-----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, JqdwkUjn/bHfzbsq1K9MSzxaXZZ12/kXWKDV2Fgh7h7gS2aGUE1JY9tnC9SH2TQ+ EzQ9oziJO7B36uofCzug+A== 0000812152-98-000002.txt : 19980518 0000812152-98-000002.hdr.sgml : 19980518 ACCESSION NUMBER: 0000812152-98-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 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: 98624476 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 March 31, 1998 [ ] 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 March 31, 1998, Registrant had 478,164 shares of its $.10 par value common stock outstanding. 1 PART I - FINANCIAL INFORMATION OZO Diversified Automation, Inc. BALANCE SHEETS ASSETS
March 31, December 31, 1998 1997 (Unaudited) CURRENT ASSETS Cash $ 3,430 $ 7,526 Accounts and notes receivable, net 333,139 255,414 Inventories 364,265 358,498 Prepaid expenses 21,462 25,631 ------------ ------------- Total Current Assets 722,296 647,069 ------------ ------------- PROPERTY AND EQUIPMENT Manufacturing 149,703 149,703 Furniture and Fixtures 169,747 169,747 Capitalized Lease 204,814 204,814 Leasehold Improvements 5,010 5,010 Vehicle 10,820 10,820 ------------ ------------- 540,094 540,094 Less accumulated depreciation 374,156 362,271 ------------ ------------- Total Property and Equipment 165,938 177,823 OTHER ASSETS Deferred Financing Costs 6,169 8,126 Other 2,859 2,859 ------------ ------------- 9,028 10,985 Total Assets $ 897,262 $ 835,877 ------------ ------------- ------------ -------------
See notes to financial statements 2 PART I - FINANCIAL INFORMATION (CONTINUED) OZO DIVERSIFIED AUTOMATION, INC. BALANCE SHEETS (CONTINUED) LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, December 31, 1998 1997 (Unaudited) CURRENT LIABILITIES Current portion of notes payable and Capitalized Lease Obligation $ 280,126 $ 280,036 Accounts payable and accrued expenses 371,437 401,687 Note payable Bank 27,415 27,415 Note payable - Officer 75,968 0 ------------ ----------- Total Current Liabilities 754,946 709,138 ------------ ----------- LONG TERM DEBT AND CAPITALIZED LEASE OBLIGATION 111,981 126,731 ------------ ----------- Total Liabilities 866,927 835,869 ------------ ----------- SHAREHOLDERS' EQUITY 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 478,164 shares 47,816 47,816 Capital in excess of par value 1,193,004 1,193,004 Accumulated deficit (1,210,485) (1,240,812) ------------- ----------- Total Shareholders' Equity 30,335 8 Total Liabilities & Stockholders' Equity $ 897,262 $ 835,877 ------------- ----------- ------------- -----------
See notes to financial statements 3 OZO DIVERSIFIED AUTOMATION, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended March 31, 1998 1997 Net Sales $ 583,146 $ 676,044 Cost of Sales 340,093 386,659 ------------ ------------ Gross Profit 243,053 289,385 ------------ ------------ Operating Expenses: Marketing & Sales 57,583 105,096 Research & Development 40,820 37,914 General and Administrative 114,322 114,840 ------------ ------------ 212,725 257,850 ------------ ------------ Income before taxes 30,328 31,535 Provision for Income Taxes (6,066) (6,307) Tax Benefit of Operating Loss Carry Forward 6,066 6,307 ------------ ------------ NET INCOME $ 30,328 $ 31,535 ------------ ------------ ------------ ------------ EARNINGS PER COMMON SHARE $ 0.06 $ 0.07 ------------ ------------ ------------ ------------ EARNINGS PER COMMON SHARE ASSUMING DILUTION $ 0.04 $ 0.06 ------------ ------------ ------------ ------------ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 478,164 458,164 ------------ ------------ ------------ ------------ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ASSUMING DILUTION 818,427 573,164 ------------ ------------ ------------ ------------
See notes to financial statements 4 OZO DIVERSIFIED AUTOMATION, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, 1998 1997 Cash flows from operating activities: Net Income $ 30,328 $ 31,535 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 11,885 11,412 Amortization of deferred financing costs 1,957 1,957 Other 0 (2,082) Decrease (increase) in assets: Accounts receivable (77,725) (94,820) Inventories 5,767 96,139 Prepaid expenses 4,168 10,885 Increase (decrease) in accounts payable and accrued expenses (30,250) 39,465 ----------- ----------- Net cash (used) provided by operating activities (65,405) 15,561 ----------- ----------- Cash flows from investing activities: Capital Expenditures 0 (4,476) ----------- ----------- Net cash (used) by investing activities 0 (4,476) ----------- ----------- Cash flows from financing activities: Payments of long term debt and capitalized lease obligations (14,600) (12,929) Proceeds from short term borrowings 0 60,000 Payment of short term borrowings 0 (54,000) Proceeds from officer loan 85,000 (80,000) Payment of officer loan (9,091) 74,094 ----------- ----------- Net cash provided (used) by financing activities 61,309 (12,835) ----------- ----------- Net increase (decrease) in cash (4,096) (1,750) Cash at beginning of period 7,526 3,111 ----------- ----------- Cash at end of period $ 3,430 $ 1,361 ----------- ----------- ----------- -----------
See notes to financial statements 5 OZO DIVERSIFIED AUTOMATION, INC. NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED) The unaudited financial statements included herein were prepared from the records of the Company in accordance with Generally Accepted Accounting Principles and reflect all adjustments which are, in the opinion of Management, necessary to provide a fair statement of the results of operations and financial position for the interim periods. Such financial statements generally conform to the presentation reflected in the Company's Form 10-KSB filed with the Securities and Exchange Commission for the year ended December 31, 1997. The current interim period reported herein should be read in conjunction with the Company's Form 10-KSB subject to independent audit at the end of the year. The results of operations for the three months ended March 31, 1998 are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. 6 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the first three months ended March 31,1998, the Company had revenues of $583,146, a 13.7% decrease from revenues of $676,044 recorded for the first quarter of 1997. The decrease in revenues is primarily a result of weak economic conditions in Asia, as well as capital spending curtailments on the part of large OEMs in North America (again, directly attributable to the uncertainty of business conditions in Asia). While Management cannot predict a timetable for a recovery in the Far Eastern markets, it is believed that the weak business conditions in Asia (relative to the electronics industry), will extend well into the second half of the year. Management is in the process of refocusing its sales efforts in markets that remain largely unaffected by the crisis in Asia. Despite the decrease in total revenues reported during the first quarter of 1998, the Company posted earnings of $30,328, a 3.8% reduction from net income of $31,535 reported during the same period in 1997. Earnings per share during this period dropped slightly to $0.06, compared to $0.07 per share which was recorded during first quarter of 1997. The Company has been able to maintain its earnings performance in the first quarter despite weak market conditions in Asia, due to an aggressive cost containment effort initiated by Management. In anticipation of the detrimental effect of the Asian crisis, internal measures were taken to reduce fixed costs and to match expense spending patterns against projected revenues. The Company will voluntarily enforce its austerity program for as long as conditions warrant. From a business perspective, the Company continues to focus on the depaneling application as the primary market for its premium routing equipment, the PanelMASTER 18HS and the PanelROUTER 16SI. Both of these strategic product groups have been upgraded substantially in the past nine months in order to achieve a superior performance advantage against competitors' equipment. In March, the Company attended the NEPCON West trade show in Anaheim, California, where both products were displayed and demonstrated. Feedback from trade show attendees was positive, and the Company expects to continue its aggressive marketing campaign which includes attending the NEPCON East trade show in Boston in June. In addition, the Company has taken steps to grow and optimize its frontline sales force in the U.S. and abroad. During the first four months of 1998 the Company added three new sales representative organizations in North America. Other sales and distribution agreements are expected to be implemented overseas in the upcoming months. The Company's Current Liabilities as of March 31, 1998 are $754,946, approximately $32,650 higher than Current Assets of $722,296. Included in the Current Liabilities as of March 31, 1998 are $240,000 in notes which became current as of December 30, 1997. As disclosed in the 1997 10-KSB report, Management is in the process of securing a refinancing package for the Company's debt, and expects to have the issue resolved well in advance of the December 30, 1998 due date. Cash flow from operating activities was ($65,405) for the quarter ended March 31, 1998, as compared to $15,561 for the same period in 1997. This was predominantly a result of payment delays from two customers on orders that were shipped on time in the first quarter. In both cases, payments were received in May, and the accounts were brought current. Accordingly, the Company borrowed $75,909 from an officer of the Company primarily to cover the cash flow deficiency. 7 As of May 8, 1998 the Company had a backlog of open orders of approximately $237,000, compared to a backlog of $409,000 on the same date in 1997. 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 March 31, 1998. 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 Chief Financial Officer Dated: May 15, 1998 9 EX-27 2
5 3-MOS DEC-31-1998 MAR-31-1998 3,430 0 333,139 0 364,265 722,296 540,094 374,156 897,262 754,946 0 0 0 47,816 (17,481) 897,262 583,146 583,146 340,093 340,093 0 0 0 30,328 0 0 0 0 0 30,328 .06 .04 Although the Company's tax liability in first quarter 1998 was $6,066, this amount was offset in its entirety by loss carryforwards from previous years. The net tax liability for the quarter ending March 31, 1998 is zero.
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