-----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, Ch8iPUJ32hzCBCTz1/q5uiIFHjVjJu3coCXlvHMrF1fOx61y7Old/glPnil1xQFE sJEIbcI3vWH45pg8zu56qw== 0000950152-97-008257.txt : 19971125 0000950152-97-008257.hdr.sgml : 19971125 ACCESSION NUMBER: 0000950152-97-008257 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971124 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CABLE LINK INC CENTRAL INDEX KEY: 0000893139 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 311239657 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-23111 FILM NUMBER: 97727340 BUSINESS ADDRESS: STREET 1: 280 COZZINS STREET CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142213131 10QSB 1 CABLE LINK, INC. 10-QSB 1 U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB (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 number 000-23111 ------------- Cable Link, Inc. ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Ohio 31-1239657 - ------------------------------ ------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 280 Cozzins Street, Columbus, Ohio 43215 ---------------------------------------- (Address of principal executive offices) (614) 221-3131 --------------------------- (Issuer's telephone number) 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 No X --- --- State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 1,632,302 shares of no par common stock were outstanding at September 30, 1997. Transitional Small Business Disclosure Format (Check one): Yes X ; No --- --- 2 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS CABLE LINK, INC. COMPARATIVE STATEMENTS OF INCOME (UNAUDITED)
3 Months Ending September 30 9 Months Ending September 30 1997 1996 1997 1996 ---------- ---------- ---------- ---------- Net Sales $2,720,514 $1,822,359 $7,574,049 $6,764,982 Cost of Goods Sold 1,619,053 1,345,122 4,852,959 4,437,102 Operating Expenses 664,386 732,070 1,935,648 2,250,436 ---------- ---------- ---------- ---------- Total Expenses 2,283,439 2,077,192 6,788,607 6,687,538 Income From Operations 437,075 (254,833) 785,442 77,444 Interest Expense (14,354) (21,052) (49,747) (63,114) Other Income 493 7,711 2,552 23,052 Income (Loss) Before Taxes 423,214 (268,174) 738,247 37,382 Provision For Taxes 135,000 28,500 135,000 16,400 ---------- ---------- ---------- ---------- Net Income (Loss) $ 288,214 $ (239,674) $ 603,247 $ 20,982 Weighted Average Common Shares and Equivalents 1,632,302 1,384,802 1,632,302 1,384,802 Net Earnings (Loss) Per Share 0.18 (0.17) 0.38 0.02
Note: Net earnings and number of Shares are restated to reflect a 3 for 2 stock split effective January 21, 1997 and a 10% stock dividend effective August 1, 1997. The shares also reflect the purchase of 165,000 (post split) shares by Axxess International Group as well as 82,500 shares exercised by Axxess on July 11, 1997. 1 3 CABLE LINK, INC. COMPARATIVE BALANCE SHEETS
1997 1996 SEPTEMBER 30 December 31 (UNAUDITED) (Audited) ------------ ----------- ASSETS Current Assets Cash $ 43,534 $ 115,796 Accounts Receivable 1,270,328 838,985 Inventories 1,178,601 1,176,309 Prepaid Expenses 164,847 129,609 ---------- ---------- Total Current Assets 2,657,310 2,260,699 ---------- ---------- Property and Equipment Cost 1,442,946 1,323,440 Accumulated Depreciation (728,815) (604,311) ---------- ---------- Total Property and Equipment 714,131 719,129 ---------- ---------- Total Assets $3,371,441 $2,979,828 ========== ========== LIABILITIES Current Liabilities Accounts Payable, Trade $ 889,638 $1,313,344 Current Portion Notes Payable 27,321 101,703 Bank Revolving Credit Line 385,085 607,090 Accrued Expenses 355,470 185,103 ---------- ---------- Total Current Liabilities 1,657,514 2,207,240 Long Term Debt 136,417 106,762 ---------- ---------- Total Liabilities 1,793,931 2,314,002 ---------- ---------- STOCKHOLDER'S EQUITY Current Stockholder's Equity Common Stock 1,538,235 1,229,798 Retained Earnings (deficit) 39,275 (563,972) ---------- ---------- Total Stockholder's Equity 1,577,510 665,826 ---------- ---------- Total Liabilities and Equity $3,371,441 $2,979,828 ========== ==========
2 4 CABLE LINK, INC. CASH FLOW STATEMENT Nine Months Ended September 30,
1997 1996 ---------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 603,247 $ 20,982 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 124,504 83,233 (Increase) decrease in operating assets: Accounts receivable (533,765) 24,121 Inventories (2,292) (32,702) Prepaid expenses 67,184 69,355 Increase (decrease) in operating liabilities: Accounts payable (423,706) (2,218) Accrued expenses 170,367 (158,054) --------- --------- Net cash provided by operating activities 5,539 4,717 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (119,506) (236,413) --------- --------- Net cash used in investing activities (119,506) (236,413) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from sales of common stock 308,437 61,600 Repayments on line of credit, net (222,005) (1,738) Issuance of long-term debt 29,655 106,420 Principal payments on debt (74,382) (59,799) --------- --------- Net cash provided by financing activities 41,705 106,483 --------- --------- Net decrease in cash (72,262) (125,213) Cash - beginning of period 115,796 149,783 --------- --------- Cash - end of period $ 43,534 $ 24,570 ========= ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 49,747 $ 63,114
3 5 CABLE LINK, INC. NOTES TO FINANCIAL STATEMENTS GENERAL The interim financial statements have been prepared by Cable Link, Inc. (the Registrant) without an audit and, in the opinion of the management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the financial position of the Registrant as of September 30, 1997; the results of operations for the three months and nine months ended September 30, 1997 and 1996; and cash flows for the nine months ended September 30, 1997. Interim results are not necessarily indicative of results for a full year. The balance sheet as of December 31, 1996 has been derived from the financial statements that have been audited by the Registrant's independent public accountants. The financial statements and notes are condensed as permitted by Form 10-QSB and do not contain certain information included in the annual financial statements and notes of the Registrant. The financial statements and notes included herein should be read in conjunction with the financial statements and notes included in the Registrant's annual report. COMMON STOCK On January 8, 1997, the Registrant entered into an agreement with another entity (the Buyer) to purchase 165,000 shares of common stock of the Registrant and warrants to purchase an additional 165,000 shares of common stock for $200,000. The warrants are fully vested and may be exercised in increments of 1,000 shares. The warrants have been separated into four groups of 25,000 shares each with exercise prices of $2.25, $2.75, $3.25 and $3.75. The expiration dates for these four warrant groups are six months, six months, nine months and nine months after January 8, 1997, the effective date of the offering. The warrants issued are transferrable by the Buyer under any manner that is in compliance with all applicable security laws. In July 1997, 82,500 warrants were exercised at an average price of $1.51 per share. The Registrant declared a 3 for 2 stock split on January 21, 1997 and a 10% stock dividend on August 1, 1997. On September 19, 1997, the Registrant filed a Form 10-SB to register its common stock under Section 12(g) of The Securities Act of 1934 and an amendment thereto on November 17, 1997. The Form 10-SB became effective November 18, 1997. NEW ACCOUNTING PRONOUNCEMENTS In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 128 "Earnings per Share." SFAS No. 128 establishes standards for computing and presenting earnings per share and applies to entities with publicly held common stock. This statement is effective for fiscal years ending after December 15, 1997 and early adoption is not permitted. When adopted, the statement will require restatement of prior years' earnings per share. The Registrant will adopt this statement for the year ending December 31, 1997. The effect of adopting this standard on earnings per share is not expected to materially affect earnings per share. 4 6 MANAGEMENT DISCUSSION AND ANALYSIS The following information is provided as an optional disclosure pursuant to Item 5 of Part II. Result of Operations Net sales Net sales for third quarter ending September 30, 1997 were $2,720,514 compared to $1,822,359 for the third quarter ending September 30, 1996. This represents an increase of 49% or $898,155 over the previous year. Sales for the nine months ending September 30, 1997 were $7,574,049 versus $6,764,982 for September 30, 1996. This represents an increase of 12% or $809,067 over the previous year. The increase in sales is primarily due to an expanded customer base and an increase in the company's repair and refurbishing business. Cost of goods sold The cost of goods sold decreased to 59.5% of sales in the third quarter of 1997 from 73.8% for the third quarter 1996. For the nine months ending September 30, 1997 the cost of goods sold decreased to 64% of sales compared to 65.6% of sales for the nine months ending September 30,1996. The majority of the reduction in cost of goods sold is production labor expenses. The production labor costs declined in the third quarter as a percent of sales to 12.1% from 23.3% in comparison to last year's third quarter. The labor cost has decreased to 13.9 percent of sales through the third quarter 1997 from 18.0 percent through the same period in 1996. This decrease in labor cost is primarily the result of a reduction in labor force as well as increased efficiencies and new procedures that have led to improved productivity of employees. Operating expenses The operating expenses decreased to 24.4% of sales in the third quarter 1997 from 40.2% for third quarter 1996. In 1996 the operating expenses, as a percent of sales were 33.3% for nine months ending September 30 and have decreased to 25.5% of sales for the nine months ending September 30,1997. The decrease was due to a reduction in administrative personnel. Job procedures were implemented which increased the efficiencies and reduced costs. Income from operations Income from operations increased to $437,075 or 16.1% of sales for the third quarter ending September 30,1997 compared to a loss of ($254,833) in the third quarter 1996. The income from operations increased to $785,442 or 10.4% of sales for the first nine months ending September 30,1997 as compared to $77,444 or 1.1% of sales through the same period in 1996. Net income for the third quarter of 1997 was $288,214 or $.18 per share versus a loss of ($239,674) or ($.17) per share for the third quarter of 1996. Per share earnings for the nine months ending September 30, 1997 were $.37 versus $.02 ending September 30, 1996. The company's increased profitability over the past nine months ending September 30, 1997 has exhausted all net operating loss carryforward that was generated from prior years. Through the first nine months in 1997 the company has expensed $135,000 for federal, state and local taxes. As a result of a 12% increase in sales and improved gross profit margin, and reduced costs the company has generated earnings of $603,247 or 8.0% of sales through the first nine months in 1997 as compared to $20,982 or 0.3% of sales the nine months ending September 30, 1996. Liquidity and Capital Resources The company finances its operations primarily through internally generated funds and the bank line of credit. Bank borrowings decreased which resulted in lower interest expense. As a result of the increase in sales, accounts receivable increased $523,765 over the December 31, 1996 balance. Inventory remained constant. As a result of improved cash flow, accounts payable decreased $423,706. Accrued expenses increased $120,367 due to income taxes and bonuses. Property and equipment purchases decreased in 1997 and are expected to be below 1996 expenditures for the remainder of 1997. The company declared a 10% stock dividend on August 1, 1997. On January 8, 1997, the company entered into an agreement with another entity (the Buyer) to purchase 165,000 shares of common stock and warrants to purchase additional 165,000 shares of common stock for $200,000. As of September 30, 1997 the company has sold 165,000 shares and warrants to purchase 82,000 shares were exercised for a total working capital of $325,000. The company believes that its available financial resources are adequate to meet its foreseeable working capital, debt service and capital expenditure requirements. ITEM 6 - EXHIBITS, LISTS AND REPORTS ON FORM 8-K a) Exhibits: 2. Articles of Incorporation and by-laws Exhibit 2.1 - Articles of Incorporation (incorporated by reference to Exhibit 2.1 to Registrant's Form 10-SB dated September 19, 1997; Commission File No. 000-23111 (the "Form 10-SB")). Exhibit 2.2 - Code of Regulations (incorporated by reference to Exhibit 2.2 to the Form 10-SB). 5 7 27. Financial data schedule (submitted electronically for SEC information purposes only). b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended September 30, 1997. SIGNATURES In accordance with the requirements of the Exchange Act, the registrants caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. /s/ Bob Binsky 11/24/97 - ----------------------------------------------- --------------------- Bob Binsky, Chief Executive Officer and Date Chairman of the Board /s/ Brenda Thompson 11/24/97 - ----------------------------------------------- --------------------- Brenda Thompson, President and Chief Date Financial Officer 6 8 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION PAGE NUMBER - ------- ----------- ----------- 2.1 Articles of Incorporation (incorporated by reference to Exhibit * 2.1 to Registrant's Form 10-SB dated September 19, 1997; Commission File No. 000-23111 (the "Form 10- SB")). 2.2 Code of Regulations (incorporated by reference to Exhibit 2.2 to * the Form 10-SB). 27. Financial data schedule (submitted electronically for SEC information purposes only).
* - Incorporated by reference EX-27 2 EXHIBIT 27
5 The schedule contains summary financial information extracted from the Registrant's unaudited financial statements for the nine months ended September 30, 1997 and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1997 SEP-30-1997 43,534 0 1,270,328 0 1,178,601 2,657,310 1,442,946 728,815 3,371,441 1,657,514 0 0 0 1,538,235 39,275 3,371,441 7,574,049 7,576,601 4,852,959 6,788,607 0 0 49,747 738,247 135,000 603,247 0 0 0 603,247 .38 .27
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