-----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, H5aT4p0GnMr4Xz98pCRDLcJHYfa1FJ5NCVsfTK7C19C1uLGoalHoOBNcqw1C5i1h 3w7WHZKnkC5TidHmBeTmrA== 0000812152-97-000005.txt : 19971117 0000812152-97-000005.hdr.sgml : 19971117 ACCESSION NUMBER: 0000812152-97-000005 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OZO DIVERSIFIED AUTOMATION INC /CO/ CENTRAL INDEX KEY: 0000812152 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 840922701 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-16335 FILM NUMBER: 97720968 BUSINESS ADDRESS: STREET 1: 7450 EAST JEWELL AVE STE A CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3033680401 MAIL ADDRESS: STREET 1: 7450 E JEWELL AVE STREET 2: STE A CITY: DENVER STATE: CO ZIP: 80231 10QSB 1 FORM 10QSB FORM 10-QSB U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _______________ to ______________ Commission File No. 0-16335 OZO DIVERSIFIED AUTOMATION, INC. 7450 East Jewell Avenue, Suite A Denver, Colorado 80231 Telephone: (303) 368-0401 Colorado 84-0922701 (State of Incorporation) (IRS Employer Identification No.) Indicate by check mark 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 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 As of September 30, 1997, Registrant had 458,164 shares of its $.10 par value common stock outstanding. 1 PART I - FINANCIAL INFORMATION OZO Diversified Automation, Inc. BALANCE SHEETS ASSETS
September 30, December 31, 1997 1996 (Unaudited) CURRENT ASSETS Cash $ 525 $ 3,111 Accounts and notes receivable, net of allowance for doubtful accounts of $5,016 455,754 257,775 Inventories (Note 3) 255,204 388,425 Prepaid expenses 9,475 11,385 Other 2,082 0 ------------ ------------- Total Current Assets 723,040 660,696 ------------ ------------- PROPERTY AND EQUIPMENT Manufacturing 151,953 149,328 Furniture and Fixtures 158,537 156,958 Capitalized Lease 195,246 195,246 Leasehold Improvements 5,010 0 Vehicle 10,820 10,820 ------------ ------------- 521,566 512,352 Less accumulated depreciation 360,782 326,199 ------------ ------------- Total Property and Equipment 160,784 186,153 OTHER ASSETS Deferred Financing Costs 10,383 16,254 ------------ ------------- Total Assets $ 894,207 $ 863,103 ------------ ------------- ------------ -------------
See notes to financial statements 2 PART I - FINANCIAL INFORMATION (CONTINUED) OZO DIVERSIFIED AUTOMATION, INC. BALANCE SHEETS (CONTINUED) LIABILITIES AND SHAREHOLDERS' DEFICIENCY
September 30, December 31, 1997 1996 (Unaudited) CURRENT LIABILITIES Current portion of notes payable $ 47,869 $ 34,607 Accounts payable and accrued expenses 498,897 470,205 Note payable Bank 28,812 28,000 Note payable - Officer 50,000 84,500 ------------ ----------- Total Current Liabilities 625,578 617,312 ------------ ----------- OTHER LIABILITIES Long Term Debt and Capitalized Lease Obligation 331,782 387,387 ------------ ----------- Total Liabilities 957,360 1,004,699 ------------ ----------- SHAREHOLDERS' DEFICIENCY Preferred stock, $.10 par value authorized 1,000,000 shares issued - none Common stock, $.10 par value authorized, 5,000,000 shares issued and outstanding 458,164 shares 45,816 45,816 Capital in excess of par value 1,176,254 1,176,254 Accumulated deficit (1,285,223) (1,363,666) ------------- ----------- Total Shareholders' Deficiency (63,153) (141,596) Total Liabilities & Stockholders' Deficiency $ 894,207 $ 863,103 ------------- ----------- ------------- -----------
See notes to financial statements 3 OZO DIVERSIFIED AUTOMATION, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Nine Months Ended September 30, 1997 1996 Net Sales $ 2,032,998 $ 1,490,301 Cost of Sales 1,181,231 773,018 ------------ ------------ Gross Profit 851,767 717,283 ------------ ------------ Operating Expenses: Marketing & Sales 290,491 252,781 Research & Development 116,845 119,992 General and Administrative 365,988 471,165 ------------ ------------ 773,324 843,938 ------------ ------------ Income (loss) before taxes 78,443 (126,655) Provision for Income Taxes 15,689 - Tax Benefit of Operating Loss Carry Forward (15,689) - ------------ ------------ NET INCOME (LOSS) $ 78,443 $ (126,655) ------------ ------------ ------------ ------------ NET INCOME (LOSS) PER SHARE $ 0.17 $ (0.28) ------------ ------------ ------------ ------------
See notes to financial statements 4 OZO DIVERSIFIED AUTOMATION, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30, 1997 1996 Cash flows from operating activities: Net Income (Loss) $ 78,443 $ (126,655) Adjustments to reconcile net income to net cash used in operating activities: Depreciation 34,583 18,751 Amortization of deferred financing costs 5,871 5,870 Other (2,082) (9,785) Decrease (increase) in assets: Accounts receivable (197,979) 16,019 Inventories 133,221 98,789 Prepaid expenses 1,910 6,644 (Decrease) in accounts payable and accrued expenses (39,604) (83,165) ----------- ----------- Total adjustments (64,080) 53,123 ----------- ----------- Net cash provided (used) in operating activities 14,363 (73,532) ----------- ----------- Cash flows from investing activities: Capital Expenditures (9,213) (11,760) ----------- ----------- Net cash (used) in investing activities (9,213) (11,760) ----------- ----------- Cash flows from financing activities: (Decrease) increase in notes payable (7,736) 83,317 ----------- ----------- Net cash (used) provided by financing activities (7,736) 83,317 ----------- ----------- Net decrease in cash (2,586) (1,975) Cash at beginning of period 3,111 3,162 ----------- ----------- Cash at end of period $ 525 $ 1,187 ----------- ----------- ----------- -----------
See notes to financial statements 5 OZO DIVERSIFIED AUTOMATION, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended September 30, 1997 1996 Net Sales $ 604,809 $ 418,254 Cost of Sales 354,083 183,492 ----------- ----------- Gross Profit 250,726 234,762 Operating Expenses: Marketing & Sales 78,407 44,852 Research & Development 39,523 38,237 General and Administrative 115,971 189,369 ----------- ----------- 233,901 272,458 ----------- ----------- Income (loss) before Taxes 16,825 (37,696) Provision for Income Taxes 3,365 - Tax Benefit of Operating Loss Carry Forward (3,365) - ----------- ----------- NET INCOME (LOSS) $ 16,825 $ (37,696) ----------- ----------- ----------- ----------- NET INCOME (LOSS) PER SHARE $ 0.04 $ (0.08) ----------- ----------- ----------- -----------
See notes to financial statements 6 OZO DIVERSIFIED AUTOMATION, INC. NOTES TO FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED) In the opinion of Management of OZO Diversified Automation, Inc. (the Company), the accompanying unaudited financial statements reflect all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30, 1997 and the results of operations and changes in financial position for the nine months ended September 30, 1997. The results of operations for the nine months ended September 30, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. These unaudited financial statements should be read in conjunction with the Company's annual report on Form 10-KSB for the year ended December 31, 1996. NOTE 1 - A summary of significant accounting policies is currently on file with the Securities and Exchange Commission on Form 10-KSB. NOTE 2 - Income Taxes: At December 31, 1996, the Company had net operating loss carryforwards totaling approximately $1,165,000 that may be offset against future taxable income through 2011 and research and development credits of approximately $51,000 expiring through 2011. The Company has fully reserved the tax benefits of these operating losses because the likelihood of realization of the tax benefits cannot be determined. These carryforwards are subject to review by the Internal Revenue Service. Temporary differences between the time of reporting certain items for financial and tax reporting purposes, primarily from using different methods of reporting depreciation costs and warranty and vacation accruals, are not considered significant by management of the Company. NOTE 3 - Inventories:
September 30, December 31, 1997 1996 Raw Materials $ 215,503 $ 311,989 Work in process 10,324 76,436 Finished Goods 29,377 0 ------------- ------------ $ 255,204 $ 388,425 ------------- ------------ ------------- ------------
7 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the nine months ended September 30,1997, the Company had revenues of $2,032,998, an increase of 36% over the comparable period in 1996. During the quarter ended September 30, 1997, the Company recorded sales of $604,809, an increase of 45% over the same quarter in the previous year. The increase in revenues can be attributed to several factors, including but not limited to, a favorable marketplace where the demand for electronic goods (and hence the Company's products) continues to grow steadily; realization of benefits from an aggressive marketing campaign aimed at achieving top line growth; and a favorable shift in customer demand towards the Company's higher end products. The Company posted earnings of $78,443 for the nine months ended September 30, 1997. This is in comparison to a loss of $126,655 for the nine months ended September 30, 1996. Earnings per share during this period improved to $0.17, compared to a loss of $0.28 recorded during the first nine months of 1996. On a quarterly basis, earnings for the three months ended September 30, 1997 were $16,825, compared to a loss of $37,696 for the same three months in 1996. While sales and earnings were lower in third quarter as compared to each of the first two quarters of 1997, this activity level is consistent with the seasonality of the business. Overall, the Company is not only experiencing a favorable sales growth for new systems, but is also enjoying a resurgence in its parts and service businesses as the number of systems installed worldwide continues to increase. As reported earlier, net earnings continue to be favorably impacted by price increases secured for the Company's products (beginning in first quarter 1997), aggressive cost containment efforts adopted by Management in the fourth quarter of 1996 and continuing into 1997, as well as the realization of benefits resulting from numerous re-engineering projects that the Company has actively pursued over the past twelve months. In terms of business outlook, the Company continues to focus on the depaneling application as the primary market for its premium routing equipment, the PanelMASTER HS and the PanelROUTER SI. In September, the Company attended the SMI trade show in San Jose, California, where the newly designed PanelMASTER HS was introduced to the West Coast market. The new design was extremely well-received, with the product receiving very favorable feedback from trade show attendees, customers, and industry representatives. The Company will continue its efforts to improve quality, performance, and overall reliability on all core product lines. As of October 28, 1997 the Company had a backlog of open orders of approximately $368,000, compared to a backlog of $743,000 on October 9, 1996. The reduction in backlog over levels experienced in 1996 is indicative of the Company's success in dramatically compressing cycle times on all systems manufactured year to date. Since initiating the re-engineering process late in 1996, the Company has been able to reduce the total time required from receipt-of-order to ship date by more than 60%. The current backlog combined with the forecast of orders in subsequent quarters, in Management's opinion, provide the opportunity for the Company to continue as a going concern. Except for historical information contained herein, the statements in this report are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand and acceptance, market competition, and risks inherent in the Company's international operations. These and other risks are described elsewhere herein and in the Company's other filings with the Securities and Exchange Commission. 8 PART II - OTHER INFORMATION OZO Diversified Automation, Inc. Items 1- 5 Not Applicable. Item 6 Exhibits and Reports on Form 8-K a) Exhibits none. b) No Reports on Form 8-K were filed during the quarter ending September 30, 1997. Item 7 Not Applicable 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 thereunto duly authorized. OZO DIVERSIFIED AUTOMATION, INC. By: David J. Wolenski Brantley J. Halstead David J. Wolenski Brantley J. Halstead Principal Executive Officer Principal Accounting Officer Principal Financial Officer Corporate Controller Dated: November 13, 1997 9 EX-27 2
5 9-MOS DEC-31-1997 SEP-30-1997 525 0 455,754 0 255,204 723,040 521,566 360,782 894,207 625,578 240,000 0 0 45,816 (108,969) 894,207 2,032,998 2,032,998 1,181,231 1,181,231 0 0 0 78,443 15,689 0 0 0 0 78,443 .17 0
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