U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 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 0-19260
RENTECH, INC.
(Exact name of registrant in its charter)
| Colorado | 84-0957421 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
1331 17th Street, Suite 720
Denver, Colorado 80202
(Address of principal executive offices)
(303) 298-8008
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
The number of shares of the Registrant’s common stock outstanding as of May 12, 2004 was 88,209,044.
Form 10-Q
Second Quarter ended March 31, 2004
Table of Contents
2
RENTECH, INC.
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
| March 31, 2004 |
September 30, 2003 | |||||
| (Unaudited) | ||||||
| Assets | ||||||
| Current assets |
||||||
| Cash |
$ | 1,121,115 | $ | 315,763 | ||
| Restricted cash |
500,000 | 500,000 | ||||
| Accounts receivable, net of $17,500 allowance for doubtful accounts |
1,233,693 | 1,143,813 | ||||
| Costs and estimated earnings in excess of billings |
21,593 | 482,070 | ||||
| Stock subscription receivable |
350,000 | — | ||||
| Other receivables |
90,475 | 23,757 | ||||
| Receivable from related party |
19,868 | 30,097 | ||||
| Inventories (Note 3) |
518,113 | 535,782 | ||||
| Prepaid expenses and other current assets |
340,021 | 178,720 | ||||
| Total current assets |
4,194,878 | 3,210,002 | ||||
| Property and equipment, net of accumulated depreciation of $1,885,483 and $1,702,548 |
4,157,413 | 4,217,953 | ||||
| Other assets |
||||||
| Licensed technology, net of accumulated amortization of $2,420,699 and $2,306,308 |
1,010,449 | 1,124,841 | ||||
| Capitalized software costs, net of accumulated amortization of $80,068 and $868,343 |
16,014 | 32,027 | ||||
| Goodwill, net of accumulated amortization of $400,599 |
1,006,554 | 1,006,554 | ||||
| Non-compete agreement, net of accumulated amortization of $88,099 and $71,567 |
74,401 | 90,934 | ||||
| Investment in advanced technology companies (Note 4) |
1,200,000 | 1,200,000 | ||||
| Technology rights, net of accumulated amortization of $187,035 and $172,648 |
100,711 | 115,098 | ||||
| Deposits and other assets |
106,466 | 189,705 | ||||
| Total other assets |
3,514,595 | 3,759,159 | ||||
| Total assets |
$ | 11,866,886 | $ | 11,187,114 | ||
(Continued on following page)
See notes to consolidated financial statements.
- 3 -
RENTECH, INC.
Consolidated Balance Sheets
(Continued from previous page)
| March 31, 2004 |
September 30, 2003 |
|||||||
| (Unaudited) | ||||||||
| Liabilities And Stockholders’ Equity | ||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 943,605 | $ | 960,561 | ||||
| Billings in excess of costs and estimated earnings |
17,695 | 6,300 | ||||||
| Accrued payroll and benefits |
420,654 | 526,899 | ||||||
| Deferred compensation |
473,346 | 437,958 | ||||||
| Accrued liabilities |
383,384 | 473,265 | ||||||
| Other liability |
59,000 | 142,000 | ||||||
| Convertible notes payable to related parties (Note 6) |
178,175 | 87,899 | ||||||
| Lines of credit payable (Note 7) |
1,304,630 | 1,428,072 | ||||||
| Current portion of long-term debt |
113,705 | 86,351 | ||||||
| Current portion of long-term convertible debt to stockholders (Note 5) |
53,422 | 632,435 | ||||||
| Total current liabilities |
3,947,616 | 4,781,740 | ||||||
| Long-term liabilities |
||||||||
| Long-term debt, net of current portion |
1,089,994 | 1,054,183 | ||||||
| Long-term convertible debt to stockholders, net of current portion (Note 5) |
1,822,816 | 2,147,256 | ||||||
| Lessee deposits |
7,485 | 7,485 | ||||||
| Investment in Sand Creek |
15,229 | 15,070 | ||||||
| Total long-term liabilities |
2,935,524 | 3,223,994 | ||||||
| Total liabilities |
6,883,140 | 8,005,734 | ||||||
| Minority interest |
23,799 | 154,269 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity (Note 8) |
||||||||
| Convertible preferred stock - $10 par value; 1,000,000 shares authorized and no shares outstanding |
— | — | ||||||
| Common stock - $.01 par value; 150,000,000 shares authorized; 88,054,786 and 79,336,585 shares issued and outstanding |
880,548 | 793,366 | ||||||
| Additional paid-in capital |
48,111,467 | 42,672,791 | ||||||
| Accumulated deficit |
(44,032,068 | ) | (40,439,046 | ) | ||||
| Total stockholders’ equity |
4,959,947 | 3,027,111 | ||||||
| Total liabilities and stockholders’ equity |
$ | 11,866,886 | $ | 11,187,114 | ||||
See notes to consolidated financial statements.
- 4 -
Consolidated Statements of Operations
| Three Months Ended March 31, |
Six Months Ended March 31, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenues |
||||||||||||||||
| Product sales |
$ | 544,904 | $ | 441,882 | $ | 921,741 | $ | 749,082 | ||||||||
| Service revenues |
1,518,341 | 1,633,113 | 2,787,169 | 3,258,125 | ||||||||||||
| Royalty income |
— | 40,000 | — | 100,000 | ||||||||||||
| Total revenues |
2,063,245 | 2,114,995 | 3,708,910 | 4,107,207 | ||||||||||||
| Cost of sales |
||||||||||||||||
| Product sales |
273,030 | 190,253 | 493,371 | 346,025 | ||||||||||||
| Service costs |
1,032,461 | 1,033,242 | 1,946,296 | 2,109,972 | ||||||||||||
| Total cost of sales |
1,305,491 | 1,223,495 | 2,439,667 | 2,455,997 | ||||||||||||
| Gross profit |
757,754 | 891,500 | 1,269,243 | 1,651,210 | ||||||||||||
| Operating expenses |
||||||||||||||||
| General and administrative expense |
1,890,222 | 1,641,289 | 3,682,138 | 3,391,522 | ||||||||||||
| Depreciation and amortization |
130,726 | 211,680 | 285,676 | 411,656 | ||||||||||||
| Research and development |
212,861 | 157,340 | 385,410 | 242,608 | ||||||||||||
| Total operating expenses |
2,233,809 | 2,010,309 | 4,353,224 | 4,045,786 | ||||||||||||
| Loss from operations |
(1,476,055 | ) | (1,118,809 | ) | (3,083,981 | ) | (2,394,576 | ) | ||||||||
| Other income (expenses) |
||||||||||||||||
| Equity in loss of investee |
(52,431 | ) | (52,803 | ) | (100,673 | ) | (109,226 | ) | ||||||||
| Interest income |
4,538 | 6,601 | 7,383 | 11,901 | ||||||||||||
| Interest expense |
(190,001 | ) | (117,429 | ) | (542,581 | ) | (217,065 | ) | ||||||||
| Loss on disposal of fixed assets |
— | — | (3,640 | ) | — | |||||||||||
| Total other income (expense) |
(237,894 | ) | (163,631 | ) | (639,511 | ) | (314,390 | ) | ||||||||
| Minority interest in subsidiary’s net loss |
38,570 | 49,382 | 130,470 | 84,737 | ||||||||||||
| Net loss applicable to common stockholders |
$ | (1,675,379 | ) | $ | (1,233,058 | ) | $ | (3,593,022 | ) | $ | (2,624,229 | ) | ||||
| Basic and diluted loss per common share |
$ | (0.02 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||
| Basic and diluted weighted-average number of common shares outstanding |
85,588,165 | 72,205,977 | 83,041,519 | 72,102,205 | ||||||||||||
See notes to consolidated financial statements.
- 5 -
Consolidated Statement of Stockholders’ Equity
(Unaudited)
| Convertible Preferred Stock |
Common Stock |
Additional Paid-in Capital |
Unearned Compensation |
Accumulated Deficit |
Total Stockholders’ Equity |
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| Series A |
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