<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
-----------------------------
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
Commission File No. 0-27934
Katz Digital Technologies, Inc.
(Exact name of Small Business Issuer as Specified in Its Charter)
Delaware 13-3871120
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
Twenty One Penn Plaza, New York, New York 10001
(Address of Principal Executive Offices) (Zip Code)
(212) 594-4800
(Issuer's Telephone Number
Including Area Code)
Check whether the Issuer: (1) 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 Issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes: X No:
State the number of shares outstanding of each of the Issuer's classes of
common stock, as of August 8, 1996
Class Number of Shares
Common Stock, $.001 par value 4,425,000
---------
Transitional Small Business Disclosure Format:
Yes: No: X
<PAGE> 2
KATZ DIGITAL TECHNOLOGIES, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-QSB
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
QUARTER ENDED JUNE 30, 1996
ITEMS IN FORM 10-QSB
Facing Page Page
Part I
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Part II
Item 1. Legal Proceedings NONE
Item 2. Changes in Securities NONE
Item 3. Default Upon Senior Securities NONE
Item 4. Submission of Matters to a Vote of Security Holders NONE
Item 5. Other Information NONE
Item 6. Exhibits and Reports on Form 8-K 15
Signatures
2
<PAGE> 3
PART I
Item 1. Financial Statements
3
<PAGE> 4
<TABLE>
<CAPTION>
Katz Digital Technologies, Inc.
BALANCE SHEETS
ASSETS December 31, June 30,
1995 1996
-------------- -------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 200,729 $ 5,247,697
Certificate of deposit 233,600 233,600
Accounts receivable, net of allowance for doubtful
accounts of $61,238 and $79,738 at December 31, 1995
and June 30, 1996, respectively 1,980,002 3,086,092
Work-in-process inventory 7,290 61,303
Pre-paid expenses and other current assets 137,663 211,232
------- -------
Total current assets 2,559,284 8,839,924
PROPERTY AND EQUIPMENT - NET 1,629,288 3,627,080
DEFERRED PENSION COSTS 108,664 108,664
OTHER ASSETS 110,805 109,571
------- -------
$4,408,041 $12,685,239
========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 517,630 $ 994,884
Current portion of obligations under capital leases 451,535 704,834
Income taxes payable 59,165 243,554
Deferred taxes payable 210,000 130,000
Due to stockholders --- 850,911
--------- -----------
Total current liabilities 1,238,330 2,924,183
Deferred taxes payable --- 601,000
Other deferred liabilities --- 215,867
Obligations under capital leases, net of current
portion 672,121 1,755,204
------- -----------
Total liabilities 1,910,451 5,496,254
--------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY
Preferred stock, $.001 par value; 5,000 shares
authorized; no shares issued --- ---
Common stock $.001 par value; 25,000,000 shares
authorized; 2,800,000 shares issued and
outstanding at December 31, 1995 and 4,425,000 at
June 30, 1996 2,800 4,425
Additional paid in capital --- 6,860,267
Retained earnings 2,494,790 324,293
--------- -----------
Total stockholders' equity 2,497,590 7,188,985
--------- -----------
$4,408,041 $12,685,239
========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
Katz Digital Technologies, Inc.
STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended June 30, For the Six Months Ended June 30,
1995 1996 1995 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales $ 2,723,390 $ 3,955,240 $ 5,272,204 $ 7,298,354
Cost of goods sold 1,226,169 1,946,983 2,251,920 3,618,637
----------- ----------- ----------- -----------
Gross Profit 1,497,221 2,008,257 3,020,284 3,679,717
Operating Expenses
Selling, general and
administrative 990,437 1,463,205 1,975,284 2,774,855
----------- ----------- ----------- -----------
Total operating
expenses 990,437 1,463,205 1,975,284 2,774,855
----------- ----------- ----------- -----------
Operating income 506,784 545,052 1,045,000 904,862
Interest expense
(income) net 16,854 (1,423) 44,810 31,111
----------- ----------- ----------- -----------
Earnings before
provision for income
taxes 489,930 546,475 1,000,190 873,751
Income taxes (including
$723,000 nonrecurring
provision relating
termination of
Subchapter S Status on
March 25, 1996) 51,402 245,904 107,666 1,020,904
----------- ----------- ----------- -----------
Net earnings (loss) $ 438,528 $ 300,571 $ 892,524 $ (147,153)
=========== =========== =========== ===========
Pro forma data
Historical income
before provision
for income taxes $ 489,930 $ 546,475 $ 1,000,190 $ 873,751
Provision for
income taxes 239,892 245,904 489,783 393,188
----------- ----------- ----------- -----------
Pro forma Net earnings $ 250,038 $ 300,571 $ 510,407 $ 480,563
=========== =========== =========== ===========
Earnings per share:
Pro forma earnings
per share $ 0.08 $ 0.07 $ 0.17 $ 0.13
=========== =========== =========== ===========
Weighted average
shares outstanding 2,954,443 4,456,435 2,954,443 3,754,955
=========== =========== =========== ===========
</TABLE>
5
<PAGE> 6
Katz Digital Technologies, Inc.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1995 June 30, 1996
------------- ------------
<S> <C> <C>
Cash flows from operating activities
Net earnings (loss) $ 892,524 $ (147,153)
Adjustments to reconcile net
earnings to net cash provided by
operating activites
Depreciation and amortization 279,443 529,245
Increase (decrease) in cash
flows from changes in operating
assets and liabilities
Accounts receivable (26,656) (1,106,090)
Work-in-process inventory (1,635) (54,013)
Other current assets 37,435 (73,569)
Other assets 18,529 1,234
Accounts payable and accrued
expenses 247,698 477,254
Income taxes payable (29,900) 184,389
Deferred taxes payable -- 521,000
Other deferred liabilities (203,808) 215,868
Net pension liability 62,756 --
----------- -----------
Net cash provided by operating
activities 1,276,386 548,165
----------- -----------
Cash flows from investing activities
Purchase of property and equipment (155,227) (787,087)
----------- -----------
Net cash used in investing
activities (155,227) (787,087)
----------- -----------
Cash flows from financing activities
Distributions to stockholders (914,461) (672,342)
Payment of obligations under
capital leases (171,121) (403,660)
Net proceeds from public offering -- 6,361,892
----------- -----------
Net cash provided by (used in)
financing activities (1,085,582) 5,285,890
Net increase in cash and cash
equivalents 35,577 5,046,968
Cash -- beginning of period 456,642 200,729
----------- -----------
Cash -- end of period $ 492,219 $ 5,247,697
=========== ===========
Supplemental disclosures of cash
flow information:
Cash paid during the year for
Interest $ 50,134 $ 107,062
=========== ===========
Income taxes $ 127,064 $ 356,734
=========== ===========
</TABLE>
Supplemental disclosures of noncash investing and financing activities: Capital
lease obligations of $658,049 and $1,736,651 were incurred in the six months
ended June 30, 1995 and 1996, respectively, when the Company entered into new
leases for equipment.
6
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Katz Digital Technologies, Inc.
NOTES TO FINANCIAL STATEMENTS
NOTE A -- DESCRIPTION OF BUSINESS AND BASIS OF REPRESENTATION
Katz Digital Technologies, Inc. (the "Company") was formed in December 1995 and
is incorporated in the state of Delaware as a result of a merger between Katz
Graphics Corporation, which was formed in August 1991, and Katz Digital
Technologies, Inc., which was formed in November 1986, and which were both New
York corporations. The merger was accounted for in a manner similar to a pooling
of interests and, accordingly, the accompanying financial statements include the
accounts of Katz Graphics Corporation and Katz Digital Technologies, Inc. for
all periods presented. Assets and liabilities were recorded at net book value.
The Company provides a broad range of digital prepress and digital short-run
printing services to produce full-color and black and white printed materials to
a wide variety of market segments, principally in the New York City area.
The summarized financial information included herein does not include all
disclosures required to be included in a complete set of financial statements
prepared in conformity with generally accepted accounting principles. Such
disclosures were included with the financial statements of the Company at
December 31, 1995 and for the year then ended included in the Registration
Statement on Form SB-2 (Registration No. 333-1190) and related prospectus as
declared effective by the Securities and Exchange Commission on March 25, 1996
(the "public offering"). Such statements should be read in conjunction with the
data herein.
The financial information contains all adjustments (consisting of normal
recurring accruals) which, in the opinion of management, are deemed necessary
for a fair presentation of the results for the interim periods. The results for
the interim periods are not necessarily indicative of results that may be
expected for the full fiscal year.
NOTE B -- TERMINATION OF S CORPORATION STATUS AND PRO FORMA
INFORMATION
Pro Forma Information
Prior to the consummation of the public offering, the Company filed its Federal
and state income tax returns under the provisions of Subchapter S of the
Internal Revenue Code. Accordingly, no provision was provided in the
accompanying financial statements for Federal and certain state income taxes for
the S Corporation periods, since the income of the Company was taxable directly
to its stockholders. On March 26, 1996 the Company converted to a C Corporation,
adopted the accrual basis of accounting, and is subject to both Federal and
state income taxes. Accordingly, $723,000 additional federal and state income
7
<PAGE> 8
taxes, applicable to temporary differences in the recognition of income and
expenses for financial accounting and income tax reporting purposes existing at
March 26, 1996 have been recorded and charged to operations for the six months
ended June 30, 1996. Such charge is solely from the termination of the
Subchapter S status and is nonrecurring.
The pro forma adjustment in the statement of earnings for the six months ended
June 30, 1995 reflects a provision for income taxes based upon pro forma pretax
earnings as if the Company had been subject to Federal and additional state and
local income taxes which it is not currently subject to. The pro forma income
tax provision has been prepared in accordance with SFAS No. 109.
Pro Forma Earnings Per Share
Pro Forma earnings per share are based on the weighted average number of common
and common equivalent shares outstanding during the period. The shares
outstanding for the period give retroactive effect to the merger and
recapitalization of the Company as well as 154,443 shares deemed to be
outstanding, which represent the approximate number of shares deemed to be sold
by the Company (at an assumed initial public offering price of $5.00 per share)
to fund the portion of the $1,127,786 distribution in excess of 1995 undrawn
earnings.
NOTE C -- STOCKHOLDER'S EQUITY
Initial Public Offering
On March 26, 1996, the Company consummated an initial public offering of
1,600,000 shares of its Common Stock at a price of $5.00 per share. The net
proceeds to the Company from the offering were approximately $6,400,000. In
connection with the public offering, the Company declared to its principal
stockholders an S corporation dividend of retained earnings in excess of
$500,000.
NOTE D -- STOCK OPTION PLAN
In February 1996, the Board of Directors and Stockholders approved the adoption
of a stock option plan (the "Plan"). The Plan provides for the grant of options
to purchase up to 350,000 shares of the Company's common stock. These options
may be granted to employees, officers of the Company, non-employee directors of
the Company and consultants and advisors to the Company. The Plan provides for
granting of options to purchase the Company's stock at not less than the fair
market value of such shares on the date of the grant.
The Plan provides for a one-time automatic grant of an option to purchase 20,000
shares of common stock at the market value of the common stock on the date of
the grant to those non-employee drectors serving on the Board of Directors on
the date that the Plan was adopted and also to those persons who become
non-employee directors of the Company in
8
<PAGE> 9
the future, upon their appointment or election as directors of the Company. The
Plan also provides for an annual grant to each non-employee director of the
Company of options to purchase 5,000 shares at the market value of the common
stock of the Company on the date of each grant.
To date, the Company granted options to purchase an aggregate of 266,000 shares
of common stock under the Plan at prices ranging from $5.00 to $5.75 per share.
NOTE E -- PROPOSED ACQUISITION
On June 27, 1996, the Company entered into a letter of intent to acquire
substantially all of the assets of Boris Image Group, Inc. ("Boris"), a
photographic and digital printing service firm located in Boston, for a maximum
aggregate purchase price of $3,189,000, including up to $500,000 of the
Company's Common Stock. The final purchase price will be determined based upon
the earnings of Boris during the calendar years of 1997 through 1999, with a
minimum purchase price of $1,984,000. The Company is currently performing due
diligence and there is no assurance the transaction as contemplated will be
completed.
NOTE F -- ACQUISITION OF THE SARABANDE PRESS, INC.
On August 1, 1996, the Company completed the acquisition of substantially all of
the assets of The Sarabande Press, Inc. ("Sarabande"), a digital pre-press firm
located in New York City, for a maximum aggregate purchase price of $1,900,000,
including up to $400,000 of the Company's Common Stock. The final purchase price
will be determined based upon the sales of Sarabande for the twelve months
following the closing, with a minimum purchase price of $1,000,000.
9
<PAGE> 10
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
Katz Digital Technologies, Inc. (the "Company") provides a broad range of
digital prepress and digital shortrun printing services to produce full-color
and black and white printed materials. The Company was organized in 1987 as a
typography brokerage business and, in February 1991, discontinued substantially
all of its typography brokerage operations and commenced offering digital
prepress services. The Company commenced offering digital short-run printing
services in February 1994 with its Cactus printing system and recently expanded
such capabilities by adding Indigo and Heidelberg printing capabilities in
February 1995 and February 1996 respectively.
In December 1995, the Company effected a merger of its two predecessor New
York corporations into a newly-formed Delaware corporation for the sole purpose
of relocating its state of incorporation from New York to Delaware.
On March 26, 1995, the Company consummated an initial public offering of
1,600,000 shares of its common stock at a price of $5.00 per share, resulting
in net proceeds to the Company of approximately $6,400,000.
Quarter Ended June 30, 1996 Compared to the Quarter Ended June 30, 1995
Net Sales for the quarter ended June 30, 1996 were $3,955,240, an increase
of $1,231,850 or 45.2% compared to $2,723,390 for the quarter ended June 30,
1995. The increase in net sales was primarily attributable to increased digital
short-run printing, which in the aggregate accounted for approximately $795,000
or 65% of such increase, and an industry trend towards digital printing services
compared to more conventional printing processes. Net sales also increased due
to increased sales efforts and the addition of one new sales representative. The
increase in net sales is attributable to increases in the amount of services
provided, rather than increases in the prices charged by the Company for it
services, since the prices for such services did not increase during the quarter
ended June 30, 1996, as compared to the quarter ended June 30, 1995.
Cost of goods sold for the quarter ended June 30, 1996 was $1,946,983, an
increase of $720,814, or 58.8%, as compared to $1,226,169 for the quarter ended
June 30, 1995. The increase was attributable to increased production personnel
for the Company's Heidelberg printing press, which generally has higher costs of
sales as compared to other services provided by the Company, increased
production personnel in other digital short-run printing services and increased
overhead and other costs associated with the Company's fulfillment of increased
orders for the Company's services.
10
<PAGE> 11
Selling, general and administrative expenses for the quarter ended June 30,
1996 were $1,463,205 an increase of $472,768 or 47.7%, as compared to $990,437
for the quarter ended June 30, 1995. The increase was primarily attributable to
increased overhead costs associated with the Company's move to larger
headquarters coupled with additional management personnel to manage the
increased space and expanded sales force.
Net interest income for the quarter ended June 30, 1996 was $1,423 as
compared to interest expense of $16,854 for the quarter ended June 30, 1995, an
increase of $18,277. The increase is due to increased interest income derived
from the investment of the proceeds from the Company's initial public offering,
offset by additional interest costs associated with additional equipment leases.
As a result of the foregoing, the Company had net earnings of $300,571 for
the quarter ended June 30, 1996 as compared to $438,528 for the quarter ended
June 30, 1995. On a pro forma basis net earnings for the quarter ended June 30,
1996 would have been $300,571 as compared to $250,038 for the quarter ended June
30, 1995.
Six Months Ended June 30, 1996 Compared to the Six Months Ended June 30, 1995
Net sales for the six months ended June 30, 1996 were $7,298,354, an
increase of $2,026,150, or 38.4% compared to $5,272,204 for the six months ended
June 30, 1995. The increase in net sales was primarily attributable to increased
digital short-run printing, which in the aggregate accounted for approximately
$1,200,500 or 59% of such increase, and an industry trend towards digital
printing services compared to more conventional printing presses. In addition,
the Company introduced the Heidelberg printing press in late February 1996,
which accounted for approximately $338,000 of net sales during the six months
ended June 30, 1996. Net sales also increased due to increased sales efforts and
the addition of new sales representatives. The increase in net sales is
generally attributable to increases in the amount of services provided, rather
than increases in the prices charged by the Company for its services, since the
prices for such services did not increase during the six months ended June 30,
1996.
Cost of goods sold for the six months ended June 30, 1996 was $3,618,637,
an increase of $1,366,717, or 60.7%, as compared to $2,251,920 for the six
months ended June 30, 1995. The increase was attributable to increased
production personnel and start up costs for the Company's new Heidelberg
printing press, which generally has higher costs of sales as compared to other
services provided by the Company, increased production personnel in other
digital short-run printing services, additional costs associated with the
Company's fulfillment of increased orders for the Company's services and severe
weather conditions which hampered production efforts during the Company's move
to its headquarters in January 1996.
11
<PAGE> 12
Selling, general and administrative expenses for the six month period ended
June 30, 1996 were $2,774,855, an increase of $799,571, or 40.5%, as compared to
$1,975,284 for the six months ended June 30, 1995. This increase was primarily
attributable to increased overhead costs associated with the Company's move to
larger headquarters coupled with additional management personnel to manage the
increased space and expanded sales force.
Net interest expense for the six months ended June 30, 1996 was $31,111 for
the six months ended June 30, 1996, a decrese of $13,699, or 30.6%, as compared
to interest expense of $44,810 for the six months ended June 30, 1995. The
decrease is due to interest income derived from the investment of the proceeds
from the Company's initial public offering, offset by additional interest costs
associated with additional equipment leases.
Included in income taxes for the six months ended June 30, 1996, is a
nonrecurring charge of $723,000 for additonal federal and state income taxes
resulting from the termination of Subchapter S status.
As a result of the foregoing, the Company had a net loss of $147,153 for
the six months ended June 30, 1996, as compared to net earnings of $892,524 for
for the six months ended June 30, 1995. Excluding the nonrecurring provision
relating to the termination of the Company's Subchapter S on March 25, 1996 of
$723,000, pro forma net income would have been $480,563 for the six months ended
June 30, 1996 as compared to pro forma net earnings of $510,407 for the six
months ended June 30, 1995.
Liquidity and Capital Resources
On March 26, 1996 the Company consummated an initial public offering of an
aggregate of 1,600,000 shares of its Common Stock at a price of $5.00 per share.
Net proceeds from the offering were approximately $6,400,000. Prior to the
offering, the Company historically financed its working capital requirements
principally through cash flow from operations and the use of its credit
facility.
Net cash provided by operating activities was $548,165 for the six months
ended June 30, 1996. The increase in cash provided by operating activities
during the six months ended June 30, 1996 was primarily attributable to
depreciation and amortization, and an increase in accounts payable and accrued
expenses, income taxes payable, deferred taxes payable and other deferred
liabilities, partially offset by an increase in accounts receivable, work in
process, inventory and other assets. Net cash used in investing activities for
the six months ended June 30, 1996 was $787,087 and reflects the Company's
purchase of property and equipment. Net cash provided by financing activities
for the six months ended June 30, 1996 was $5,285,890 and reflects stockholder
distributions of $672,342 and payments of capital lease obligation of $403,660.
At June 30, 1996, the Company had cash of $5,247,697.
12
<PAGE> 13
Net cash provided by operating activities was $1,276,386 for the six months
ended June 30, 1995. The increase in cash provided by operating activities
during the six months ended June 30, 1995 was attributable to net earnings,
depreciation and amortization, and increases in the pension liability, other
assets and accounts payable and accrued expenses, coupled with an increase in
accounts receivable. Net cash used in investing activities for the six months
ended June 30, 1995 was $155,227 and reflects the purchase of property and
equipment. Net cash used in financing activities for six months ended June 30,
1995 was $1,085,582 and reflected stockholder distributions of $914,461 and
payments of capital lease obligations of $171,121.
In June 1995, the Company obtained a $1,000,000 line of credit (the "Credit
Line") from European American Bank ("EAB"). The Credit Line bears interest at a
prime rate plus 1% and is available until June 30, 1996 (extended until August
31, 1996). The Credit Line provides for the issuance of term loans in amounts
not to exceed $400,000 in the aggregate, which bear interest at prime rate plus
1 1/2%. The aggregate of all amounts outstanding under the Credit Line may not
exceed $1,000,000. The availability of funds under the Credit Line has been
reduced to $467,200 as a result of the issuance by EAB of a standby letter of
credit to secure the Company's obligations under the lease for its current
facilities. At June 30, 1996, the Company had $0 outstanding under the Credit
line in addition to $467,000 outstanding under the letter of credit. The
Company, in April 1996, used a portion of the net proceeds of the offering to
repay the amount of its borrowings under the Credit Line. The Company, however,
intends to use, from time to time, as the need arises, the amounts available
under its credit line. The Company has pledged to EAB all of its accounts
receivable, machinery, equipment, fixtures and furnishings to secure its
obligations under the Credit Line and has also pledged a certificate of deposit
in the amount of $233,600 to secure its obligations under the letter of credit.
Prior to the public offering, the Company had elected to be taxed as an S
corporation and, accordingly, was not subject to Federal income taxes. Net
income had been taxed for Federal income taxes purposes directly to the
Company's stockholders. On March 26, 1996 the Company converted to a C
corporation, adopted the accrual basis of accounting and became subject to both
Federal and additional state income taxes. From January 1, 1996 through March
25, 1996, the Company made S corporation distributions in the aggregate amount
of approximately $387,400. The Company declared an S corporation distribution to
its principal stockholders of its retained earnings in excess of $500,000 on
March 25, 1996 (the "Stockholder Notes"). Distributions were made pursuant to
the Stockholder Notes in monthly installments of $100,000, commencing one month
after the date of the offering.
On June 27, 1996, the Company entered into a letter of intent to acquire
substantially all of the assets of Boris Image Group, Inc. ("Boris"), a
photographic and digital printing service firm located in Boston, for a maximum
aggregate purchase price of $3,189,000, including up to $500,000 of the
Company's Common Stock. The final purchase price will be determined based upon
the earnings of Boris during the calendar years of 1997 through 1999, with a
minimum purchase price of $1,984,000. The Company is currently performing due
diligence and there is no assurance the transaction as contemplated will be
completed.
13
<PAGE> 14
On August 1, 1996, the Company completed the acquisition of substantially
all of the assets of The Sarabande Press, Inc. ("Sarabande"), a digital
pre-press firm located in New York City, for a maximum aggregate purchase price
of $1,900,000, including up to $400,000 of the Company's Common Stock. The final
purchase price will be determined based upon the sales of Sarabande for the
twelve months following the closing, with a minimum purchase price of
$1,000,000.
The Company's primary cash requirements have been to expand its operations,
fund the cost of its capital leases and pay overhead costs in connection with
the operation of its business. The Company anticipates, based on currently
proposed plans and assumptions relating to its operations, that the proceeds
from the public offering of $1,600,000 of its common stock, together with
projected cash flow from operations and available cash resources, including the
Credit Line, will be sufficient to satisfy its anticipated cash requirements for
at least twelve months.
14
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PART II
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit No. Description
3.1 Certificate of Incorporation (1)
3.2 By-Laws (1)
4.1 Form of Common Stock Certificate (1)
4.2 Form of Underwriter's Warrant Agreement (1)
------------------
(1) Filed as an exhibit to the Registrants Registration Statement on Form
SB-2 (File No. 333-1190) and the amendments thereto, incorporated
herein by reference.
(b) Report on Form 8-K
No reports on Form 8-K were filed during the second quarter of 1996.
15
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exhchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized.
Registrant:
KATZ DIGITAL TECHNOLOGIES, INC.
Dated: August 14, 1996 By: /s/ Gary Katz
--------------
Gary Katz
President & Chief Executive
Officer
Dated: August 14, 1996 By: /s/ Mitchell Cohen
-------------------
Mitchell M. Cohen
Chief Financial Officer
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE KATZ
DIGITAL TECHNOLOGIES, INC. FINANCIAL STATEMENTS AS PRESENTED IN THE COMPANY'S
FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 5,247,697
<SECURITIES> 233,600
<RECEIVABLES> 3,086,092
<ALLOWANCES> 79,738
<INVENTORY> 61,303
<CURRENT-ASSETS> 8,839,924
<PP&E> 3,627,080
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,685,239
<CURRENT-LIABILITIES> 2,924,183
<BONDS> 0
0
0
<COMMON> 4,425
<OTHER-SE> 7,184,560
<TOTAL-LIABILITY-AND-EQUITY> 12,685,239
<SALES> 7,298,354
<TOTAL-REVENUES> 7,298,354
<CGS> 3,618,637
<TOTAL-COSTS> 2,774,855
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,111
<INCOME-PRETAX> 873,751
<INCOME-TAX> 1,020,904<F1>
<INCOME-CONTINUING> (147,153)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (147,153)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
<FN>
<F1>THE PROVISION FOR INCOME TAXES INCLUDES A ONE TIME CHARGE OF $723,000
RELATING TO ADDITIONAL FEDERAL, STATE AND LOCAL INCOME TAXES APPLICABLE TO
TEMPORARY DIFFERENCES IN THE RECOGNITION OF INCOME AND EXPENSES FOR FINANCIAL
ACCOUNTING AND INCOME TAX REPORTING PURPOSES EXISTING AT MARCH 26, 1996. SUCH
CHARGE HAS BEEN RECORDED AND CHARGED TO OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 30, 1996.
</FN>
</TABLE>
