 2001 and 15 percent for
the first nine months of fiscal 2001. If the Company is unable to maintain
international market demand, its results of operations could be materially
harmed. The Company's international business is subject to the financial and
operating risks of conducting business internationally, including: unexpected
changes in, or imposition of, legislative or regulatory requirements;
fluctuating exchange rates, tariffs and other barriers; difficulties in staffing
17
and managing foreign subsidiary operations; export restrictions; greater
difficulties in accounts receivable collection and longer payment cycles;
potentially adverse tax consequences; and potential hostilities and changes in
diplomatic and trade relationships.
During October 2000, the Company established Gentner Communications EuMEA GmbH,
a wholly owned subsidiary headquartered in Nuremberg, Germany. The subsidiary
began operations during December 2000. Gentner EuMEA will focus on distribution,
technical support, and training in Europe, the Middle East and northern Africa.
Except for sales by Gentner EuMEA, which are denominated in German Deutsche
Marks, the Company's sales in the international market are denominated in U.S.
Dollars. Consolidation of Gentner EuMEA's financial statements with those of the
Company requires translation to U.S. Dollars. That translation is subject to
exchange rate risks.
Integration of Acquired Business
The Company has dedicated and will continue to dedicate, substantial management
resources in order to achieve the anticipated operating efficiencies from
integrating ClearOne. Difficulties encountered in integrating ClearOne's
operations could adversely impact the business, results of operations or
financial condition of the Company. Also, the Company intends to pursue
acquisition opportunities in the future. The integration of acquired businesses
could require substantial management resources. There can be no assurance that
any such integration will be accomplished without having a short or potentially
long-term adverse impact on the business, results of operations or financial
condition of the Company or that the benefits expected from any such integration
will be fully realized.
New Accounting Pronouncements
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) 101, "Revenue Recognition in Financial Statements." The effective
date of SAB 101 is the fourth quarter of fiscal years beginning after December
15, 1999. This SAB clarifies proper methods of revenue recognition given certain
circumstances surrounding sales transactions. The Company continues to evaluate
the impact of SAB 101, but believes it is in compliance with the provisions of
the SAB and accordingly, does not expect SAB 101 to have a material effect on
its financial statements.
In 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which was
subsequently amended by SFAS No. 137 "Accounting for Derivative Financial
Instruments and Hedging Activities - Deferral of the Effective Date of SFAS No.
133" and SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain
Hedging Activities." SFAS No. 133 establishes accounting and reporting standards
requiring that every derivative instrument, including certain derivative
instruments embedded in other contracts, be recorded in the balance sheet as
either an asset or liability measured at its fair value. The statement also
requires that changes in the derivative's fair value be recognized in earnings
unless specific hedge accounting criteria are met. SFAS No. 133, as amended by
SFAS No. 137 and SFAS No. 138, is effective for all fiscal years beginning after
June 15, 2000. The Company does not expect the adoption of SFAS No. 133 to have
a material impact on the Company's financial condition or results of operations.
Item 3. Qualitative and Quantitative Disclosures About Market Risk
- -------------------------------------------------------------------
In 1997, the SEC issued new rules (Item 305 of Regulation S-K) which require
disclosure of material risks as defined by Item 305, related to market risk
sensitive financial instruments. As defined, the Company currently has only
limited market risk sensitive instruments related to interest rates. The Company
has outstanding capital leases of $267,000 at March 31, 2001.
The Company does not have significant exposure to changing interest rates on
these capital leases because interest rates for the majority of the capital
leases are fixed. The Company has not undertaken any additional actions to cover
interest rate market risk and is not a party to any other interest rate market
risk management activities.
A hypothetical 10 percent change in market interest rates over the next year
would not impact the Company's earnings or cash flows as the interest rates on
the majority of the capital leases are fixed.
The Company does not purchase or hold any derivative financial instruments for
trading purposes.
18
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 10-Q
- ------------------------------------------
(a) Exhibits
------------
EXHIBIT
NUMBER DESCRIPTION
3.1 1 Articles of Incorporation and all amendments thereto through
March 1, 1988. (Page 10) (incorporated by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1989)
3.2 1 Amendment to Articles of Incorporation, dated July 1, 1991. (Page
65) (incorporated by reference from the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 1991)
3.3 1 Bylaws, as amended on August 24, 1993. (Page 16) (incorporated by
reference from the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1993)
1 Denotes exhibits specifically incorporated into this Form 10-Q by
reference, pursuant to Regulation S-K, Item 10. These documents are located
under File No. 0-17219 and are located at the Securities and Exchange
Commission, Public Reference Branch, 450 South 5th St., N.W., Washington,
DC 20549.
(b) Reports on Form 8-K
-----------------------
There were no reports on Form 8-K filed during the period covered by this
report.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENTNER COMMUNICATIONS CORPORATION
/s/ Susie Strohm
---------------------------------------------
Susie Strohm
Vice President, Finance
Date: May 10, 2001
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