U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
(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, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________________ to ______________
Commission file number 0-9352
American Teletronics, Inc.
- ------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Colorado 76-1675704
- -------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (IRS Employer
Identification No.)
15400 Knoll Trail, Suite 205, Dallas, TX 75248
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(214) 661-2345
- -------------------------------------------------------------------------------
(Registrant's telephone number)
- ------------------------------------- ----------------------------------
(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 CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 52,639,056
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Information.
AMERICAN TELETRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
----------- -----------
CURRENT ASSETS
<S> <C> <C>
Cash .............................................................. $ 449,778 $ 230,591
Certificates of Deposit, pledged to secure notes payable .......... 350,000 350,000
Accounts Receivable, net of allowance for doubtful
accounts of $62,422 and $67,985 in 1996 and 1995, respectively 532,496 302,591
Receivable Under Warehouse Agreements ............................. -- 82,296
Mortgage Loan Receivable .......................................... 79,141 87,941
Prepaid Expenses .................................................. 12,136 101,610
Workers' Compensation Insurance Deposit ........................... 943,490 813,840
Single Family Residential Real Estate ............................. 220,935 271,435
FmHA Loan Fees Receivable ......................................... -- 320,000
----------- -----------
TOTAL CURRENT ASSETS ......................................... 2,587,976 2,560,304
----------- -----------
OFFICE BUILDING, FURNITURE AND EQUIPMENT ................................. 986,963 880,071
Less Accumulated Depreciation ..................................... (299,215) (189,438)
----------- -----------
NET OFFICE BUILDING, FURNITURE AND EQUIPMENT ................. 687,748 690,633
----------- -----------
OTHER ASSETS
Mortgage Loan Participation ....................................... 128,028 268,077
Investment in Bank Stock .......................................... 91,500 91,500
Investment in Preferred Stock ..................................... 204,000 204,000
Land Held for Sale ................................................ 365,957 365,957
Goodwill, net of accumulated amortization
of $1,011,379 and $969,836, respectively ..................... 512,020 553,563
Noncompete Agreements, net of accumulated amortization
of $41,250 and $30,000, respectively ......................... 33,750 45,000
Deposits and Other Assets ......................................... 42,090 68,586
Related Party Receivables ......................................... 127,165 319,403
----------- -----------
TOTAL OTHER ASSETS ........................................... 1,504,510 1,916,086
----------- -----------
TOTAL ASSETS ................................................. $ 4,780,234 $ 5,167,023
=========== ===========
</TABLE>
(Continued)
The accompanying notes are an integral part
of these consolidated financial statements.
F-1
<PAGE>
AMERICAN TELETRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
September 30, December 31,
1996 1995
<S> <C> <C>
----------- -----------
CURRENT LIABILITIES
Notes Payable ............................................... $ 1,114,042 $ 802,426
Current Maturities of Long-Term Debt ........................ 290,825 294,744
Accounts Payable ............................................ 227,244 233,691
Accrued Liabilities ......................................... 1,891,607 629,387
Payables Under Warehouse Agreements ......................... 347,682 --
Deferred FmHA Loan Fees ..................................... -- 320,000
----------- -----------
TOTAL CURRENT LIABILITIES .............................. 3,871,400 2,280,248
LONG-TERM DEBT, Excluding Current Maturities ....................... 972,842 1,248,380
----------- -----------
TOTAL LIABILITIES ...................................... 4,844,242 3,528,628
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, no par value; Authorized 100,000,000
shares; issued and outstanding 52,639,056 and 52,139,056
shares, respectively ................................... 3,815,975 3,715,975
Retained (Deficit) .......................................... (3,501,476) (1,987,389)
----------- -----------
314,499 1,728,586
Less Treasury Shares at Cost ........................... (378,507) (90,191)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) ................... (64,008) 1,638,395
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ... $ 4,780,234 $ 5,167,023
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
F-2
<PAGE>
AMERICAN TELETRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Sept 30, Nine Months Ended Sept 30,
---------------------------- ----------------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
------------ ------------ ------------ ------------
REVENUES
Employee Leasing ............................. $ 11,015,513 $ 10,512,036 $ 31,066,538 $ 32,282,524
Mortgage Services Income ..................... 422,925 497,576 2,000,789 1,051,961
Mortgage Interest ............................ 52,382 43,754 159,574 83,219
FmHA Loan Fees ............................... -- -- 629,866 --
------------ ------------ ------------ ------------
TOTAL REVENUES .......................... 11,490,820 11,053,366 33,856,767 33,417,704
------------ ------------ ------------ ------------
COST OF REVENUES
Leased Employee Cost ......................... 10,591,480 9,618,264 30,705,624 30,077,437
Commissions and Other Mortgage Services Costs 278,523 155,496 1,104,568 464,267
Mortgage Interest ............................ 34,484 26,434 162,999 42,740
------------ ------------ ------------ ------------
TOTAL COST OF REVENUES .................. 10,904,487 9,800,194 31,973,191 30,584,444
------------ ------------ ------------ ------------
GROSS PROFIT ............................ 586,333 1,253,172 1,883,576 2,833,260
------------ ------------ ------------ ------------
SELLING EXPENSES .................................... 65,769 54,250 178,171 214,387
------------ ------------ ------------ ------------
GENERAL AND ADMINISTRATIVE EXPENSES
Salaries and Employee Benefits ............... 533,775 458,250 1,771,648 1,424,488
Occupancy Expense ............................ 125,802 104,502 388,768 291,194
Amortization ................................. 27,005 55,597 56,093 132,436
Other ........................................ 228,136 284,420 859,245 704,697
------------ ------------ ------------ ------------
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 914,718 902,769 3,075,754 2,552,815
------------ ------------ ------------ ------------
OTHER INCOME AND (EXPENSE)
Interest Income .............................. 23,865 -- 63,162 15,143
Other Income (Expense) ....................... (457) (9,011) (671) 45,078
Interest Expense ............................. (68,412) (94,136) (258,831) (241,441)
------------ ------------ ------------ ------------
TOTAL OTHER INCOME AND (EXPENSE) ........ (45,004) (103,147) (196,340) (181,220)
------------ ------------ ------------ ------------
(LOSS) INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES .......................... (439,158) 193,006 (1,566,689) (115,162)
INCOME TAX EXPENSE .................................. -- -- -- --
------------ ------------ ------------ ------------
(LOSS) INCOME FROM CONTINUING OPERATIONS ............ ($ 439,158) $ 193,006 ($ 1,566,689) ($ 115,162)
DISCONTINUED OPERATIONS
Income on Disposal of Subsidiaries ........... -- -- 52,602 --
------------ ------------ ------------ ------------
NET (LOSS) INCOME ................................... ($ 439,158) $ 193,006 ($ 1,514,087) ($ 115,162)
============ ============ ============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING .......... 52,639,056 51,688,153 52,439,056 51,668,153
============ ============ ============ ============
(LOSS) INCOME PER SHARE
Continuing Operations ........................ ($ 0.01) $ 0.00 ($ 0.03) $ 0.00
Discontinued Operations ...................... -- -- -- --
------------ ------------ ------------ ------------
($ 0.01) $ 0.01 ($ 0.03) $ 0.00
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
F-3
<PAGE>
AMERICAN TELETRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Retained
COMMON STOCK Earnings Treasury
------------------------
Shares Amount (Deficit) Stock TOTAL
---------- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1994 .......... 51,668,153 $ 3,598,249 ($1,180,041) -- $ 2,418,208
Sale of Common Stock
August, 1995 ........... 470,903 117,726 -- $ 117,726
Acquisition of Treasury Stock -- -- -- -90191 ($ 90,191)
Net Loss 1995 ............... -- -- (807,348) ($ 807,348)
----------- ----------- ----------- ----------- -----------
BALANCE DECEMBER 31, 1995 .......... 52,139,056 $ 3,715,975 ($1,987,389) ($ 90,191) $ 1,638,395
Sale of Common Stock
March, 1996 ............ 500,000 100,000 -- -- $ 100,000
Acquisition of Treasury Stock -- -- -- (288,316) (288,316)
Net (Loss) 1996 ............. -- -- (1,514,087) -- ($1,514,087)
----------- ----------- ----------- ----------- -----------
BALANCE SEPT 30, 1996 .............. 52,639,056 $ 3,815,975 ($3,501,476) ($ 378,507) ($ 64,008)
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
F-4
<PAGE>
AMERICAN TELETRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Sept 30, Sept 30,
-------------------------- ----------------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) Income .................................................... ($ 439,158) $ 193,006 ($1,514,087) ($ 115,162)
Adjust. to Reconcile Net (Loss)Income to Net Cash Used by Operation
Income From Discontinued Operations ............................. -- -- (52,602) --
Depreciation .................................................... 36,398 32,266 106,477 71,105
Amortization .................................................... 27,005 55,597 56,093 132,436
Changes in Current Assets and Liabilities
(Increase) Decrease in Accounts Receivable ...................... 261,634 49,090 (229,905) 87,674
Collection of Insurance Receivable .............................. -- 420,000 -- 420,000
(Increase) Decrease in Receivable Under Warehouse Agreements .... 261,738 (21,389) 429,978 1,080
Decrease in Prepaid Expenses .................................... 28,851 -- 89,474 15,393
(Increase) in Workers' Compensation Ins. Deposit ................ (294,020) (200,788) (129,650) (601,925)
Change in Single Family Residential Real Estate ................. 33,566 -- 59,300 --
Change in Cash Overdraft ........................................ -- -- -- (53,517)
Increase (Decrease) in Accounts Payable ......................... 4,556 (19,557) (6,447) 32,838
Increase (Decrease) in Accrued Liabilities ...................... 333,801 (142,572) 1,262,220 263,924
----------- ------------ ------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES .................. 254,371 365,653 70,851 253,846
----------- ------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Office Furniture and Equipment ........................... (9,162) (34,529) (106,892) (86,121)
Mortgage Loan Participation Collections .............................. -- (85,206) 140,049 (89,478)
Deposits and Other ................................................... 25,524 41,782 26,496 30,996
----------- ------------ ------------ ------------
NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES ........... 16,362 (77,953) 59,653 (144,603)
----------- ------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in Related Party Receivable/Payable ......................... (64,274) (379,119) (43,476) (232,890)
Note Borrowings ...................................................... -- 429,300 762,837 503,300
Note Payments ........................................................ (246,056) (93,791) (730,678) (125,284)
Sale of Common Stock ................................................. -- 117,726 100,000 117,726
----------- ------------ ------------ ------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES ........... (310,330) 74,116 88,683 262,852
----------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH AND CERTIFICATES
OF DEPOSIT ...................................................... (39,597) 361,816 219,187 372,095
CASH AND CERTIFICATES OF DEPOSITS AT THE BEGINNING
OF THE PERIOD ................................................... 839,375 221,016 580,591 210,737
----------- ------------ ------------ ------------
CASH AND CERTIFICATES OF DEPOSITS AT THE END
OF THE PERIOD ................................................... $ 799,778 $ 582,832 $ 799,778 $ 582,832
=========== =========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash Paid During the
Year as:
Interest Expense ........................................... $ 102,896 $ 49,147 $ 421,830 $ 124,678
=========== =========== =========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Change in Related Party Receivable/Payable ...................... 235,714 -- -- ($ 103,000)
Treasury Shares ................................................. (235,714) -- --
Assumption of Long-Term Debt .................................... -- -- -- 103,000
Receivable from Insurance Company ............................... -- -- -- 420,000
Aquisition of Assets ............................................ -- (156,250) -- (156,250)
Common Stock .................................................... -- 156,250 -- 156,250
Increase in Workers' Comp Claim Liability ....................... -- -- -- --
Decrease in Workers' Comp Insurance Deposit ..................... -- -- -- (420,000)
----------- ------------ ------------ -----------
TOTAL ........................................................... $ -- $ -- $ -- $ --
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
AMERICAN TELETRONICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
(UNAUDITED)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulations S-X. They do not include all information and notes required by
generally accepted accounting principles for complete financial statements.
However, except as disclosed, there has been no material change in the
information disclosed in the notes to consolidated financial statements included
in the Annual Report on Form 10-K of American Teletronics, Inc. and Subsidiaries
for the year ended December 31, 1995. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three month
period ended September 30, 1996, are not necessarily indicative of the results
that may be expected for the year ended December 31, 1996.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operation
Financial Comparisons:
First Nine Months of 1996: For the nine months ending September 30, 1996, ATI
had consolidated revenues of $33,856,767. This compares to $33,417,704 for a
like period in 1995 for a net increase of $439,063. Revenues from employee
leasing decreased from $32,282,524 in 1995 to $31,066,538 for 1996 or $1,215,986
for the first nine months of 1996, a decrease of 3.8%. This reduction is a
result of management's decision to eliminate unprofitable and/or high risk
business during the third and fourth quarters of 1995 and by requiring that all
new business meet heightened standards for credit, safety and profitability.
Mortgage fee revenues increased from $1,051,961 during the first nine months of
1995 to $2,630,655, an increase of $1,578,694 or 150.1% for the comparable
period. This increase is a result of revenues of $904,443 from the Timonium,
Maryland branch which was not in existence in 1995, $629,866 from the FmHA
government guaranteed loan program and increased revenues from the Dallas, Texas
branch from mortgage products, which have been in development and are now
starting to be implemented.
For the nine months ending September 30, 1996, ATI had a consolidated loss from
all operations of $1,514,087 compared to a comparable loss of $115,162 for the
nine months ending September 30, 1995. This increase in loss of $1,398,925 is
primarily a result of the following: (1) a determination on the part of
management to recognize the total amount of the future costs with the employee
leasing operation of workers compensation claims as estimated by its insurance
carrier in the period of occurrence rather than as the claims are paid. The net
effect of this change from previous recognition is an adjustment in workers
compensation expense of approximately $800,000. Two large claims, which occurred
in the first six months of 1996 and may amount to approximately $480,000 and
could be paid over the next four years was a principal reason to cause
management to focus on the change in the expense treatment. Management believes
this recognition treatment is more conservative than the previous method and as
such eliminates the potential requirement to adjust previous insurance policy
years. In the event that the claims incurred do not mature into
<PAGE>
requirements for paid claims in the amount recognized then a recovery will be
recognized as reduced expenses in subsequent periods. Since it is anticipated
that Crest Outsourcing, Inc. ("Crest"), ATI's professional employer organization
("PEO"), will be involved in a "Spin Out" in the near future, this more
conservative recognition of expenses will assist in the disclosure of the risk
associated with the PEO Industry. This risk can be eliminated by Crest obtaining
a fully insured workers compensation program. (2) A change by the Veteran's
Administration in the amount of points charged on each mortgage loan and the
elimination of variable rates from the current VA program has severally reduced
the Timonium, Maryland revenues and caused that branch to incur losses of
$359,494 for the nine month period and (3) the decision by management to defer
recognition of income on FmHA loans until the cash is received rather than when
the loan closes. This decision is to recognize the difficulty in estimating the
timing of when cash will be received from these loans after they have closed and
the guarantee is issued.
At the start of the third quarter the Timonium branch adopted a wider menu of
services which are consistent with the Dallas branch and which are not as
interest rate sensitive and accordingly anticipated that revenues would increase
by the end of the year. However, the anticipated increases in revenue did not
occur and the mortgage operation is in the process of selling the Timonium
operation to the employees in Maryland. In the event the sale is consummated,
the operation will continue on a "Net Branch" basis with no future liabilities
being assumed by the Company. The Dallas branch experienced mortgage operation
revenues of $1,618,940 for the first nine months of 1996 as compared to
$1,135,180 for the same period in 1995, an increase of 42.6%. The revenue
increase of $482,760 is attributed to increased revenues of $629,866 from the
government guaranteed loan program and a decrease in revenues of $147,106 due to
a reduction of mortgage revenue for the previous comparable nine month period.
The combined mortgage division sustained a combined profit of $170,431 before
corporate overhead allocation and income tax provision. This compares to a loss
of $475,385 for the nine month period ending September 30, 1995. This is an
improvement of $645,816 of which the government guaranteed loan program
represents $629,866 of the increase.
Third Quarter of 1996: For the third quarter ending September 30, 1996, ATI had
consolidated revenues of $11,490,820. This compares to $11,053,366 for a like
period in 1995 for a net increase of $437,454. Revenues from employee leasing
increased from $10,512,036 in the third quarter of 1995 to $11,015,513 for the
same period in 1996 or $503,477, an increase of 4.8%. This increase reflects the
first quarter that Crest, ATI's employee leasing subsidiary, has produced
comparative numbers since Crest management began eliminating unprofitable and
high risk clients. Crest's management decision to eliminate unprofitable and/or
high risk business during the last two quarters of 1995 and by requiring that
all new business meet heightened standards for credit, safety and profitability
decreased revenues for the four consecutive quarters ending June 30, 1996.
Mortgage fee revenues decreased from $497,576 during the third quarter of 1995
to $422,925 for the third quarter of 1996, a decrease of $74,651. This decrease
is all related to decreased revenues from the Dallas operation. No revenue was
recognized from government guaranteed loans and the Timonium, Maryland branch
contributed revenues of $64,820.
For the third quarter ending September 30, 1996, ATI had a consolidated loss
from all operations of $439,158 compared to a consolidated profit of $193,006
for the third quarter ending September
<PAGE>
30, 1995. This increase in loss of $632,164 is primarily a result of a
determination on the part of management to recognize the total amount of the
future costs of workers compensation claims as estimated by its insurance
carrier in the period of occurrence rather than as the claims are paid. The net
effect of this change from previous recognition is an adjustment in workers
compensation expense of approximately $800,000 in the second quarter of 1996.
Two claims, mentioned above, which occurred in the first six months of 1996 and
which may amount to approximately $480,000 and which could be paid over the next
four years was a principal reason to cause management to focus on the expense
treatment. Management believes this recognition treatment is more conservative
than the previous method and as such eliminates the requirement to adjust
previous insurance policy years.
Losses of $200,257 were incurred in the Timonium branch in the third quarter as
a result of the continuing decreased revenues associated with discontinued or
curtailed refinance programs by the Veterans Administration. Revenues declined
from $213,695 in the second quarter of 1996 to $64,820 in the third quarter of
1996. At the beginning of the third quarter, 1996, Timonium adopted the wider
menu of services which were developed in the Dallas branch and which are not as
interest rate sensitive and accordingly anticipates that revenues will increase
by the end of the year. This strategy was unsuccessful, and the Timonium Branch
is being sold to the employees effective October 1, 1996. The Dallas branch
experienced mortgage operation revenue of $303,031 for the third quarter of 1996
as compared to $310,570 for the same period in 1995.
Cash and Temporary Cash Investments increased during the third quarter by
$361,095. This change is attributed to $365,653 from operations and $74,116 from
financing activities less $77,953 from investing in activities.
Marketing
ATI continues to develop new marketing programs for both the PEO operation and
the mortgage division. Marketing in the PEO operation is being developed through
increased Agent/Broker activities and is directed towards geographic expansion
and specific niche markets as opposed to the prior broad approach to all
markets. The Agent/Broker network that is being developed is continuing to
develop brokers in other geographics areas. This merger was reported earlier and
is scheduled to close before the end of August, 1996. Marketing developments in
the mortgage division continue in the Home-A-Loan, Alternative Finance and
Manufactured Housing areas. Management anticipates that increases in revenues
and margins from all areas will continue as more relationships and markets
develop.
Joint Ventures, Mergers and Acquisitions, and Financing
The execution of an agreement with Holigan Family Investments, Inc., Three
Putt, Ltd. and Argo Realty, Inc., the wholly owned subsidiary of the mortgage
operation, to create a Limited Liability Company to be known as Heart of Texas
Trails, LLC is the first manufactured home land development for the Company. The
development is approximately eighty acres and is scheduled for 288 lots. The
mortgage division will provide the mortgage expertise, Holigan Family
Investments, Inc. will provide the sales effort and the manager on site will be
Three Putt, Ltd. Thedevelopment is located in Bellmeade adjacent to Waco, Texas.
The first sales are scheduled for the spring of 1997.
<PAGE>
rest Outsourcing, Inc. has entered into a letter agreement with Southcoast
Capital Corporation wherein Southcoast will act as Crest's exclusive financial
adviser and agent to assist Crest with a best efforts private placement offering
of approximately $5,000,000. The use of proceeds include funds for mergers and
acquisitions, the development of additional marketing programs and the creation
of a captive insurance company.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 Financial Data Schedule
<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.
American Teletronics, Inc.
December 13, 1996 /s/ Harry K. Myers, Jr.
_________________________
By: Harry K. Myers, Jr.,
Chairman and Principal
Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 449778
<SECURITIES> 350000
<RECEIVABLES> 532496
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2587976
<PP&E> 986963
<DEPRECIATION> 299215
<TOTAL-ASSETS> 4780234
<CURRENT-LIABILITIES> 3871400
<BONDS> 972842
0
0
<COMMON> (64008)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4780234
<SALES> 33856767
<TOTAL-REVENUES> 33856767
<CGS> 31973191
<TOTAL-COSTS> 3253925
<OTHER-EXPENSES> (196340)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 258831
<INCOME-PRETAX> (1566689)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1514087)
<DISCONTINUED> 52602
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1514087)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
