-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PLAkUrSQISkNGSaldktHJTH9gVFeQ92O2d/oani30+xwYTMM30PYJ8JW3jimAqD0 y6tno+aKi0jjEavZ3bxEIg== 0000735703-98-000007.txt : 19980415 0000735703-98-000007.hdr.sgml : 19980415 ACCESSION NUMBER: 0000735703-98-000007 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980414 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TECHNOLOGY 80 INC CENTRAL INDEX KEY: 0000735703 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 411373380 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-13870 FILM NUMBER: 98593424 BUSINESS ADDRESS: STREET 1: 658 MENDELSSOHN AVE N CITY: MINNEAPOLIS STATE: MN ZIP: 55427 BUSINESS PHONE: 6125429545 MAIL ADDRESS: STREET 1: 658 MENDELSSOHN AVE N CITY: MINNEAPOLIS STATE: MN ZIP: 55427 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 1998. [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____ TO ____. Commission File Number 0-13870 Technology 80 Inc. - ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Minnesota 41-1373380 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 658 Mendelssohn Avenue North, Minneapolis, Minnesota 55427 - ----------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (612) 542-9545 - ----------------------------------------------------------------- (Issuer's telephone number) N/A --------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practible date. Common Stock, $0.01 par value 1,640,420 - ------------------------------ ------------------- (Title of Class) (Shares Outstanding) Part I - Financial Information Item 1: Financial Statements TECHNOLOGY 80 INC. CONDENSED BALANCE SHEETS (UNAUDITED)
February 28, August 31 1998 1997 ASSETS ---------- ---------- CURRENT ASSETS Cash and cash equivalent $129,756 $284,261 Short-term investments 5,000 64,402 Accounts receivable (less allowance for doubtful accounts: Feb. 28 - $12,000; Aug. 31 - $12,000) 889,546 882,224 Inventories 1,137,433 1,177,452 Deferred taxes 44,000 44,000 Other current assets 25,488 24,383 ---------- ---------- TOTAL CURRENT ASSETS 2,231,223 2,476,722 ---------- ---------- PROPERTY AND EQUIPMENT Furniture and equipment 502,037 473,934 Leasehold improvements 23,060 23,060 ---------- ---------- 525,097 496,994 Less accumulated depreciation 407,109 395,830 ---------- ---------- 117,988 101,164 ---------- ---------- OTHER ASSETS Investments 3,283,017 3,284,214 Deferred taxes 210,800 147,000 ---------- ---------- 3,493,817 3,431,214 ---------- ---------- TOTAL ASSETS $5,843,028 $6,009,100 ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 91,910 $ 95,117 Accrued payroll and payroll taxes 162,691 464,659 Accrued income taxes 78,100 36,990 Payable to investment company 72,842 285,392 Accrued liabilities - other 19,656 182,054 ---------- ---------- TOTAL CURRENT LIABILITIES 425,199 1,064,212 ---------- ---------- STOCKHOLDERS' EQUITY Common stock, $0.01 par value (authorized - 5,000,000 shares; issued and outstanding - Feb. 28, 1,640,420, Aug. 31, 1,605,045 shares) 16,404 16,051 Paid-in capital 3,441,353 3,408,160 Other - loans (162,263) (162,263) Unrealized loss on available-for-sale securities (358,661) (265,933) Retained earnings 2,480,996 1,948,873 ---------- ---------- 5,417,829 4,944,888 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,843,028 $6,009,100 ========== ========== See notes to condensed financial statements.
TECHNOLOGY 80 INC. CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three months ended Six months ended February 28, February 28, 1998 1997 1998 1997 ---- ---- ---- ---- REVENUES $1,429,677 $1,160,828 $2,753,274 $2,154,708 COST OF GOODS SOLD 556,959 413,908 1,097,206 801,443 ---------- ---------- ---------- ---------- GROSS PROFIT 872,718 746,920 1,656,068 1,353,265 ---------- ---------- ---------- ---------- OPERATING EXPENSES General and administrative 156,026 117,426 305,725 246,127 Research and development 203,996 183,130 380,890 337,114 Selling 180,170 152,503 383,059 304,739 ---------- ---------- --------- ---------- TOTAL OPERATING EXPENSES 540,192 453,059 1,069,674 887,980 ---------- ---------- --------- ---------- INCOME FROM OPERATIONS 332,526 293,861 586,394 465,285 OTHER INCOME 165,189 73,475 224,729 190,868 ---------- ---------- --------- ---------- INCOME BEFORE INCOME TAXES 497,715 367,336 811,123 656,153 PROVISION FOR INCOME TAXES 175,000 130,000 279,000 223,000 ---------- ---------- --------- ---------- NET INCOME $ 322,715 $ 237,336 $ 532,123 $ 433,153 ========== ========== ========== ========== EARNINGS PER SHARE $0.20 $0.15 $0.33 $0.27 ===== ===== ===== ===== See notes to condensed financial statements.
TECHNOLOGY 80 INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six months ended February 28, 1998 1997 ---------- ----------- OPERATING ACTIVITIES Net income $ 532,123 $ 433,153 Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization 20,116 16,381 Deferred taxes 24,700 19,750 Gain on sale of investments (174,924) (118,031) Gain on sale of fixed asset (384) 0 Changes in operating assets and liabilities: Accounts receivable (7,322) (127,830) Inventories 40,019 (38,208) Other current assets (1,105) (8,959) Accounts payable (3,207) 6,505 Accrued income taxes 41,110 (158,137) Accrued liabilities (676,916) (177,601) ----------- ----------- NET CASH USED BY OPERATING ACTIVITIES (205,790) (152,977) ----------- ----------- INVESTING ACTIVITIES Proceeds from sale of equipment 1,350 0 Purchase of equipment (37,906) (33,799) Proceeds from sales and maturities of investments 1,273,514 1,090,672 Purchases of investments (1,219,219) (1,112,915) ----------- ----------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 17,739 (56,042) ----------- ----------- FINANCING ACTIVITIES Proceeds from exercise of stock options 33,546 2,476 ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 33,546 2,476 ----------- ----------- NET DECREASE IN CASH AND CASH EQUIVALENTS (154,505) (206,543) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 284,261 419,136 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 129,756 $ 212,593 =========== =========== See notes to condensed financial statements.
TECHNOLOGY 80 INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) February 28, 1998 NOTE A - FINANCIAL INFORMATION The unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission; accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The condensed balance sheet at August 31, 1997 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These interim financial statements should be read in conjunction with the financial statements and notes in the Company's 1997 Annual Report on Form 10-KSB filed with the Securities and Exchange Commission. In the opinion of management, the financial statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the interim periods. NOTE B - EARNINGS PER SHARE Earnings per share are calculated in accordance with the provisions of Statement of Financial Accounting Standards No. 128 - "Earnings per Share" (SFAS No. 128), effective for interim and annual periods ending after December 15, 1997. SFAS No. 128 requires the Company to report both basic earnings per share which is based on weighted-average number of common shares outstanding and diluted earnings per share which is based on the weighted-average number of common shares outstanding and all dilutive potential common shares outstanding. All prior years earnings per share in this report have been recalculated to reflect the provisions of SFAS No. 128. All earnings per share data in this report reflect basic earnings per share, unless otherwise indicated. The details of the earnings per share calculations for the quarter ending February 28, 1998 and 1997 follow:
Per share 1998 Income Shares amount ---- ------ ------ --------- Earnings per share of common stock - basic $322,715 1,635,651 $0.20 Stock options - 124,655 - Earnings per share of common -------- --------- ----- stock - assuming dilution $322,715 1,760,306 $0.18 ======== ========= ===== Per share 1997 Income Shares amount ---- ------ ------ --------- Earnings per share of common stock - basic $237,336 1,572,894 $0.15 Stock options - 145,437 - Earnings per share of common -------- --------- ----- stock - assuming dilution $237,336 1,718,331 $0.14 ======== ========= =====
Item 2: Management's Discussion and Analysis Results of Operations - --------------------- Revenues for the second quarter ended February 28, 1998 increased 23% over the same period the preceding year and increased 28% for the six months ended February 28, 1998. The revenue increase for the three and six months ended February 28, 1998 was due to an increase in sales volume. One customer accounted for 15% of the sales volume for the six months ended February 28, 1998. Gross profit percentages for the second quarter ended February 28, 1998 and 1997 was 61% and 64% respectively. Gross profit percentages for the six months ended February 28, 1998 was 60% compared to 63% for the six months ended February 28, 1997. Operating expenses as a percentage of sales was 38% for the three months and 39% for the six months ended February 28, 1998 compared to 39% and 41% for the same periods the prior year, respectively. Other income increased $91,714 for the quarter ended February 28, 1998 and increased $33,861 for the six months ended February 28, 1998 from the same periods the preceding year. The increase was primarily due to increased investment income. Net income was $322,715 and $237,336 for the quarter ended February 28, 1998 and 1997 respectively. This represents a 36% increase. For the six months ended February 28, 1998 and 1997, net income was $532,123 and $433,153 respectively. This represents a 23% increase. Liquidity and Capital Resources - ------------------------------- Registrant's balance sheet shows a strong capital position. Operations used $205,790 in cash compared to $152,977 the same period the prior year. Cash and cash equivalents decreased $154,505 since August 31, 1997. Investing activities provided for $17,739. Proceeds from the exercise of stock option was $33,546. Registrant expects that there will be sufficient capital to fund its operations during fiscal year 1998. Registrant has no long-term debt and does not anticipate, at this time, that it will be necessary to seek any debt financing in the near future for ongoing operations, but may consider some type of financing for other purposes. Statements included in this Management's Discussion and Analysis or Plan of Operation and elsewhere in this Form 10-QSB, in future filings by the Registrant with the Securities and Exchange Commission and in the Registrant's press releases and oral statements made with the approval of authorized executive officers, if the statements are not historical or current facts, should be considered "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Registrant wishes to caution the reader not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Part II - Other Information Item 1: Legal Proceedings ----------------- None. Item 2: Changes in Securities --------------------- None. Item 3: Defaults Upon Senior Securities ------------------------------- None. Item 4: Submission of Matters to a Vote of Security Holders --------------------------------------------------- None. Item 5: Other Information ----------------- None. Item 6: Exhibits and Reports on Form 8-K -------------------------------- a. Exhibits -------- Exhibit 27 - Financial Data Schedule b. Reports on Form 8-K ------------------- None. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Technology 80 Inc. ---------------------------- (Registrant) April 14, 1998 /s/ Duane Markus, President, CEO - ------------------------ --------------------------------- (Date) Duane Markus, President, CEO EX-27 2
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