UNITED STATES
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 September 30, 2004
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 1-7708
MARLTON TECHNOLOGIES, INC.
(Exact name of issuer as specified in its charter)
Pennsylvania 22-1825970
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2828 Charter Road Philadelphia PA 19154
(Address of principal executive offices) City State Zip
Issuer's telephone number (215) 676-6900
Former name, former address and former fiscal year, if changed since last
report: __________
Check whether the issuer (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 |_|
Indicate by check mark whether the issuer is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15 (d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by court.
Yes |_| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares outstanding of
each of the issuer's classes of common stock as of the last practicable date:
12,844,696
Item 1. FINANCIAL STATEMENTS
MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands except share and per share data)
September 30, December 31,
ASSETS 2004 2003
------------- ------------
Current:
Cash and cash equivalents $ 527 $ 241
Accounts receivable, net of allowance
of $438 and $415, respectively 11,844 7,824
Inventories 6,349 6,272
Prepaid and other current assets 1,007 1,191
-------- --------
Total current assets 19,727 15,528
Property and equipment, net of accumulated
depreciation of $11,134 and $10,106, respectively 2,585 3,240
Rental assets, net of accumulated depreciation
of $4,063 and $3,672, respectively 2,864 2,789
Goodwill 2,714 2,714
Other assets, net of accumulated amortization
of $1,729 and $1,603, respectively 201 388
Notes receivable 107 159
-------- --------
Total assets $ 28,198 $ 24,818
======== ========
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Current portion of long-term debt $ 79 $ 89
Accounts payable 6,292 6,363
Accrued expenses and other current liabilities 5,884 6,080
-------- --------
Total current liabilities 12,255 12,532
-------- --------
Long-term liabilities:
Long-term debt, net of current portion 7,577 5,146
-------- --------
Total long-term liabilities 7,577 5,146
-------- --------
Total liabilities 19,832 17,678
-------- --------
Commitments and contingencies -- --
Stockholders equity:
Preferred stock, no par value - shares authorized
10,000,000; no shares issued or outstanding -- --
Common stock, no par value - shares authorized 50,000,000;
12,844,696 outstanding at September 30, 2004 and December 31, 2003 -- --
Stock warrants 742 742
Additional paid-in capital 32,951 32,951
Accumulated deficit (25,179) (26,405)
-------- --------
8,514 7,288
Less cost of 148,803 treasury shares (148) (148)
-------- --------
Total stockholders equity 8,366 7,140
-------- --------
Total liabilities and stockholders equity $ 28,198 $ 24,818
======== ========
The accompanying notes and the notes to the consolidated financial
statements included in the Registrant's Annual Report on Form 10-K are an
integral part of these financial statements.
2
MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands except per share data)
For the three months ended For the nine months ended
September 30, September 30, September 30, September 30,
2004 2003 2004 2003
------------- ------------- ------------- -------------
Sales $ 16,796 $ 12,626 $ 55,901 $ 49,946
Cost of sales 13,462 10,400 43,574 38,711
-------- -------- -------- --------
Gross profit 3,334 2,226 12,327 11,235
Selling expenses 1,889 1,818 6,044 6,353
Administrative and general expenses 1,524 1,627 4,726 5,288
Restructuring and other expenses -- 1,114 -- 1,114
-------- -------- -------- --------
Operating profit (loss) (79) (2,333) 1,557 (1,520)
Other income (expense):
Interest income and other income -- 22 -- 31
Interest expense (156) (58) (381) (169)
Income from investments in affiliates 50 20 50 20
-------- -------- -------- --------
Income (loss) before income taxes (185) (2,349) 1,226 (1,638)
Benefit from income taxes -- (433) -- (433)
-------- -------- -------- --------
Net income (loss) (185) (1,916) 1,226 (1,205)
======== ======== ======== ========
Net income (loss) per common share:
Basic $ (0.01) $ (0.15) $ 0.10 $ (0.09)
======== ======== ======== ========
Diluted $ (0.01) $ (0.15) $ 0.09 $ (0.09)
======== ======== ======== ========
The accompanying notes and the notes in the consolidated financial
statements included in the Registrant's Annual Report on Form 10-K are an
integral part of these financial statements.
3
MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
For the nine months
ended September 30,
2004 2003
------- -------
Cash flows from operating activities:
Net income (loss) $ 1,226 $(1,205)
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Depreciation and amortization 1,546 1,486
Income from investments in affiliates (50) (20)
Change in assets and liabilities:
(Increase) decrease in accounts receivable, net (4,020) 1,092
(Increase) in inventories (77) (643)
(Increase) decrease in prepaid and other current assets 184 (627)
(Increase) decrease in notes and other receivables 246 (221)
Decrease in accounts payable, accrued expenses
and other current liabilities (267) (760)
------- -------
Net cash used in operating activities (1,212) (898)
------- -------
Cash flows from investing activities:
Capital expenditures (840) (620)
Proceeds from sale of stock in affiliate 50 --
Acqusition of business, net of cash acquired -- (384)
------- -------
Net cash used in investing activities (790) (1,004)
------- -------
Cash flows from financing activities:
Proceeds from revolving credit facility, net 2,511 1,500
Payments for acquisition obligation (163) --
Payments for leasehold improvement obligation (34) --
Proceeds from capital lease obligation 107 --
Payments for loan origination fees (133) (50)
Payments for promissory note -- (113)
------- -------
Net cash provided by financing activities 2,288 1,337
------- -------
Increase (decrease) in cash and cash equivalents 286 (565)
Cash and cash equivalents - beginning of period 241 880
------- -------
Cash and cash equivalents - end of period $ 527 $ 315
======= =======
The accompanying notes and the notes in the consolidated financial
statements included in the Registrant's Annual Report on Form 10-K are an
integral part of these financial statements.
4
MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION:
The consolidated financial statements included herein are unaudited and have
been prepared in accordance with Securities and Exchange Commission regulations.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. In the
opinion of management, the financial statements reflect all adjustments (of a
normal and recurring nature), which are necessary to present fairly the
financial position, results of operations and cash flows for the interim
periods. Operating results for the quarter and nine month periods are not
necessarily indicative of the results that may be expected for the full year or
for future periods. These financial statements should be read in conjunction
with the Form 10-K for the year ended December 31, 2003.
2. ACQUISITION AND RESTRUCTURING COSTS:
On August 1, 2003, a Company subsidiary acquired the assets of Exhibit Crafts,
Inc., a Los Angeles, CA area manufacturer of trade show exhibits and a 20%
interest in International Exposition Services, Inc., (IES), a trade show
shipping and installation provider. The initial purchase price was $694,000,
including the assumption of certain liabilities totaling $310,000. In addition,
the sellers received 20% of the subsidiary's common stock. The purchase price
approximated the fair value of the net assets acquired. In addition, the asset
purchase agreement provides for contingent payments of up to $750,000 based on
operating performance in 2004, 2005 and 2006. The Company relocated its San
Diego area manufacturing facility to the acquired Los Angeles, CA area facility
during the third quarter of 2003. Costs recorded in the third quarter of 2003 in
connection with this relocation and consolidation were $1.1 million, which
included relocation and employee termination expenses and the Company recorded a
charge for a portion of the remaining lease obligation related to the vacated
San Diego area facility.
3. MAJOR CUSTOMERS AND CONCENTRATIONS:
During the first nine months of 2004 and 2003, one customer accounted for 11.3%
and 17.9%, respectively, of the Company's total sales. This customer accounted
for 12% of total accounts receivable at September 30, 2004.
4. PER SHARE DATA:
The following table sets forth the computation of basic and diluted net income
per common share (in thousands except per share data):
Three months ended Nine months ended
------------------ -----------------
September September September September
30, 2004 30, 2003 30, 2004 30, 2003
-------- -------- -------- --------
Net income (loss) $ (185) $ (1,916) $ 1,226 $ (1,205)
======== ======== ======== ========
Weighted average common
shares outstanding used to compute
basic net income per common share 12,845 12,845 12,845 12,845
Additional common shares to be issued
assuming the exercise of stock options,
net of shares assumed reacquired -- -- 1,174 --
-------- -------- -------- --------
Total shares used to compute diluted
net income per common share 12,845 12,845 14,019 12,845
======== ======== ======== ========
Basic net income (loss) per share $ (.01) $ (.15) $ .10 $ (.09)
======== ======== ======== ========
Diluted net income (loss) per share $ (.01) $ (.15) $ .09 $ (.09)
======== ======== ======== ========
5
MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Excluded in the computation of diluted income per common share were outstanding
options and warrants to purchase 333,000 shares of common stock at September 30,
2004 and 336,000 shares of common stock at September 30, 2003 because the option
and warrant exercise prices were greater than the market price of the common
shares. Also excluded in the computation of diluted income per common share were
outstanding options and warrants to purchase 1,272,000 shares of common stock at
September 30, 2004 and 1,163,000 shares of common stock at September 30, 2003
because inclusion of such shares would be antidilutive.
5. INVENTORIES:
Inventories, as of the respective dates, consist of the following (in
thousands):
September 30, 2004 December 31, 2003
------------------ -----------------
Raw materials $ 456 $ 467
Work in process 2,880 3,579
Finished goods 3,013 2,226
------ ------
$6,349 $6,272
====== ======
6. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 146, "Accounting for Exit or
Disposal Activities" ("SFAS 146"). Statement of Financial Accounting Standards
("SFAS") 146 addresses significant issues regarding the recognition,
measurement, and reporting of costs associated with exit and disposal
activities, including restructuring activities that are currently accounted for
pursuant to the guidance that the Emerging Issues Task Force ("EITF") has set
forth in EITF Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)." Effective in the first quarter of 2003, the
Company adopted the provisions of SFAS 146. This new accounting principle had an
impact on the timing and recognition of costs associated with the Company's
relocation and consolidation of its West Coast operations during the second half
of 2003 and in the second quarter of 2004.
6
MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
7. STOCK-BASED COMPENSATION
The Company accounts for grants of stock options under its stock option plans
based on the recognition and measurement principles of APB Opinion No. 25 and
related Interpretations. The following table illustrates the effect on net
income and earnings per share if the Company had applied the fair value
recognition provisions of FASB Statement No. 123 to stock-based employee
compensation (in thousands except per share data):
For the three months ended For the nine months ended
Sept 30, 2004 Sept 30, 2003 Sept 30, 2004 Sept 30, 2003
------------- ------------- ------------- -------------
Net income (loss), as reported $ (185) $ (1,916) $ 1,226 $ (1,205)
--------- --------- --------- ---------
Deduct: Total stock-based employee
compensation expense determined under fair
value based method, net of tax (8) (15) (43) (45)
--------- --------- --------- ---------
Pro forma net income (loss) $ (193) $ (1,931) $ 1,183 $ (1,250)
========= ========= ========= =========
Earnings (loss) per share:
Basic:
As Reported $ (.01) $ (.15) $ 0.10 $ (.09)
========= ========= ========= =========
Pro forma $ (.01) $ (.15) $ 0.09 $ (.09)
========= ========= ========= =========
Diluted:
As reported $ (.01) $ (.15) $ 0.09 $ (.09)
========= ========= ========= =========
Pro forma $ (.02) $ (.15) $ 0.08 $ (.09)
========= ========= ========= =========
The fair value of each option grant is estimated on the date of the grant using
the Black-Scholes option-pricing model.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
For the three and nine month periods ended September 30, 2004 and 2003.
Sales
Three Months Ended
(In thousands)
Sept. 30, 2004 Sept. 30, 2003 % Inc. (Dec.)
-------------- -------------- -------------
Trade show exhibits group $ 8,191 $ 5,263 55.6%
Permanent and scenic displays group 8,605 7,363 16.9
------- ------- ----
Total sales $16,796 $12,626 33.0%
======= ======= ====
Nine Months Ended
(In thousands)
Sept. 30, 2004 Sept. 30, 2003 % Inc. (Dec.)
-------------- -------------- -------------
Trade show exhibits group $34,892 $30,964 12.7%
Permanent and scenic displays group 21,009 18,982 10.7
------- ------- ----
Total sales $55,901 $49,946 11.9%
======= ======= ====
Total net sales of $16.8 million for the third quarter of 2004 increased 33%
from the third quarter of 2003, and total net sales of $55.9 million for the
first nine months of 2004 increased 11.9% from the same prior year period. The
third quarter increase was principally attributable to higher sales of trade
show exhibits and related services, which grew 55.6% from comparable sales for
the third quarter of 2003. New customers and higher sales to several existing
customers contributed to the third quarter trade show exhibits sales increase.
Sales of permanent and scenic displays increased 16.9% in the third quarter of
2004 from the same 2003 period primarily due to higher sales of store fixtures.
The sales increase for the first nine months of 2004 was comprised of a 12.7%
increase in sales of trade show exhibits and related services and a 10.7%
increase in sales of permanent and scenic displays. These increases were largely
the result of the same factors discussed for the third quarter.
Gross Profit
Gross profit, as a percentage of sales, improved to 19.8% in the third quarter
of 2004 from 17.6% in the same 2003 period. This improvement was attributable to
several factors, including cost reduction initiatives and the favorable effect
of higher sales on fixed overhead expenses. The gross profit percentage
decreased to 22.1% for the first nine months of 2004 as compared with 22.5% in
the same prior year period. This decrease was due, in large part, to additional
lease expense of $0.2 million accrued in the second quarter of 2004 in
connection with the Company's consolidation of its West Coast operations
initiated during the second half of 2003. The lease obligation for the remaining
portion of the Company's vacated San Diego area facility was terminated on June
30, 2004. The additional expense recorded in the second quarter of 2004
reflected costs associated with this lease termination.
8
Selling Expenses
Selling expenses, as a percentage of sales, decreased to 11.2% for the third
quarter of 2004 and to 10.8% for the first nine months of 2004 from 14.4% and
12.7% for the respective 2003 periods. These decreases were largely the result
of cost reduction initiatives implemented near the end of 2003, which were
realized during 2004.
Administrative and General Expenses
Administrative and general expenses were reduced $0.1 million in the third
quarter of 2004 and $0.6 million in the first nine months of 2004 from the
expense levels for the comparable periods of 2003. These reductions were
principally attributable to cost reduction initiatives implemented for the
Company's trade show exhibit businesses as well as to costs recognized in the
second quarter of 2003 in connection with a terminated merger transaction.
Restructuring and Other Expenses
The Company relocated its San Diego area manufacturing facility to its Los
Angeles, CA area facility during the third quarter of 2003. Costs recorded in
the third quarter of 2003 in connection with this relocation and consolidation
were $1.1 million, which included relocation and employee termination expenses
and the Company recorded a charge for a portion of the remaining lease
obligation related to the vacated San Diego area facility.
Interest Expense
Interest expense increased to $156,000 in the third quarter of 2004 from $58,000
in the same 2003 period and to $381,000 for the first nine months of 2004 from
$169,000 for the first nine months of 2003. Approximately half of these
increases were due to higher borrowing from the Company's revolving credit
facility largely as a result of financing higher accounts receivable. The
remaining portion of these increases was the result of higher interest rates on
the Company's new credit facility discussed below.
Income from Investments in Affiliate
A gain of $50,000 was recognized in the third quarter of 2004 related to the
sale of the Company's stock in a portable trade show exhibit manufacturer.
Benefit from Income Taxes
In the fourth quarter of 2002, the Company established a valuation allowance for
deferred income tax assets related to net operating loss carry forwards. As a
result, the Company did not record a provision for income taxes in 2004. In the
third quarter of 2003, the Company recognized the benefit of an expected income
tax refund for $0.4 million related to a net operating loss carry back.
Net Income (Loss)
The Company incurred a net loss of $0.2 million ($.01 per fully diluted share)
in the third quarter of 2004 as compared with a net loss of $1.9 million ($.15
per fully diluted share) in the same prior year period. Net income of $1.2
million ($.09 per fully diluted share) for the first nine months of 2004
compared favorably to a net loss of $1.2 million ($.09 per fully diluted share)
for the comparable period of 2003. These improvements were due in large part to
higher sales and cost reduction initiatives in 2004 and the $1.1 million
restructuring charge recorded in the third quarter of 2003.
9
Backlog
The Company's backlog of orders was approximately $16 million at September 30,
2004 and September 30, 2003.
LIQUIDITY AND CAPITAL RESOURCES
On February 6, 2004, the Company replaced its $8 million revolving credit
facility with a new credit facility provided by a commercial asset-based lender.
The new credit facility, which expires on February 6, 2007, provides for
borrowing capacity of up to $12 million based on a percentage of eligible
accounts receivable and inventories. This new facility bears interest based on
the 30-day dealer placed commercial paper rate plus 4.50% (effective rate of
approximately 6% at September 30, 2004), restricts the Company's ability to pay
dividends, and includes certain financial covenants (fixed charge coverage ratio
and maximum cash capital expenditure amount of $1 million in 2004 and $1.25
million in 2005 and in 2006). The Company's borrowing capacity was $9.2 million
at September 30, 2004. Proceeds from this credit facility are used primarily for
working capital and other capital purposes.
The Company's working capital increased to $7.5 million at September 30, 2004
from $3 million at December 31, 2003, largely due to a $4 million increase in
accounts receivable. The increase in accounts receivable was principally
attributable to higher sales near the end of the third quarter of 2004 as
compared with sales near the end of 2003 as well as slower payment schedules
from several of the Company's Fortune 1000 clients. The increase in accounts
receivable also led to the increase in long-term debt to $7.6 million at
September 30, 2004 from $5.1 million at December 31, 2003.
The Company has lease commitments for certain facilities under non-cancelable
operating leases. Timing of future lease commitments as well as maturities of
long-term debt is as follows:
Payment due by period
---------------------
2005 to 2008 to After
Contractual Obligations Total 2004 2007 2010 2010
----------------------- ------- ------- ------- ------- -----
Long-Term Debt Obligations $ 7,549 $ 45 $ 7,504 $ -- $ --
Capital Lease Obligations 107 34 73 -- --
Operating Lease Obligations 6,509 542 4,826 1,141 --
Purchase Obligations -- -- -- -- --
Other Long-Term Liabilities
Reflected on the Registrant's
Balance Sheet Under GAAP -- -- -- -- --
------- ------- ------- ------- ----
Total $16,437 $ 1,082 $14,223 $ 1,133 --
======= ======= ======= ======= ----
The Company leases a facility from a partnership controlled by two outside
shareholders of the Company. This lease, which expires on May 14, 2019, contains
an option for the Company to terminate after 10 years (May 14, 2009) subject to
the landlord's ability to relet the premises. The minimum annual rent is
$771,000 through May 14, 2009 and is reset thereafter (not included in the table
above). The Company is also responsible for taxes, insurance and other operating
expenses for this facility.
The Company jointly leases a 31,000 square foot facility with International Expo
Services ("IES"), in which the Company holds a minority interest. The annual
lease commitment for this facility is $214,000 through September 22, 2007, which
is not included with the above future operating lease commitments. Payments in
connection with this lease are made by IES.
10
OUTLOOK
The Company expects sales volume in 2004 to increase modestly above the 2003
sales level. The Company's trade show exhibit and retail chain client base of
Fortune 1000 companies is expected to continue to closely manage their marketing
and capital budgets, which would inhibit the Company's sales and margin growth.
The Company continues to explore new sales opportunities while continuing to
pursue operating efficiency improvements and cost reduction initiatives to
mitigate the impact of its clients' tight budget management.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 146, "Accounting for Exit or
Disposal Activities" ("SFAS 146"). Statement of Financial Accounting Standards
("SFAS") 146 addresses significant issues regarding the recognition,
measurement, and reporting of costs associated with exit and disposal
activities, including restructuring activities that are currently accounted for
pursuant to the guidance that the Emerging Issues Task Force ("EITF") has set
forth in EITF Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)." Effective in the first quarter of 2003, the
Company adopted the provisions of SFAS 146. This new accounting principle had an
impact on the timing and recognition of costs associated with the Company's
relocation and consolidation of its West Coast operations during the second half
of 2003 and in the second quarter of 2004.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements. When used in this report, the
words "intends," "believes," "plans," "expects," "anticipates," "probable,"
"could" and similar words are used to identify these forward looking statements.
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, there are certain important factors that could
cause the Company's actual results to differ materially from those included in
such forward-looking statements. Some of the important factors which could cause
actual results to differ materially from those projected include, but are not
limited to: the Company's ability to continue to identify and enter new markets
and expand existing business; continued availability of financing to provide
additional sources of funding for capital expenditures, working capital and
investments; the effects of competition on products and pricing; growth and
acceptance of new product lines through the Company's sales and marketing
programs; changes in material and labor prices from suppliers; changes in
customers' financial condition; the Company's ability to attract and retain
competent employees; the Company's ability to add and retain customers; changes
in sales mix; the Company's ability to integrate and upgrade technology;
uncertainties regarding accidents or litigation which may arise; the financial
impact of facilities consolidations; uncertainties about the impact of the
threat of future terrorist attacks on business travel and related trade show
attendance; and the effects of, and changes in the economy, monetary and fiscal
policies, laws and regulations, inflation and monetary fluctuations as well as
fluctuations in interest rates, both on a national and international basis.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's revolving credit facility bears a floating rate of interest, based
on the 30-day dealer placed commercial paper rate plus 4.50%. The Company had
borrowings of $7.4 million from its revolving credit facility at September 30,
2004.
Fluctuations in foreign currency exchange rates do not significantly affect the
Company's financial position and results of operations.
11
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures
The Company established a Disclosure Committee chaired by the
Company's Chief Financial Officer and comprised of managers
representing the Company's major areas, including financial
reporting and control, sales, operations and information technology.
This Committee carried out an evaluation of the effectiveness and
operation of the Company's disclosure controls and procedures, and
established ongoing procedures to monitor and evaluate these
controls and procedures in the future. Based upon that evaluation,
as of the end of the period covered by this report, the Chief
Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective in
alerting them on a timely basis to material information relating to
the Company (including its consolidated subsidiaries) required to be
included in the Company's periodic SEC filings.
(b) Changes in internal controls
There were no changes in the Company's internal controls over
financial reporting identified in connection with the Item 4 (a)
evaluation that occurred during the last fiscal quarter that has
materially affected, or is reasonably likely to materially affect,
the Company's internal control over financial reporting.
PART II - OTHER INFORMATION
Responses to Items 1, 2, 3, 4 and 5 are omitted since these items are either
inapplicable or the response thereto would be negative.
ITEM 6. EXHIBITS
(a) Exhibits.
10(a) First Amendment to Loan and Security Agreement
10(b) Second Amendment to Loan and Security Agreement
31(a) Rule 13a - 14(a) / 15(d) - 14 (a) Certification, Chief Executive
Officer
31(b) Rule 13a - 14(a) / 15(d) - 14 (a) Certification, Chief Financial
Officer
32 Section 1350 Certifications
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MARLTON TECHNOLOGIES, INC.
By: /s/ Robert B. Ginsburg
--------------------------
Robert B. Ginsburg
President and Chief Executive Officer
By: /s/ Stephen P. Rolf
--------------------------
Stephen P. Rolf
Chief Financial Officer
Dated: November 10, 2004
12