United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarter ended June 30, 1996
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
Commission File Number: 0-11883
TELEBYTE TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Nevada 11-2510138
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
270 Pulaski Road, Greenlawn, New York 11740
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (516) 423-3232
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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
As of August 14, 1996 there were outstanding 1,491,566 shares of Common Stock,
$.01 par value.
Transitional Small Business Disclosure Format (check one);
Yes No X
<PAGE>
TELEBYTE TECHNOLOGY, INC.
INDEX
Part I Financial Information
Item 1. Financial Statements
Balance Sheets
June 30, 1996 (Unaudited)
Statements of Earnings
Three and six months ended
June 30, 1996 and 1995 (Unaudited)
Statements of Cash Flows
Six months ended
June 30, 1996 and 1995 (Unaudited)
Condensed Notes to Financial
Statements (Unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation.
Part II Other Information
<PAGE>
Part I
Financial Information
Item 1. Financial Statements
TELEBYTE TECHNOLOGY, INC.
BALANCE SHEETS
June 30, 1996
--------------------
ASSETS (unaudited)
CURRENT ASSETS
Cash & cash equivalents $ 414,287
Accounts receivable, less
allowances for doubtful accounts 525,377
Inventory 1,151,469
Prepaid expenses 109,024
Deferred Income Taxes 80,000
--------------------
TOTAL CURRENT ASSETS 2,280,157
PROPERTY, PLANT AND EQUIPMENT, less
accumulated depreciation and amortization 1,180,085
OTHER ASSETS 45,452
--------------------
$ 3,505,694
====================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 286,834
Accrued expenses 94,499
Current maturities of long-term debt 46,252
TOTAL CURRENT LIABILITIES 427,585
LONG-TERM DEBT, less current maturities 1,017,694
SHAREHOLDERS' EQUITY
Common stock, par value $.01 per share
1,636,566 issued and 1,491,566 outstanding 16,366
Capital in excess of par value 2,751,988
Accumulated deficit (613,706)
Less treasury stock, at cost,
(145,000 shares) (94,233)
--------------------
2,060,415
--------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,505,694
====================
The accompanying notes are an integral part of this financial statement.
<PAGE>
TELEBYTE TECHNOLOGY, INC.
STATEMENTS OF EARNINGS
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
------------------------- -------------------------------
1996 1995 1996 1995
---------- ----------- ------------- ---------------
NET SALES $ 965,056 $ 1,010,590 $ 1,904,457 $ 1,895,522
COST OF SALES 424,460 437,033 861,146 818,696
---------- ------------ ------------- --------------
GROSS PROFIT 540,596 573,557 1,043,311 1,076,826
---------- ------------ ------------- --------------
OPERATING EXPENSES
Research & development 65,009 76,021 124,412 144,059
Selling, G & A 459,114 443,568 914,202 841,813
---------- ------------ ------------- --------------
524,123 519,589 1,038,614 985,872
----------- ------------ ------------- --------------
Operating Income 16,473 53,968 4,697 90,954
----------- ------------ ------------- --------------
OTHER INCOME (EXPENSE)
Rental Income 12,049 12,049 24,098 24,098
Interest Income 2,890 4,562 6,119 9,562
Interest Expense (28,335) (28,980) (57,734) (56,901)
------------ ------------- -------------- -------------
Income before taxes 3,077 41,599 (22,820) 67,713
Provision for taxes 0 1,300 0 2,300
------------ -------------- ------------- -------------
NET INCOME (LOSS) $ 3,077 $ 40,299 $ (22,820) $ 65,413
============ ============== ============= =============
NET INCOME (LOSS)
PER SHARE $ -- $ 0.03 $ (0.015) $ 0.04
============ ============== ============= =============
Average number
of shares 1,491,566 1,511,566 1,491,566 1,511,566
============ ============== ============= =============
The accompanying notes are an integral part of this financial statement
<PAGE>
TELEBYTE TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months
Ended June 30,
------------------------------
1996 1995
------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) Income $ (22,820) $ 65,413
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation and amortization 43,650 25,650
Decrease (increase) in assets:
Accounts receivable (60,389) (98,736)
Inventories (187,565) 53,542
Prepaid expenses and other (19,870) 51,334
Increase in liabilities:
Accounts payable 166,550 55,813
Accrued expenses (53,707) 15,440
---------- -----------
Net cash (used in) provided in
operating activities (134,151) 168,456
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was paid for:
Property and equipment 25,273 60,605
---------- -----------
Net cash used in investing activities (25,273) (60,605)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from:
Financing capital assets
26,257
Cash was used for:
Principal payments of long-term debt 27,467 26,786
Purchase treasury stock 8,288
---------- -----------
Net cash used in financing activitiese (35,755) (529)
----------- -----------
Net increase (decrease) in cash and
cash equivalents (195,179) 107,322
Cash and cash equivalents at
beginning of period 609,466 439,377
---------- ----------
Cash and cash equivalents at
end of period $ 414,287 $ 546,699
=========== ===========
The accompanying notes are an integral part of this financial statement.
<PAGE>
TELEBYTE TECHNOLOGY, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED FINANCIAL STATEMENTS
The balance sheet as of June 30, 1996, the statement of earnings for the three
and six months then ended and the statements of cash flows for the six month
period then ended have been prepared by the Company without audit. In the
opinion of management, all adjustments (which include only normal recurring
accrual adjustments) necessary to present fairly the financial position, results
of operations and cash flows at June 30, 1996 have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these financial statements
be read in conjunction with the financial statements and notes thereto included
in the Company's annual report to shareholders for the fiscal year ended
December 31, 1995. The results of operations for the period ended June 30, 1996
are not necessarily indicative of the operating results for the full year.
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial Condition or Plan of Operation
RESULTS OF OPERATIONS
Sales for the second quarter ended June 30, 1996 decreased 4.5% to $965,056
compared to sales of $1,010,590 for the same period in 1995. Sales for the six
months ended June 30, 1996 was $1,904,457 compared to $1,895,522 for the
comparable period of 1995.
Cost of sales for the second quarter of $424,460 or 44% of sales increased
compared to $437,033 or 43.2% of sales during the same period in 1995. The
slight decrease in the Company's gross profit margin was primarily a function of
product mix.
Selling, general and administrative expenses of $459,114 for the second quarter
ended June 30, 1996 increased compared to $443,568 for the same period in 1995
and $455,088 in the first quarter of 1996. During the second quarter, the
Company continued its aggressive marketing campaign in an effort to stimulate
sales. Activities included attendance at three (3) major trade shows and
increased levels of print media advertisement.
Research and development expenses decreased to $65,009 compared to $76,021 for
the second quarter of 1995. During the second quarter, the Company continued its
development of several advanced data communications products. The first of
these, an HDSL (High Datarate Subscriber Line) modem is expected to be
introduced in the fourth quarter of 1996. In addition, the Company began
development of a new G.703 interface converter, which it also expects to
introduce in the fourth quarter of 1996. The G.703 protocol operates at a speed
of 64Kbps. It is very popular in Europe and is starting to be used in other
countries of the world.
Interest income decreased to $2,890 during the second quarter of 1996 compared
to $4,562 for the same period of 1995 and $3,229 for the first quarter of 1996.
The decrease is due primarily to the lower cash on deposit and lower yields at
Merrill Lynch. During the second quarter of 1996, the Company had rental income
of $12,049, which was in line with the comparable quarter in 1995 and the first
quarter of 1996. Net income decreased to $3,077 for the three months ended June
30, 1996, compared to $41,427 for the same period in 1995. The net loss of
$22,820 for the six month ended June 30, 1996, contrast with the net income of
$67,713 during the same period in 1995. The decline in net income is due
primarily to higher selling expenditures which the Company believes are
necessary to develop future sales and be competitive.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities for the six months ended June 30, 1996 was
$134,151 compared to net cash provided by of $168,456 for the same period in
1995. This change is due primarily to higher levels of inventory and accounts
receivable. Working capital decreased to $1,852,572 at June 30, 1996, a decrease
of $39,262 from December 31 1995. The current ratio at June 30, 1996 decreased
to 5.3 to 1 compared to 7.0 to 1 at December 31, 1995. The Company renewed its
$1,000,000 line of credit with Merrill Lynch effective July 1, 1996 for one
year. The Company has no amounts outstanding under the line of credit at this
time. The Company considers it's working capital to be adequate to fund
presently foreseeable working capital requirements.
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - None
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TELEBYTE TECHNOLOGY, INC.
(Registrant)
Dated: August 14, 1996 By:
Joel A. Kramer
President, Chief Executive Officer
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 414,287
<SECURITIES> 0
<RECEIVABLES> 540,377
<ALLOWANCES> 15,000
<INVENTORY> 1,151,469
<CURRENT-ASSETS> 2,280,157
<PP&E> 1,804,610
<DEPRECIATION> 624,525
<TOTAL-ASSETS> 3,505,694
<CURRENT-LIABILITIES> 424,585
<BONDS> 0
0
0
<COMMON> 16,366
<OTHER-SE> 2,044,049
<TOTAL-LIABILITY-AND-EQUITY> 3,505,694
<SALES> 965,056
<TOTAL-REVENUES> 965,065
<CGS> 424,460
<TOTAL-COSTS> 424,460
<OTHER-EXPENSES> 524,123
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,335
<INCOME-PRETAX> 3,077
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,077
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 3,077
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
