UNITED STATES
SECURITIES AND EXCHANGE COMMISION
WASHINGTION, 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 March 31, 1996
--------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For the transition period from to
--------------- ---------------
Commission file number 1-14072
PEN INTERCONNECT, INC.
----------------------
(Exact name of small business issuer as specified in its charter)
UTAH 87-0430260
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2351 South 2300 West, Salt Lake City, UT 84119
(Address of Principal Executive Offices) (Zip Code)
(801) 973-6090
(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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
As of May 1, 1996, the issuer had 2,700,000 shares of its common stock,
par value $0.01 per share, issued and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]
<PAGE>
FORM 10-QSB
PEN INTERCONNECT, INC.
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
Financial Information 3
Condensed Balance Sheets at
March 31, 1996 and September 30, 1995 4-5
Condensed Statements of Earnings for the
Quarter Ended March 31, 1996 and 1995 and
Six month period ended March 31, 1996 and 1995 6
Condensed Statements of Cash Flows for the Six
month Periods Ended March 31, 1996 and 1995 7-9
Notes to Condensed Financial Statements 10-12
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 13-15
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 16
Item 2 Changes in the Securities 16
Item 3 Defaults Upon Senior Securities 16
Item 4 Submission of Matters to a Vote of Security Holders 16
Item 5 Other Information 16
Item 6(a). Exhibits 16
Item 6(b). Reports on Form 8-K 16
Signatures 17
<PAGE>
PEN INTERCONNECT, INC.
PART I
FINANCIAL INFORMATION
ITEM 1. INTERIM CONDENSED FINANCIAL STATEMENTS
Pen Interconnect, Inc. (the "Issuer"), has included the unaudited
condensed balance sheet of the Issuer as of March 31, 1996 and audited
balance sheet as of September 30, 1995 (the Issuer's most recent fiscal
year), unaudited condensed statements of earnings for the three and six
months ended March 31, 1996 and 1995, and unaudited condensed statements
of cash flows for the six months ended March 31, 1996 and 1995, together
with unaudited condensed notes thereto. In the opinion of management of
the Issuer, the financial statements reflect all adjustments, all of
which are normal recurring adjustments, considered necessary to fairly
present the financial condition, results of operations and cash flows of
the Issuer for the interim periods presented. The financial statements
included in this report on Form 10-QSB should be read in conjunction
with the audited financial statements of the Issuer and the notes
thereto included in the annual report of the Issuer on Form 10-KSB for
the year ended September 30, 1995. The results of operations for the
three and six months ended March 31, 1996 may not be indicative of the
results that may be expected for the year ending September 30, 1996.
3
<PAGE>
PEN INTERCONNECT, INC.
CONDENSED BALANCE SHEETS
ASSETS
March 31, September 30,
1996 1995
CURRENT ASSETS (Unaudited)
----------- ----------
Cash and cash equivalents $ 1,578,785 $ 376,488
Receivables (Note D)
Trade accounts, less allowance for doubtful
accounts of $34,995 and $12,500 at
March 31, 1996 and September 30, 1995
respectively. 3,465,818 2,192,368
Current maturities of notes receivable
Related party 13,186 13,894
Other 14,688 13,433
Inventories (Note B and D) 4,816,271 3,362,394
Prepaid expenses and other assets 320,893 135,789
Deferred tax asset 33,000 33,000
----------- ----------
Total current assets 10,242,641 6,127,366
PROPERTY AND EQUIPMENT, AT COST
Production equipment 2,115,385 1,825,867
Furniture and fixtures 614,648 419,144
Transportation equipment 49,373 36,008
Leasehold improvements 343,050 340,429
----------- ----------
Total property and equipment 3,122,456 2,621,448
Less accumulated depreciation 899,764 815,614
----------- ----------
Net property and equipment 2,222,692 1,805,834
OTHER ASSETS
Notes receivable, less current maturities
Related party 40,891 33,417
Other 36,336 39,905
Deferred offering costs (Note E) 294,158
Other 151,230 50,143
----------- ----------
Total other assets 228,457 417,623
----------- ----------
TOTAL ASSETS $12,693,790 $8,350,823
=========== ==========
The accompanying notes are an integral part of these statements.
4
<PAGE>
PEN INTERCONNECT, INC.
CONDENSED BALANCE SHEETS (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, September 30,
1996 1995
(Unaudited)
CURRENT LIABILITIES ----------- ----------
Notes payable (Notes C and E) $ 0.00 $1,600,000
Line of credit (Note D and F) 2,418,598 2,082,897
Current maturities of long-term obligations 212,925 199,200
Current maturities of capital leases 58,803 54,556
Accounts payable 2,050,480 1,443,395
Accrued liabilities 487,830 332,608
Income taxes payable 2,652 288,000
----------- ----------
Total current liabilities 5,231,288 6,000,656
LONG-TERM OBLIGATIONS, less current
maturities 239,355 151,000
CAPITAL LEASE OBLIGATIONS, less current
maturities 173,701 208,594
DEFERRED INCOME TAXES 194,000 194,000
----------- ----------
Total liabilities 5,838,344 6,554,250
STOCKHOLDERS' EQUITY (Notes D and E)
Preferred stock, $0.01 par value, authorized
5,000,000 shares, none issued - -
Common stock, $0.01 par value, authorized
50,000,000 shares, issued and outstanding
2,700,000 shares at March 31, 1996 and
1,700,000 shares at September 27,000 17,000
Additional paid-in capital 5,760,828 963,935
Retained earnings 1,067,618 815,638
----------- ----------
Total stockholders' equity 6,855,446 1,796,573
----------- ----------
Total liabilities and stockholders' equity $12,693,790 $8,350,823
=========== ==========
The accompanying notes are an integral part of these statements.
5
<PAGE>
<TABLE>
PEN INTERCONNECT, INC.
CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
Three months ended March Six months ended March 31,
1996 1995 1996 1995
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Net sales $5,442,143 $3,413,175 $10,012,456 $6,142,987
Cost of sales 4,596,168 2,654,625 8,159,524 4,768,466
---------- ---------- ----------- ----------
Gross profit 845,975 758,550 1,852,932 1,374,521
Operating expenses
Sales and marketing 327,296 157,443 591,603 318,161
Research and development 42,732 42,732
General and administrative 227,184 212,607 502,307 371,880
Depreciation and amortization 46,662 40,955 85,662 55,159
---------- ---------- ----------- ----------
Total operating expenses 643,874 411,005 1,222,304 745,200
---------- ---------- ----------- -----------
Operating income 202,101 347,545 630,628 629,321
Other income (expense)
Interest expense (89,868) (44,517) (204,230) (90,919)
Other, net 1,051 6,561 (16,978) 6,168
---------- ---------- ----------- ----------
Total other income (expense) (88,817) (37,956) (221,208) (84,751)
---------- ---------- ----------- ----------
Earnings before income taxes 113,284 309,589 409,420 544,570
Income taxes 41,600 129,630 157,440 215,004
---------- ---------- ----------- ----------
NET EARNINGS $ 71,684 $ 179,959 $ 251,980 $ 329,566
========== ========== =========== ==========
Earnings per common share $ 0.03 $ 0.11 $ 0.10 $ 0.19
========== ========== =========== ==========
Weighted average common shares
outstanding 2,700,000 1,700,000 2,450,000 1,700,000
========== ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
PEN INTERCONNECT, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR SIX MONTHS ENDED MARCH 31,
(Unaudited)
1996 1995
Increase(decrease) in cash and cash equivalents ---------- ----------
Cash flows from operating activities
Net earnings $251,980 $329,566
Adjustments to reconcile net earnings to net
cash used in operating activities
Depreciation and amortization 85,662 55,159
Allowance for bad debts 9,201 5,000
Deferred income taxes - 17,000
Changes in assets and liabilities:
Trade accounts receivable (1,102,020) (400,073)
Inventories (1,147,571) (364,069)
Prepaid expenses and other assets (209,306) (28,231)
Deferred offering costs 294,158 -
Accounts payable 350,903 121,932
Accrued liabilities 109,013 6,863
Income taxes payable (285,348) 192,000
---------- ----------
Total adjustments (1,895,308) (399,419)
---------- ----------
Net cash used in operating activities (1,643,328) (69,853)
---------- ----------
Cash flows from investing activities
Purchase of propery and equipment (457,253) (183,500)
Acquisition of net assets - (2,000,000)
Collections on notes receivable 8,195 890
Increase in notes receivable (12,647) (942)
---------- ----------
Net cash used in investing activities (461,705) (2,183,552)
---------- ----------
(Continued)
7
<PAGE>
PEN INTERCONNECT, INC.
CONDENSED STATEMENTS OF CASH FLOWS (Continued)
FOR SIX MONTHS ENDED MARCH 31,
(Unaudited)
1996 1995
---------- ----------
Cash flows from financing activities
Principal payments on notes payable ($1,600,000) -
Proceeds from line of credit 9,197,089 $2,533,814
Principal payments on line of credit (8,861,388) -
Increase in long-term obligations - -
Principal payments on long-term obligations (235,264) (28,017)
Proceeds from sale of common stock
and warrants 4,806,893 32,000
---------- ----------
Net cash provided by financing activities 3,307,330 2,537,797
---------- ----------
Net increase in cash
and cash equivalents 1,202,297 284,392
Cash and cash equivalents at beginning of period 376,488 289,392
---------- ----------
Cash and cash equivalents at end of period $1,578,785 109,520
========== ==========
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest $ 199,628 $ 82,811
Income taxes $ 442,788 $ 6,000
Noncash investing and financing activities
During the six months ended March 31, 1995, capital lease obligations of
$37,997 were incurred when the Company entered into leases for equipment.
(Continued)
8
<PAGE>
PEN INTERCONNECT, INC.
CONDENSED STATEMENTS OF CASH FLOWS (Continued)
FOR SIX MONTHS ENDED MARCH 31,
Acquisition of businesses
During February 1996, the Company acquired selected net assets of Overland
Communications (MOTO-SAT). Assets acquired and liabilities assumed in
conjunction with this acquisition were as follows:
Accounts receivable (net) $ 180,631
Inventories 306,306
Prepaid and other assets 5,798
Furniture and equipment 43,755
Accounts payable (256,182)
Accrured liabilities (46,209)
Long Term obligations (306,698)
----------
Net assets acquired ($72,599)
==========
Excess purchase price over net assets acquired
resulted in recoginition of goodwill
During March 1995, the Company acquired selected net assets of Quintec
Interconnect Systems for $2,000,000. Assets acquired and liabilities assumed
in conjunction with this aquisition were as follows:
Accounts receivable $ 705,010
Inventories 1,209,983
Prepaid expenses 6,400
Deposits 5,300
Property and equipment 294,645
Notes payable (32,322)
Accounts payable (636,951)
----------
Net assets acquired 1,552,065
Excess purchase price over net assets acquired allocated
to inventory, property and equipment 447,935
----------
Amount paid $2,000,000
==========
The accompanying notes are an integral part of these statements.
9
<PAGE>
PEN INTERCONNECT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE A - ACQUISITIONS
On March 5, 1996 the Company acquired MOTO-SAT by assuming that
company's debt and offering future stock distributions contingent upon
achievement of performance milestones. The acquisition was effective as
of January 1, 1996. MOTO-SAT is a leading manufacturer of high-end
satellite television systems for recreational vehicles. This
transaction was accounted for using the purchase method of accounting;
accordingly the purchased assets and liabilities have been recorded at
their fair value at the date of acquisition. The results of operations
of the acquired business have been included in the financial statements
since the effective date of acquisition.
Effective March 24, 1995, the Company acquired substantially all assets
and assumed certain liabilities and the operations of Quintec
Interconnect Systems (QIS) for $2,107,457 including acquisition costs
for $107,457. This transaction was accounted for using the purchase
method of accounting; accordingly the purchased assets and liabilities
have been recorded at their estimated fair value at the date of
acquisition. The results of operations of the acquired business have
been included in the financial statements since the date of acquisition.
NOTE B - INVENTORIES
Inventories consist of the following:
March 31, September 30,
1996 1995
Raw materials $ 2,737,598 $ 1,788,640
Work-in-process 1,684,269 1,395,241
Finished goods 394,404 178,513
----------- -----------
$ 4,816,271 $ 3,362,394
=========== ===========
NOTE C - NOTES PAYABLE
During March 1995, certain investors, in connection with a private
placement, loaned the Company $1,600,000 at 8% per annum. These
notes and related interest were paid in full upon successful
completion of the initial public offering in November, 1995 (Note E).
10
<PAGE>
PEN INTERCONNECT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE D - CREDIT FACILITY
The Company has a credit facility with a financing company which
consists of a line of credit and a long-term note.
At March 31, 1996, the Company had a $3,000,000 revolving line of credit
with interest at a base rate plus 2.75% (11.00%), payable monthly. The
Company had borrowed $2,418,598 under the line of credit at March 31,
1996 ($2,082,897 at September 30, 1995). Advances on the line of credit
are limited to 80% of qualified accounts receivable and 35% of eligible
inventory. The line of credit is collateralized by accounts receivable
and inventory. The line of credit agreement expires in August 1997 and
provides for automatic renewals for successive periods of one year each,
but allows for termination of the agreement at the end of any term. The
line of credit prohibits the payment of cash dividends without the
lender's consent and requires the Company to comply with certain
financial ratios, limits capital expenditures, and requires a minimum
net worth level. The Company was in compliance with these requirements
at March 31, 1996 and September 30, 1995. (See Subsequent events
footnote - F for new line of credit)
NOTE E - STOCK TRANSACTION
Initial public offering
On November 17, 1995, the Company successfully completed an
initial public offering of 1,000,000 shares of its Common Stock and
warrants to purchase 1,000,000 shares of Common Stock. The initial
public offering price was $6.00 per share of Common Stock and $0.10 per
Warrant. Each Warrant was immediately exercisable and entitled the
registered holder to purchase one share of Common Stock at a Price of
$6.50 and expires on November 17, 2000. The outstanding Warrants may
be redeemed by the Company upon 30 days' written notice at $0.05 per
Warrant, provided that the closing bid quotations of the Common Stock
have averaged at least $9.00 per share for a period of any 20 trading
days ending on the third day prior to the day on which the Company gives
notice.
In connection with the offering, the Company granted the
underwriter the right to purchase up to 100,000 shares of common stock
and 100,000 warrants. The underwriter was also granted an over-allotment
option of 150,000 shares of common stock and/or warrants to purchase an
additional 150,000 shares of common stock. In December 1995, the underwriter
exercised its option and purchased the 150,000 warrants. The option to
purchase the 150,000 shares of common stock has expired.
11
<PAGE>
PEN INTERCONNECT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE E - STOCK TRANSACTION (Continued)
The Company incurred costs totaling $565,481 in connection with
the offering. The Company received net proceeds of about $4.8 million.
NOTE F - SUBSEQUENT EVENTS
1. New line of credit
On April 8, 1996, the Company completed a 3 year financing agreement
with National Bank of Canada for a $6 million line of credit, at one-half
(.5) percent over the prime rate. This new line of credit replaces
the existing $3 million line (Note D). These new funds were used in
part to pay off the existing line of credit and to fund the acquisition
of InCirT Technology (Note F - New acquisition).
2. New acquisition
On May 2, 1996, the Company entered into an agreement to acquire
substantially all assets and assumed certain liabilities and the
operations of InCirT Technology, a division of the Cerplex Group, Inc.
for $5.3 million, which consisted of $3.5 million in cash and 333,407
shares of common stock. In addition, the Company will deliver to Cerplex
.09261 shares of its common stock for every dollar of past due over 90 days
accounts receivable of ICT collected by the Company during the first 180
days after the date of the acquisition closing up to a maximum of 55,568
shares of common stock. This transaction will be accounted for using
the purchase method of accounting and will be effective as of April 1,
1996.
12
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis provides certain information
which the Company's management believes is relevant to an assessment and
understanding of the Company's results of operations and financial
condition for the three and six month periods ending March 31, 1996 and
1995. This discussion should be read in conjunction with the audited
financial statements of the Issuer and notes thereto included in the
Annual Report of the Issuer on Form 10-KSB for the year ended September
30, 1995.
General
The Company develops and produces on a turnkey basis custom cable
interconnections for original equipment manufacturers ("OEMs") in the
computer, computer peripheral and other computer related industries such
as the telecommunications, instrumentation and testing equipment
industries. The Company's products connect electronic equipment, such
as computers, to various external devices (such as video screens,
printers, external disk drives, modems, telephone jacks, peripheral
interfaces and networks) and connect devices within the equipment (such
as power supplies, computer hard drives and PC cards). Most of the
Company's sales consist of custom cable interconnections developed in
close collaboration with its customers. The Company's customers include
OEMs of computers including mainframes, desktops, portables, laptops,
notebooks, pens and palmtops as well as OEMs of computer peripheral
equipment such as modems, memory cards, LAN adapters, cellular phones,
faxes and printers. Other customers include OEMs of telecommunications,
instrumentation and testing equipment.
Results of Operations
The acquisition of the net assets of QIS on March 24, 1995 has
been accounted for as a purchase. The statement of earnings data for
the three and six months ended March 31, 1996 includes the results of
operations of QIS for the period from March 24, 1995.
The acquisition of the net assets MOTO-SAT in 1996, which was
effective as of January 1, 1996 has been accounted for as a purchase.
The statement of earnings data for the three and six months ended March
31, 1996 includes the results of operations of MOTO-SAT for the period
from January 1, 1996.
13
<PAGE>
Net sales. Net sales for the Company increased approximately 59% and
63% for the three and six month periods ended March 31, 1996 as compared
to the same periods in the prior year, respectively. These increases were
principally due to increased volume of sales of the PCMCIA compatible
products and the inclusion of QIS and MOTO-SAT sales. There have been no
material increases in prices of any of the Company's products between the
two periods and the Company anticipates that prices will remain subject to
competitive pressures in the foreseeable future which may prohibit a
significant price increase.
Cost of sales. Cost of sales as a percentage of net sales have
increased to approximately 84% and 82% for the three and six month
periods in 1996, respectively, as compared to 78% in both of the
corresponding 1995 periods presented. This increase resulted primarily
from the following factors: 1) an increase in the per hour wages in the
Salt Lake City area due to an increased demand for workers and a very low
unemployment rate; 2) a significant increase in sales resulting in an
increased support and training manpower requirement; and 3) a decrease
in efficiency resulting from time requirements to train workforce.
Subsequent to March 31, 1996 the Company has reorganized its production
facilities to improve its workflow and reduce material rework. As a result,
the Company has reduced its work force by over 60 people and has improved
its training procedures. The Company is also currently changing to a new
manufacturing software and accounting package, which will provide more
timely data information to management.
Operating expenses. Operating expenses in total as a percent of net
sales have remained constant at about 12% for all periods presented.
The Company increased its Sales and Marketing expenses to support the
acquisition of QIS and to support a larger customer base. This increase
in Sales and Marketing expense represents only a 1% increase over prior
periods as a percentage of net sales. The Company has also invested in
Research and Development in the current period as compared to no
material investment in prior periods. General and administrative
expenses have decreased as a percent of net sales from about 6% in the
prior year periods, to 4% and 5% in the three and six month 1996 periods
presented, respectively.
Other income and expenses. Other income and expenses have increased
as a percent of sales from 1.1% to 1.6% for the three months ended March
31, 1995 and 1996, respectively. This increase is due to a demand for
increased borrowing (interest expense) to support the higher level of
sales and its associated increased inventory and accounts receivable
levels. For the six month period ended March 31 other income and
expenses have increased from 1.3% to 2.2% for 1995 and 1996,
respectively. This increase was primarily related to interest expense
associated with the bridge loan used to fund the QIS acquisition which
was repaid in November 1995 with IPO funds and general increases in
borrowing to support increased sales, inventory and accounts receivable.
As noted in the subsequent events footnote the Company has negotiated a
new line of credit which reduced the incremental borrowing rate from
2.75% over prime to .5% over prime. The line of credit was also
increased from $3 million to $6 million.
14
<PAGE>
Earnings before income taxes. Earnings before income taxes as a
percentage of net sales decreased from 9.1% to 2.1% for the three months
ended March 31, 1995 as compared to 1996. Earnings before income taxes
for the six months ended March 31, 1996 decreased from 8.9% in 1995 to
4.1% in 1996. These decreases were primarily due to increased direct
labor rate costs, increased inefficiencies in production, and increased
interest expense to support the increased sales levels, inventory and
accounts receivable.
Liquidity and Capital Resources
The Company has historically financed its operations through
operating cash flow and lines of credit. However, on November 17, 1995,
the Company completed an initial public offering which produced net
proceeds of approximately $4,807,000. This offering significantly
increased the cash and equity balances. It also allowed the Company to
retire the $1,600,000 debt associated with the QIS acquisition, and to
purchase additional inventory and equipment to support the increased
production levels.
The current ratio has increased from approximately 1:1 at September 30,
1995 to approximately 2:1 at March 31, 1996. This increase is primarily
the result of the proceeds received from the IPO.
Working capital increased from $126,710 at September 30, 1995 to
$5,011,353 at March 31, 1996. The increase as principally due to
earnings in the period and the net proceeds received from the initial
public offering.
After March 31, 1996, the Company entered into a 3 year financing
arrangement with National Bank of Canada (see Note F to Financial
Statements).
Management believes that existing cash balances, borrowings
available under the line of credit, and cash generated from operations
will be adequate to meet the Company's anticipated cash requirements
during the next twelve months. However, in the event the Company
experiences adverse operating performance or above anticipated capital
expenditure requirements, additional financing may be required. There
can be no assurance that such additional financing, if required, would
be available on favorable terms.
Inflation and Seasonality
The Company does not believe that it is significantly impacted by
inflation. Historically, the industry sales tend to decline in January,
February, July and August when activity in the personal computer
industry as a whole is reduced. However, the Company does not
anticipate a significant sales decline due to expanded marketing efforts
and backlog orders.
15
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time the Company has been a party to various legal
proceedings arising in the ordinary course of business. The
Company is not currently a party to any material litigation and is
not aware of any litigation threatened against it that could have
a materially adverse effect on its business.
Item 2. Changes in the Securities. None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders. None
during the quarter.
Item 5. Other Information.
On May 2, 1996, the Company acquired substantially all assets and
assumed certain liabilities and the operations of InCirT
Technology, for $3,500,000 and 333,407 shares of Common Stock.
This issuance increased the outstanding shares to 3,033,407.
Item 6. Exhibits and Reports on Form 8-K.
A. Reports on Form 8-K. None during the quarter.
B. Exhibits
11 Calculation of earnings per share.
27 Financial Data Schedule.
16
<PAGE>
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.
PEN INTERCONNECT, INC.
By: /s/ James S. Pendleton
-----------------------
James S. Pendleton,
CEO and Director
By: /s/ Wayne R. Wright
-----------------------
Wayne R. Wright,
CFO, Principal Accounting
Officer and Director
17
Exhibit 11
PEN INTERCONNECT, INC.
CALCULATION OF EARNINGS PER SHARE
FOR THE THREE MONTH PERIOD ENDED
MARCH 31, 1996 & 1995
Months Weighted
Common Out- Average
1996 Shares standing Shares
- --------------------------------------------------------------------------
Balance at January 1, 1996 2,700,000 3 8,100,000
Balance at March 31, 1996 2,700,000 8,100,000
Weighted average number of shares for three months 2,700,000
Earnings for three months ended March 31, $ 71,684
Earnings per share $ 0.03
1995
Balance at Januray 1, 1995 1,700,000 3 5,100,000
Balance at March 31, 1995 1,700,000 5,100,000
Weighted average number of shares for three months 1,700,000
Earnings for three months ended March 31, $ 179,959
Earnings per share $ 0.11
FOR THE SIX MONTH PERIOD ENDED
MARCH 31, 1996 & 1995
1996
Balance at October 1, 1995 1,700,000 6 10,200,000
Issued shares November 17, 1995 1,000,000 4.5 4,500,000
Balance at March 31, 1996 2,700,000 14,700,000
Weighted average number of shares for six months 2,450,000
Earnings for six months ended March 31, $ 251,980
Earnings per share $ 0.10
1995
Balance at October 1, 1994 1,200,000 6 7,200,000
Issued shares in October 1994 500,000 6 3,000,000
Balance at March 31, 1995 1,700,000 10,200,000
Weighted average number of shares for six months 1,700,000
Earnings for six months ended March 31, $ 329,566
Earnings per share $ 0.19
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PEN
INTERCONNECT, INC. MARCH 31, 1996 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
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