-----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, Oa3orVje9qPphStEhR6bmUHnHGZhllud0LYkRHRK5pwdn0Zj6li3rRGB9JkB2ska 0TPf+5mPb7ap6j9T4BOw0w== 0000921895-96-000331.txt : 19960814 0000921895-96-000331.hdr.sgml : 19960814 ACCESSION NUMBER: 0000921895-96-000331 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRINITECH SYSTEMS INC CENTRAL INDEX KEY: 0000099047 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 061344888 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-21324 FILM NUMBER: 96610249 BUSINESS ADDRESS: STREET 1: 333 LUDLOW STREET CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 2034258000 10QSB 1 QUARTERLY REPORT ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark one) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 1996 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to________ COMMISSION FILE NO. 0-21324 TRINITECH SYSTEMS, INC. (Exact name of registrant as specified in its charter) NEW YORK 06-1344888 (State of incorporation) (I.R.S. Employer identification number) 333 LUDLOW STREET, STAMFORD, CONNECTICUT 06902 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (203) 425-8000 --------------------------- 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 |_| 7,306,530 shares of Common Stock were issued and outstanding as of August 8, 1996. ================================================================================ PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements TRINITECH SYSTEMS, INC. - -------------------------------------------------------------------------------- BALANCE SHEETS - ---------------------------------------------
(Unaudited) June 30, December 31, ASSETS 1996 1995 ----------- ----------- CURRENT ASSETS: Cash $ 1,239,043 $ 1,258,119 Accounts receivable 1,956,192 2,409,434 Inventories 1,182,491 1,000,450 Prepaid expenses and other 294,665 201,849 ----------- ----------- Total Current Assets 4,672,391 4,869,852 ----------- ----------- EQUIPMENT - net of accumulated depreciation of $344,825 and $283,306 at June 30 and December 31, respectively 390,028 403,512 ----------- ----------- OTHER ASSETS - net of accumulated amortization of $644,051 and $565,107 at June 30 and December 31, respectively 613,061 596,561 ----------- ----------- TOTAL $ 5,675,480 $ 5,869,925 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable - trade $ 750,247 $ 353,129 Accrued expenses 163,287 454,449 Current portion of term loan payable 16,667 16,667 Advance billings 121,805 120,634 Payroll and other taxes payable 16,899 25,633 ----------- ----------- Total Current Liabilities 1,068,905 970,512 TERM LOAN PAYABLE 20,833 29,167 ----------- ----------- Total Liabilities 1,089,738 999,679 ----------- ----------- COMMITMENTS: STOCKHOLDERS' EQUITY: 10% Convertible preferred stock - par value $1.00; 1,000,000 shares authorized; -0- outstanding -- -- Common stock - par value $.001; 15,000,000 shares authorized; 7,306,530 and 7,272,530 shares issued and outstanding in 1996 and 1995, respectively 7,307 7,273 Additional paid-in capital 5,993,789 5,920,203 Accumulated deficit (1,415,354) (1,057,230) ----------- ----------- Total Stockholders' Equity 4,585,742 4,870,246 ----------- ----------- TOTAL $ 5,675,480 $ 5,869,925 =========== ===========
See Notes to Financial Statements. 2 TRINITECH SYSTEMS, INC. - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS (Unaudited) - ---------------------------------------------
--- Three Months Ended --- --- Six Months Ended --- June 30, June 30, June 30, June 30, 1996 1995 1996 1995 ----------- ------------ ----------- ----------- REVENUES: Sales $ 1,788,648 $ 1,014,691 $ 2,222,650 $ 1,832,656 Service contracts 180,219 135,277 349,313 223,607 ----------- ----------- ----------- ----------- Total Revenues 1,968,867 1,149,968 2,571,963 2,056,263 COST OF SALES AND SERVICE 1,217,249 531,922 1,536,937 958,712 ----------- ----------- ----------- ----------- GROSS PROFIT 751,618 618,046 1,035,026 1,097,551 ----------- ----------- ----------- ----------- EXPENSES: Selling, general and administrative 708,646 624,932 1,353,995 1,133,220 Depreciation and amortization 38,347 33,564 76,214 65,902 ----------- ----------- ----------- ----------- Total Expenses 746,993 658,496 1,430,209 1,199,122 ----------- ----------- ----------- ----------- INCOME (LOSS) FROM OPERATIONS 4,625 (40,450) (395,183) (101,571) OTHER INCOME - NET 19,529 12,840 37,059 30,515 ----------- ----------- ----------- ----------- NET INCOME (LOSS) $ 24,154 ($ 27,610) ($ 358,124) ($ 71,056) =========== =========== =========== =========== NET INCOME (LOSS) PER COMMON SHARE $ 0.00 ($ 0.00) $ (0.05) $ (0.01) =========== =========== =========== =========== AVERAGE COMMON SHARES OUTSTANDING 7,295,294 7,171,197 7,284,704 7,141,044 =========== =========== =========== ===========
See Notes to Financial Statements. 3 TRINITECH SYSTEMS, INC. - -------------------------------------------------------------------------------- STATEMENTS OF CASH FLOWS (Unaudited) - --------------------------------------------- ---Six Months Ended --- June 30, June 30, 1996 1995 ------------ ------------ OPERATING ACTIVITIES: Net loss ($ 358,124) ($ 71,056) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 222,211 179,019 Changes in assets and liabilities: Accounts receivable 453,242 (403,765) Inventories (182,041) (30,035) Prepaid expenses (92,816) (9,220) Accounts payable - trade 397,118 322,554 Deferred revenue 1,171 (75,592) Payroll and other taxes payable (8,734) 8,913 Accrued expenses (291,162) 87,696 ----------- ----------- Net cash provided by operating activities 140,865 8,514 ----------- ----------- INVESTING ACTIVITIES: Payments for equipment (48,034) (82,456) Payments for other assets (177,193) (180,608) ----------- ----------- Net cash used in investing activities (225,227) (263,064) ----------- ----------- FINANCING ACTIVITIES: Issuance of common stock 73,620 270,625 Repayment of borrowings (8,334) 0 ----------- ----------- Net cash provided by financing activities 65,286 270,625 ----------- ----------- INCREASE (DECREASE) IN CASH (19,076) 16,075 CASH, BEGINNING OF PERIOD 1,258,119 1,035,276 ----------- ----------- CASH, END OF PERIOD $ 1,239,043 $ 1,051,351 =========== =========== See Notes to Financial Statements. 4 TRINITECH SYSTEMS, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) - -------------------------------------------------------------------------------- 1. BASIS OF PRESENTATION The accompanying financial statements have been prepared by the Company without audit (except for the balance sheet information as of December 31, 1995 which has been derived from the Company's audited financial statements) in accordance with generally accepted accounting principles for interim financial information and instructions to Form 10-QSB and Item 310 (b) of Regulation S-B. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying financial statements do not include certain footnotes and financial presentations normally required under generally accepted accounting principles and, therefore, should be read in conjunction with the Company's 1995 audited financial statements. Results of operations for the period ended June 30, 1996 are not necessarily indicative of operating results for the fiscal year. 2. INVENTORIES Inventories are stated at the lower of cost (first-in, first-out) or market. Inventories consisted of the following: June 30, 1996 December 31, 1995 ------------- ----------------- Parts $ 794,825 $ 634,003 Finished goods 387,666 366,447 ----------- ----------- Total $1,182,491 $ 1,000,450 ========== =========== 3. PER SHARE INFORMATION Net loss per common share is based on the weighted average number of common shares outstanding. Common stock equivalents have not been included in the per share calculation because their effect is anti-dilutive. 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The Company commenced its present business operations in January 1991 through the acquisition of a software license for its Guided-Input(R) Trinitech TouchPad(R) System. The following discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere herein. Historical results and percentage relationships are not necessarily indicative of the operating results for any future period. Revenues Revenues for the three and six months ended June 30, 1996 were $1,968,867 and $2,571,963 as compared to $1,149,968 and $2,056,263 in the comparable periods in 1995, an increase of 71% and 25%, respectively. The increase in revenues was principally due to second quarter installation of approximately 550 units of the Trinitech Touch Vending Terminal(TM) products to ATG, the leading Swedish off-track betting operation. At June 30, 1996, the Company had a commitment from ATG to supply an additional 1,500 units under contract, which delivery the Company expects to complete during 1996. Approximately 15% and 16% of the Company's sales revenues for the three and six month periods ended June 30, 1996 were derived from software installations as compared to approximately 32% and 31% during the comparable periods in 1995. Revenue from export sales approximated $1,520,000 (85% of sales) and $1,593,000 (72% of sales) during the three and six months ended June 30, 1996 as compared to $207,000 (20% of sales) and $471,000 (26% of sales) during the comparable periods in 1995. In addition, revenues from service contracts increased by 33% and 56% in the three and six month periods ended June 30, 1996 over the comparable 1995 periods. The increase in service revenue resulted from increases sales of hardware and software products during the past year. The Company did not experience any significant price changes in its product lines during the three and six month periods ended June 30, 1996 and 1995. At June 30, 1996, the Company's order backlog totaled approximately $3,700,000 which it expects to complete delivery during 1996. Cost of Sales and Service and Gross Profit The Company's cost of sales and service is principally comprised of labor, materials and overhead. Gross profit as a percentage of total revenues were 38.2% and 40.2% for the three and six month periods ended June 30, 1996 as compared to 53.7% and 53.4% during the comparable periods in 1995. Cost of sales and service increased to $1,217,249 and $1,536,937 in the three and six months ended June 30, 1996 from $531,922 and $958,712 in the three and six months ended June 30, 1995 as a result of the increase in revenues noted above (as a percentage of gross 6 revenues, cost of sales and service increased from 46.3% and 46.6% in the three and six months ended June 30, 1995 to 61.8% and 59.8% in the three and six months ended June 30, 1996). The lower gross profit experienced by the Company during 1996 directly resulted from the lower margins associated with the Company's touch vending terminal products sold to ATG. The Company continues to maintain higher margins (in the 50% + range) in its core business groups that serve the financial trading community. The Company obtains its materials and supplies from a variety of vendors in the US and far east. Although the Company experienced slight price increases in certain component parts obtained from the far east, these increases were partially offset by price reductions in other product components due to increased volumes purchased. Selling, General and Administrative Selling, general and administrative expenses for the three and six month periods ended June 30, 1996 were $708,646 and $1,353,995 as compared to $624,932 and $1,133,220 in the comparable periods in 1995, an increase of 13.4% and 19.5%, respectively. Such increases reflected the continued expansion of operations in both the U.S and in London. A significant portion of the costs of such expansion, including personnel costs, was not realized until mid 1995. The Company, during the past several years, has spent a considerable effort in developing a variety of turn-key systems. Management believes that this development effort will enhance the Company's product portfolio as its grows in the future. The Company has also continued its marketing programs for 1996, primarily focusing on core product marketing and public relations activities and representation at technological exhibitions planned throughout the year. Research and development expenses for the three and six month periods ended June 30, 1996 approximated $60,000 and $124,000 as compared to $14,700 and $31,000 in the comparable periods in 1995 and are included in selling, general and administrative expenses. Other Income Other income consists principally of interest earned on cash balances and sublease income earned. The Company leases a portion of its corporate office facility under a three year sublease which expires on April 30, 1997. Sublease rental income earned during the three and six month periods ended June 30, 1996 and 1995 approximated $9,700 and $19,400. Net Income (Loss) Net income for the three months ended June 30, 1996 was $24,154 ($0.00 per share) as compared to a net loss of $27,610 ($0.00 per share) in the three months ended June 30, 1995. Net loss for the six months ended June 30, 1996 totaled $358,124 ($0.05 per share) as compared to a net loss of $71,056 ($0.01 per share) in the six months ended June 30, 1995. This increase in net loss, during the six month period ended June 30, 1996, principally resulted from lower margins experienced on the sale of the Company's touch vending terminal products to ATG. See "Revenues" and "Cost of Sales and Service and Gross Profit" above. 7 Management has made a considerable effort with respect to an expansion of its operations and development of various turn-key systems which began in 1993 and continues into 1996. The Company believes that this expansion of personnel, facilities and product portfolio will better position the Company and facilitate its future growth. LIQUIDITY AND CAPITAL RESOURCES Since its formation, the Company's primary source of working capital has been private offerings of its securities, through which the Company has raised approximately $6.0 million of working capital. At June 30, 1996, cash balances decreased to $1,239,043 from $1,258,119 at December 31, 1995. The Company's current assets at June 30, 1996 exceeded its current liabilities by approximately $3,603,000. As of July 31, 1996, the Company has collected approximately $709,000 of its outstanding receivable balances at June 30, 1996. The Company at June 30, 1996 had long-term debt totaling $20,800 which represents a secured term loan on the purchase of development equipment. In addition, at June 30, 1996, the Company had no material commitments for capital expenditures or inventory purchases. The Company had available a one million dollar bank line of credit facility for the purpose of financing accounts receivable and, at June 30, 1996, the Company had not used the line of credit facility. The line of credit, which was secured by accounts receivable and inventory, expires on April 30, 1997. Interest on the line of credit was based on the bank's prime rate plus one percent. The Company believes that with its available capital, line of credit facility and anticipated funds generated from operations, it will be able to fund its cash needs through the end of 1996 without the need for additional capital or financing. The Company intends to utilize its positive financial position to internally finance its continuing research and development activities and anticipated sales growth. The Company's financial requirements and its ability to meet them thereafter will depend largely on its future financial performance. However, in the event the Company's operations do not generate cash to the extent currently anticipated by management of the Company and grow more rapidly than anticipated, it is possible that the Company would require additional funds beyond 1996. At this time, the Company does not know what sources, if any, would be available to it for such funds, if required. In addition, at June 30, 1996, the Company has warrants outstanding for the purchase of 475,087 shares of its Common stock. Assuming the exercise of all such outstanding Warrants, the Company would realize approximately $1,140,000 in gross proceeds. 8 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. Dated: August 12, 1996 TRINITECH SYSTEMS, INC. (Registrant) By: /s/ Peter Kilbinger Hansen ------------------------------- Peter Kilbinger Hansen Chairman of the Board and President (Chief Executive Officer) By: /s/ William E. Alvarez, Jr. ------------------------------- William E. Alvarez, Jr. Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) 9 EX-27 2 ARTICLE 5 FDS FOR 10-QSB
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FORM 10-QSB FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1995 JAN-01-1996 JUN-30-1996 1,239,043 0 1,956,192 0 1,182,491 4,672,391 734,853 344,825 5,675,480 1,068,905 0 0 0 7,307 5,993,789 5,675,480 1,788,648 1,968,867 1,217,249 1,217,249 0 0 0 24,154 0 24,154 0 0 0 24,154 .00 .00
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