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 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 March 31, 2012


Or

[  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number: 0-49854


OXFORD TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


DELAWARE                                                                                04-3615974

(State or other jurisdiction of incorporation or organization               (I.R.S. Employer Identification No.)


80 WALL STREET, SUITE 818, NEW YORK, NEW YORK             10005

(Address of principal executive offices)                                 (Zip Code)


(212) 809-1200

(Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:  None


Securities registered pursuant to Section 12(g) of the Act:


COMMON STOCK, $.0001 PAR VALUE

(Title of Class)


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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [X]  No  [  ]


Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non- accelerated filer or a smaller reporting company. See definition of "large accelerated filer, and accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer   [   ]   Accelerated filer [   ]    Non Accelerated filer [  ] Smaller Reporting Company [X]


Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes [   ]     No    [X]







1




Applicable Only to Corporate Issuers


Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 18,564,002 shares of common stock as of May 8, 2012.



OXFORD TECHNOLOGIES, INC


FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2012



TABLE OF CONTENTS


 

PART I – FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements

3

 

 

 

 

Condensed Consolidated Balance Sheets as of March 31, 2012 (unaudited) and December 31, 2011

3

 

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2012 and 2011 (unaudited)

4

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011 (unaudited)

5

 

Notes to Condensed Consolidated Financial Statements (unaudited)

6

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Conditions and Results of Operations

8

 

 

 

Item 3.

 Quantitative and  Qualitative Disclosure about Market Risk

11

 

 

 

Item 4T.

Controls and Procedures

12

 

 

 

PART II – OTHER INFORMATION

 

 

 

Item 1

Legal Proceedings

12

 

 

 

Item 1A

Risk Factors

12

 

 

 

Item 2

Unregistered Sales of Equity and Securities and Use of Proceeds

12

 

 

 

Item 3

Defaults Upon Senior Securities

12

 

 

 

Item 4

Mine Safety Disclosures

12

 

 

 

Item 5

Other Information

12

 

 

 

Item 6.

Exhibits

12

 

 

 

SIGNATURES

13

 

 

 

 

 



Item 1.

Financial Statements









2





OXFORD TECHNOLOGIES, INC

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2012

 


 

 

 

 

 

 

March 31

 

December 31

 

 

 

 

 

 

2012

 

2011

 

 

 

 

 

 

US $'000

 

US $'000

ASSETS

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

2,374

 

2,557

 

Accounts receivable, net of allowance of $17 and $0

 

8,862

 

6,898

 

Inventory, net

 

 

 

6,954

 

7,144

 

Other current assets

 

 

 

259

 

323

 

 

Total Current Assets

18,449

 

16,922

 

 

 

 

 

 

 

 

 

 

Property and equipment, net of accumulated depreciation

 

 

 

 

 of $26,835 and $25,911

 

 

8,678

 

8,407

 

 

 

 

 

 

 

 

 

 

Deferred tax assets - net non-current

 

 

1,149

 

1,114

 

Security deposits

 

 

 

44

 

43

 

 

 

 

 

 

 

 

 

 

 

Total Assets

28,320

 

26,486

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

 

 

 

 

 

 

 

Accounts payable

 

 

 

4,456

 

4,964

 

Accounts payable, related party

 

 

1,016

 

999

 

Taxes payable

 

 

 

1,376

 

987

 

Checks in excess of cash in bank

 

 

2,075

 

1,025

 

Accrued liabilities - current

 

 

1,011

 

1,345

 

Capital Leases - current portion

 

 

349

 

365

 

Note payable - related party

 

 

1,394

 

1,353

 

Deferred revenue

 

 

 

1,312

 

1,824

 

 

Total Current Liabilities

12,989

 

12,862

 

 

 

 

 

 

 

 

 

Long-term Liabilities

 

 

 

 

 

 

 

Capital leases, non-current portion

 

 

70

 

145

 

 

Total Long-term Liabilities

70

 

145

 

 

Total Liabilities

13,059

 

13,007

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

Preferred stock, $.0001 par value, 20,000,000 shares authorized,

 

 

 

 

 none issued and outstanding

-

 

-

 

Common stock, $.0001 par value, 80,000,000 shares authorized,

 

 

 

 

 18,564,002 shares issued and outstanding

 

2

 

2

 

Additional paid in capital

 

 

33,478

 

33,478

 

Accumulated other comprehensive income

 

(3,008)

 

(3,577)

 

Accumulated deficit

 

 

 

(15,211)

 

(16,424)

 

 

Total Stockholders' Equity

15,261

 

13,479

 

 

Total Liabilities and Stockholders' Equity

28,320

 

26,486





See accompanying notes to the unaudited condensed consolidated financial statements



3






OXFORD TECHNOLOGIES, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) (UNAUDITED)

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2012




 

 

 

 

 

 

March 31,

 

March 31,

 

 

 

 

 

 

2012

 

2011

 

 

 

 

 

 

US $'000

 

US $'000

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

10,951

 

7,433

Cost of Sales

(8,618)

 

(6,381)

 

 

 

Gross Profit / (Loss)

2,333

 

1,052

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Selling, general and administrative

1,333

 

1,176

 

 

 

Operating Income / (Loss)

1,000

 

(124)

 

 

 

 

 

 

 

 

 

Other Income and Expenses

 

 

 

 

 

 

 

Rental income

 

 

 

251

 

239

 

Interest income

 

 

 

1

 

                        -

 

Interest expense

 

 

 

(39)

 

(53)

 

Net Income / (Loss) before Income Tax Benefit

1,213

 

62

 

 

 

 

 

 

 

 

 

Income tax benefit / (expense)

                        -

 

                        -

 

 

Net Income

1,213

 

62

 

 

 

 

 

 

 

 

 

Other Comprehensive Income / (Loss)

 

 

 

 

Foreign currency translation

569

 

357

 

 

 

 

 

 

 

 

 

Total Comprehensive Income / (Loss)

1,782

 

419

 

 

 

 

 

 

 

 

 

Basic and Diluted Earnings / (Loss) Income

 

 

 

 

 

per Common Share

 

 

 

0.07

 

0.00

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding

18,564,002

 

18,564,002













See accompanying notes to the unaudited condensed consolidated financial statements










4





OXFORD TECHNOLOGIES, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2012


 

 

 

 

 

Year Ended

 

 

 

 

 

March 31

 

March 31

 

 

 

 

 

2012

 

2011

 

 

 

 

 

US $'000

 

US $'000

Cash Flows from Operating Activities:

 

 

 

 

 

Net Income

 

 

1,213

 

62

 

Adjustments to reconcile net income (loss) to net

 

 

 

 

 cash used in operating activities:

 

 

 

 

 

Depreciation and amortization

 

260

 

282

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(1,741)

 

(1,557)

 

Inventory

 

 

 

406

 

(944)

 

Prepaid expenses

 

 

71

 

113

 

Accounts payable

 

 

(656)

 

(997)

 

Taxes payable

 

 

358

 

195

 

Accrued liabilities and other payables

 

(325)

 

(279)

 

Interest payable - related party

 

(47)

 

(91)

 

Deferred income

 

 

(564)

 

(236)

 

Cash used in operating activities

(1,025)

 

(3,452)

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

Purchase of property and equipment

 

(144)

 

(38)

 

Cash used in investing activities

(144)

 

(38)

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

Checks in excess of bank balance

 

1,011

 

3,338

 

Debt instrument periodic payment - principal

(106)

 

(137)

 

Cash provided by financing activities

905

 

3,201

 

 

 

 

 

 

 

 

Effect of exchange rate on cash and cash equivalents

81

 

70

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(183)

 

(219)

 

 

 

 

 

 

 

 

Cash and Cash Equivalents, Beginning

 

2,557

 

2,546

 

 

 

 

 

 

 

 

Cash and Cash Equivalents, Ending

 

2,374

 

2,327

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

Cash Payments For:

 

 

 

 

 

 

 Interest

 

 

 

-

 

-

 

 

 

 

 

 

 

 

 

 Taxes

 

 

 

-

 

-

 

 

 

 

 

 

 

 






See accompanying notes to the unaudited condensed consolidated financial statements






5





OXFORD TECHNOLOGIES, INC


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2012


NATURE OF OPERATIONS


Oxford Technologies, Inc. (“the Company”) and its subsidiary, Axiom Manufacturing Services Limited (“Axiom”) provide electronic manufacturing services (EMS) to third parties in the following market sectors: computers and related products, industrial control equipment, testing and instrumentation products and medical devices. Axiom offers its customers a comprehensive integrated design and manufacturing service from initial design to volume production, direct order fulfilment and aftermarket support. The Company’s customer base is primarily in the United Kingdom.


The Company was incorporated in the State of Delaware on March 8, 2002. On February 12, 2003, the Company acquired Axiom by issuing 13,564,002 shares of its common stock in exchange for all issued and outstanding capital shares of Axiom owned by Great Admirer Limited (“Great Admirer”), a Hong Kong Corporation. The Company as the legal acquirer was the registrant on that date and remains the registrant with the Securities and Exchange Commission. The merger was accounted for as a reverse acquisition under accounting principles generally accepted in the United States of America. As a result of the acquisition, Axiom became the Company’s wholly-owned subsidiary and Great Admirer became the controlling shareholder of the Company. The continuing operations of the Company will reflect the consolidated operations of Oxford and its wholly-owned subsidiary, Axiom.


At the time Great Admirer acquired Axiom in April 2002, Great Admirer was a non-operating shell company and incurred minimal costs to acquire Axiom. Therefore no costs incurred by Axiom were recorded in the accounts of Axiom.


Axiom was incorporated in South Wales, United Kingdom on September 3, 1980, under the name of Aiwa (UK) Limited, with the Company subsequently being renamed Axiom Manufacturing Services Limited on April 10, 2002.


On July 29, 2008 The Company acquired 100% of the share capital (1,000 shares) of Axiom MS Limited (“AMS”). AMS was incorporated on July 29, 2008 to seek new business opportunities.


Axiom’s principal office and manufacturing facility is located at Technology Park, Newbridge, South Wales, United Kingdom. AMS is the owner of the above mentioned facility.


In January 2011 the Company transferred all of its 13,564,002 shares in Axiom Manufacturing Services Limited to Axiom MS Limited. In exchange Axiom MS Limited issued 700 shares of its common stock to Oxford Technologies Inc.



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Financial Statement Presentation – The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for full year financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature. Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. These financial statements and notes included herein should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto that are included in the Company’s annual report on Form 10-K for the year ended December 31, 2011.


Net Income/ (Loss) Per Common Share – Basic net income/ (loss) per share of common stock is calculated by dividing the net income/ (loss) by the weighted average number of shares of common stock outstanding during the period.



6




Foreign Currency Translation - The functional currency of the Company's operations in the UK is the British Pound Sterling. The financial statements of the Company were translated to US dollars using quarter-end exchange rates for the balance sheets and weighted average exchange rates for the statements of operations and statements of cash flows. Equity transactions were translated using historical rates. Foreign currency translation gains or losses as a result of fluctuations in the exchange rates are reflected in the statements of changes in stockholders’ equity in total comprehensive income or loss.


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 of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Revenue Recognition - Sales revenues are generally recognized when the products are shipped to the customers or services are rendered, net of discounts, returns and allowance. All revenues generated and the associated cost of sale incurred relate to the EMS service offering (manufacturing of OEM customer products) in 2012, with 99% of revenues coming from this source and the remaining percentage of revenue and cost of sale relating to the provision of a market return and repair service.


Trade Receivables – Trade receivables are stated at net realisable value. This value includes an appropriate estimated allowance for uncollectible accounts. The allowance is calculated based upon an evaluation of the level of past due accounts and the relationship with and financial status of our customers.


Inventory – Inventories are stated at the lower of cost or market value. Cost is determined using the first-in, first-out method. Inventory quantities on hand are regularly reviewed and where necessary, reserves for excess and unusable inventories recorded.



 

March 31

March 31

 

2012

2011

 

US $'000

US $'000

 

 

 

Raw Materials

3,941

3,845

Work in Progress

2,861

2,304

Finished Goods

152

173

 

 

 

 

6,954

6,322


Property, plant and equipment – Property, plant and equipment are recorded at cost, net of accumulated depreciation. Depreciation is computed on a straight line basis over estimated useful lives of various asset classes as follows:


Building and building improvements

20 to 45 years

Machinery and equipment

5 to 10 years

Fixtures and fittings

3 to 8 years


Upon retirement or sales, the costs and related depreciation of the asset disposed of, are removed from the accounts and any resulting gain or loss is included in the determination of income. Repairs and maintenance costs are expensed as incurred. The Company reviews its property and equipment annually for impairment, and accordingly will write down those assets to their estimated fair value.


Income Taxes – Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognised for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognised for taxable temporary differences.


Fair Value of Financial Instruments – The carrying amounts of the Company’s financial instruments, which include cash, accounts receivable, accounts payable and accrued expenses are representative of their fair values due to the short-term maturity of these instruments.




7




Funding Arrangements – The Company has an invoice discounting facility provided by its bankers under which the bank advances up to 80% of the value of qualifying invoices on presentation. This is repaid when the customer settles the invoice with the remaining 20% released to the Company less bank charges at this time. The Company is responsible for collecting the debt. Security for the advances under this facility is provided by a charge over the accounts receivable of the Company. The amount held at this facility is shown in Checks in Excess of Cash in Bank on the balance sheet. Axiom Manufacturing Services accounts for this as a transfer of receivables as a secured borrowing with pledge of collateral. Management believes that this treatment complies with guidance provided in FASB ASC 860-30-25-3.


The Company was in credit on this facility as at March 31, 2012 compared to borrowings amounting to $2.4 million at March 31, 2011. Borrowings are included with ‘Checks in Excess of Cash in Bank’ under the liability section of the balance sheet.


Charges incurred amounted to $0.05 million to March 31, 2012 and interest for the same period amounted to $0.01 million. Charges are included within ‘Operating Expenses’ in the statement of operations and comprehensive income.


Checks in Excess of Cash in Bank – The components of this balance sheet account are shown below:



 

March 31

December 31

 

2012

2011

 

US $'000

US $'000

 

 

 

Current Account

16

251

Deposit Account

48

47

Invoice Finance

865

(1,315)

Unpresented Checks

(3,004)

(8)

 

 

 

Total

(2,075)

(1,025)

 

 

 



Recently Issued Accounting Pronouncements – We have reviewed recent accounting pronouncements and determined they will have no present or future impact on our business. Accounting standards updates have been issued through 2011-12.


3.  LONG-TERM CONTRACTS


Capital Leases


At the end of each lease the Company will purchase the equipment. The leases are a mixture of 3 and 5 year terms.


4.  SUBSEQUENT EVENTS


The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued. Per our evaluation we noted no significant subsequent event that requires disclosure.












8




ITEM 2.  MANAGEMENT’S DISCUSSION & ANALYSIS OR PLAN OF OPERATIONS


Forward-Looking Statements


The discussion in this quarterly report on Form 10-Q contains forward-looking statements. Such statements are based upon beliefs of management as well as assumptions made by and information currently available to management of the Company as of the date of this report. These forward looking statements can be identified by the use of such verbs as “expect”, “anticipate”, “believe” or similar verbs or conjugations of such verbs. If any of these assumptions prove incorrect or should unanticipated circumstances arise, the actual results of the Company could materially differ from those anticipated by such forward-looking statements. The Company assumes no obligation to update any such forward-looking statements.


Overview


The Company was incorporated in the State of Delaware on March 8, 2002 as a blank check company. On February 12, 2003, the Company acquired 100% of the outstanding securities of Axiom Manufacturing Services Limited (“Axiom”) with the issuance and exchange of 13,562,002 shares of the Company’s common stock (“the Merger”). Although the Company is the legal survivor in the Merger and remains the registrant with the SEC, under accounting principles generally accepted in the United States, the Merger was accounted for as a reverse acquisition, whereby Axiom is considered the “acquirer” for financial reporting purposes as its shareholders controlled more than 50% of the post transaction combined company. Among other matters, this requires us to present all financial statements, prior historical financial statements and other information of Axiom and requires a retroactive restatement of Axiom historical shareholders investment for the equivalent number of shares of common stock received in the Merger. Accordingly, the Company’s consolidated financial statements present the results of the operations of Axiom for the year ended December 31, 2002, and reflect the acquisition of the Company on February 12, 2003 under the purchase method of accounting. Subsequent to February 12, 2003, the Company’s operations reflect the combined operations of the former Oxford and Axiom.


The Company conducts its business through its subsidiary Axiom Manufacturing Services Limited. Prior to its acquisition by Great Admirer in April 2002, Axiom was a wholly-owned subsidiary of Aiwa Europe Limited, which in turn was a wholly-owned subsidiary of the Aiwa Company of Japan (note that the Aiwa business was acquired by the Sony Corporation on October 1, 2002). As the sole original equipment manufacturer of Aiwa's own-brand products in Europe, Axiom was responsible for producing consumer electronics products primarily audio and visual equipment on behalf of the Aiwa Company of Japan, for distribution in the UK, France, Germany, Poland and the Netherlands. In December 2000 due to gradually declining profit margins, Axiom started to provide electronic manufacturing services (EMS) for third parties. In July 2001 production of Aiwa branded products was terminated and Axiom became solely an EMS provider offering its customers a comprehensive and integrated design and manufacturing service, from initial product design through to volume production and aftermarket support. On July 29, 2008 The Company acquired 100% of the share capital (1,000 shares) of Axiom MS Limited (“AMS”). AMS was incorporated on July 29, 2008 to seek new business opportunities.


In January 2011 the Company transferred all of its 13,564,002 shares in Axiom Manufacturing Services Limited to Axiom MS Limited. In exchange Axiom MS Limited issued 700 shares of its common stock to Oxford Technologies Inc.


The Company provides electronics manufacturing services in the business to business or business to industry sectors and to original equipment manufacturers in the following market sectors:


·

Medical devices

·

Industrial control equipment

·

Domestic appliances

·

Computer and related products

·

Testing and instrumentation products

·

Ministry of Defense products


As a result of efficiently managing costs and assets, Axiom is able to offer its customers an outsourcing solution that represents a lower total cost of acquisition than that typically provided by the OEM’s own manufacturing operation. OEM’s contract with Axiom to build their products or to obtain services related to product development and prototyping, volume manufacturing or aftermarket support. In many cases Axiom builds



9




products that carry the brand name of its customers and substantially all of Axiom’s manufacturing services are provided on a turnkey basis where Axiom purchases customer specific components from suppliers, assembles the components onto printed circuit boards, performs post production testing and provides the customer with production process and test documentation. Axiom also provides manufacturing services on a consignment basis where material is free issued by the customer for Axiom to build into finished printed circuit boards or product. Axiom offers its customers flexible just-in-time delivery programs which allow product shipments to be closely coordinated with the customers’ inventory requirements. Additionally Axiom completes the assembly of final product for its customers by integrating the manufactured printed circuit boards into the customers’ finished products.


RESULTS OF OPERATIONS


Three month periods ending March 31, 2012 and 2011


Revenues


Revenues for the three month period ended March 31, 2012 were $11.0 million. This was an increase of 47% as compared to $7.4 million for the same period of the prior year. The increase in revenue is attributable to an increase in sales orders.


Cost of Sales


Cost of sales consists of the material cost of goods sold, direct overhead, direct wages, direct utilities and direct depreciation expenses. For the three months ended March 31, 2012 cost of sales were $8.6 million, an increase of 35% as compared to $6.4 million for the same period of the previous year. The Company would expect an increase due to the fact revenue has increased. Cost of sales to revenue percentage was 79% as compared to 86% from the same period of the previous year. The decrease is mainly due to more products sold with a higher sales margin as compared to previous years.


Operating Expenses


Operating expenses consist of selling, general and administrative expenses. For the three months ended March 31, 2012 operating expenses were $1.3 million as compared to $1.2 million for March 31, 2011. The Company believes the small increase is not material.


Rental Income


For the period ended March 31, 2012, rental income was $0.3 million as compared to $0.2 million for the three months ended March 31, 2011.


Interest Expense


Interest expense for the three months ended March 31, 2012 amounted to $0.04 million as compared to $0.05 million for the same period of the previous year.


Net Income / (Loss)


For the three month period ending March 31, 2012, net income was $1.2 million as compared to $0.06 million for the three month period ending March 31, 2011. This resulted in a basic income per share of $0.07 on weighted average common shares outstanding of 18,564,002 for the three month period ended March 31, 2012 as compared to a basic income per share of $0.00 on the 18,564,002 of weighted average common shares outstanding in the same period of the previous year.


Liquidity and Capital Resources


The Company’s primary source of capital is cash provided by operations and borrowings under its credit facilities. As of March 31, 2012 the Company had cash and cash equivalents of around $2.4 million.




10




For the three months ended March 31, 2012 net cash used in operating activities was $1.0 million compared to $3.5 million for the same period of the prior year. This amount is mainly due to a large increase in accounts receivable.


For the three months ended March 31, 2012 net cash used in investing activities was $0.1 million due to the purchase of some fixed assets compared to $0.04 million for the same period of the previous year.


Net cash provided by financing activities for the three month period ended March 31, 2012 amounted to $0.9 million as compared to $3.2 million for the three month period ended March 31, 2011. This amount is mainly due to an increase in checks in excess of cash in bank.


For the three months ended March 31, 2012 short-term capital needs were met by invoice discounting, finance lease arrangements, inter-company and bank loans. The Company’s banking facilities comprise an invoice discounting facility with a maximum advance limit of $3.2 million subject to the level of qualifying sales invoiced and a bank overdraft limit of $0.2 million. Interest rates are calculated with reference to bank base rates.  At March 31, 2012 interest on invoice discounting facility was charged at 2% above Base and interest on the bank overdraft at 2% above Base. The inter-company loan interest rate is 5%, the finance lease agreements have varying interest rates ranging from 6% to 7.5% and the note payable demands an interest rate of 6%.  The accounts receivable of the Company is collateral for this arrangement.


The following summarizes our debt and other contractual obligations at March 31, 2012:


 

Amount

 

 

Description

$'000

 

Term

Invoice discounting

(865)

 

Ongoing until facility terminated.

Note Payable

1,394

 

Payable in full on December 31, 2012

Inter-company loan

1,153

 

 

Finance lease agreements

282

 

Mix of 3 & 10 yr term commencing August 2005 to December 2010

 

 

 

 

 

1,964

 

 


The inter-company loans are not eliminated on consolidation, as the loans were from related parties which do not get consolidated with Oxford Technologies Inc. The balance per the consolidated balance is shown as follows:


Description

Amount

 

$'000

Accounts payable related party

1,016

Capital lease current portion

128

Capital lease non-current portion

9

 

 

 

1,153



As of the date of this report, we are in compliance with all covenants under our existing credit facilities.


In the event that adequate funding is not available from existing credit facilities, we would work with existing lenders to identify additional sources of financing. We have no current plans to make significant capital expenditures. At present we do not have any arrangements for financing except those mentioned above. While there can be no assurance that we will have sufficient funds over the next twelve months, we believe that funds generated from operations plus borrowings under our invoice discounting facility will be adequate to meet our anticipated operating expenses, capital expenditure and debt obligations for at least the next twelve months. Nevertheless, our continuing operating and investing activities may require us to obtain additional sources of financing. There can be no assurance that any necessary additional financing will be available to us on commercially reasonable terms, if at all.



Off-Balance Sheet Arrangements



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There are no off-balance sheet arrangements.


Critical Accounting Policies


Disclosure of the Company’s significant accounting policies is included in Note 1 to the consolidated financial statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Some of these policies require management to make estimates and assumptions that may affect the reported amounts in the Company’s financial statements.




ITEM 3.   Quantitative & Qualitative Disclosures about Market Risk



This item is not required for a smaller reporting company.




ITEM 4.   Controls & Procedures


(a)

Evaluation of Disclosure Controls and Procedures


Our management, under the supervision and with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2012. Based on that evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.


As used herein, the term “disclosure controls and procedures” means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms issued by the SEC.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and its principal financial officer or officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.


(b) Changes in Internal Controls over Financial Reporting


During the first quarter of 2012 there was no change in internal control over financial reporting.




PART II


OTHER INFORMATION


Item 1.  Legal Information


Not applicable


Item 1A. Risk Factors


Our 2011 Form 10-K contains a detailed discussion of certain risk factors that could materially adversely affect our business, operating results or financial condition. There were no material changes in these risk factors since such disclosure.


Item 2.  Unregistered Sales of Equity Securities and use of Proceeds



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Not Applicable


Item 3.  Defaults upon Senior Securities


Not Applicable


Item 4.  Mine Safety Disclosure


None


Item 5.  Other Information


Not Applicable


Item 6.  Exhibits


(a)  Exhibits


Exhibit No.                         

Description


     31.1           Certification Pursuant to rules 13a-14(a) and 15d-14(a) of the Exchange Act.


     32.1           Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the   Sarbanes- Oxley Act of 2002


101.INS       XBRL Instance Document


    101.SCH     XBRL Taxonomy Extension Schema Document

    101.CAL     XBRL Taxonomy Extension Calculation Linkbase Document

    101.LAB     XBRL Taxonomy Extension Label Linkbase Document

    101.PRE      XBRL Taxonomy Extension Presentation Linkbase Document

    101.DEF      XBRL Taxonomy Extension Definition Linkbase Document




SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.



Oxford Technologies, Inc.




By: /s/ Vivian Lam

Vivian Lam, President and Chief Financial Officer


May 9, 2012



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