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, 1997
[ ] 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 15, 1996 there were outstanding 1,481,766 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, 1997 (Unaudited)
Statements of Earnings
Three and six months ended
June 30, 1997 and 1996 (Unaudited)
Statements of Cash Flows
Six months ended
June 30, 1997 and 1996 (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 30,1997
(unaudited)
ASSETS
Cash & cash equivalents $ 442,213
Accounts receivable, less
allowances for doubtful accounts 576,581
Inventory 1,110,318
Prepaid expenses 62,298
Deferred Income Taxes 80,000
-------------------
TOTAL CURRENT ASSETS 2,271,410
PROPERTY, PLANT AND EQUIPMENT, less
accumulated depreciation and amortization 1,149,424
OTHER ASSETS 181,252
-------------------
$ 3,602,086
===================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 384,092
Accrued expenses 107,416
Current maturities of long-term debt 65,551
-------------------
TOTAL CURRENT LIABILITIES 557,059
LONG-TERM DEBT, less current maturities 946,743
SHAREHOLDERS' EQUITY
Common stock, par value $.01 per share
1,636,566 issued and 1,481,766 outstanding 16,366
Capital in excess of par value 2,751,988
Accumulated deficit (568,977)
Less treasury stock, at cost,
(145,000 shares) (101,093)
-------------------
2,098,284
-------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,602,086
===================
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,
------------- ------------- ------------- ------------
1997 1996 1997 1996
------------- ------------- ------------- ------------
SALES $ 1,227,978 $ 965,056 $ 2,259,061 $ 1,904,457
COST OF SALES 564,705 424,460 1,029,675 861,146
------------- ------------ ------------- ------------
GROSS PROFIT 663,273 540,596 1,229,386 1,043,311
------------- ------------ ------------- ------------
OPERATING EXPENSES
Research and development 84,603 65,009 144,031 124,412
Selling, G & A 476,036 459,114 1,069,582 914,202
-------------- ------------ ------------ ------------
560,639 524,123 1,213,613 1,038,614
-------------- ------------ ------------ ------------
Operating Income 102,634 16,473 15,773 4,697
-------------- ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Rental Income 12,049 12,049 24,098 24,098
Interest Income 2,853 2,890 6,195 6,119
Interest Expense (27,487) (28,335) (54,612) (57,734)
--------------- ----------- ------------- ------------
Income (Loss)
before income taxes 90,049 3,077 (8,546) (22,820)
Provision for income taxes 0 0 0 0
--------------- ------------ ------------- ------------
NET INCOME (LOSS) $ 90,049 $ 3,077 $ (8,546) $ (22,820)
=============== ============ ============= ============
NET INCOME (LOSS)
PER SHARE $ 0.06 $ - $ - (0.02)
=============== ============= ============= ============
Average number
of shares 1,481,766 1,491,566 1,481,766 1,491,566
============== ============== ============= ============
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,
------------ -------------
1997 1996
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) Income $ (8,546) $ (22,820)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 44,165 43,650
Increase in assets:
Accounts receivable (162,628) (60,389)
Inventories (32,207) (187,565)
Prepaid expenses and other (121,115) (19,870)
Increase (decrease) in liabilities:
Accounts payable 186,069 166,550
Accrued expenses 12,673 (53,707)
----------- ------------
Net cash used in operating activities (81,589) (134,151)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was paid for:
Property and equipment 23,554 25,273
----------- ------------
Net cash used in investing activities (23,554) (25,273)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was used for:
Principal payments of long-term debt 36,365 27,467
Purchase treasury stock 0 8,288
----------- ------------
Net cash used in financing activities (36,365) (35,755)
----------- ------------
Net decrease in cash and cash equivalents (141,508) (195,179)
Cash and cash equivalents at
beginning of period 583,721 609,466
----------- ------------
Cash and cash equivalents at
end of period $ 442,213 $ 414,287
=========== ============
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, 1997, 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, 1997 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
are 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, 1996. The results of operations for the period ended June 30, 1997
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.
(Statements in this Form 10-QSB that are not descriptions of historical fact are
forward-looking statements that are subject to risks and uncertainties. Actual
results could differ materially from those currently anticipated due to a number
of factors, including risks relating to competition; and other factors impacting
the data communications industry.)
Sales for the second quarter ended June 30, 1997 increased 27% to $1,227,978
compared to sales of $965,056 for the same period in 1996. Sales for the six
months ended June 30, 1997 increased 18% to $2,259,061 compared to $1,904,457
for the comparable period of 1996. The increased sales can be attributed the
success of increased promotional activities during 1996 and the first half of
1997.
Cost of sales for the second quarter of $564,705 or 46% of sales increased
compared to $424,460 or 44% of sales during the same period in 1996. The
decrease in the Company's gross profit margin was primarily a function of
product mix.
Selling, general and administrative expenses of $476,036 for the second quarter
ended June 30, 1997 increased compared to $459,114 for the same period in 1996.
During the second quarter, the Company continued its aggressive marketing
campaign in an effort to stimulate sales.
Research and development expenses increased to $84,603 compared to $65,009 for
the second quarter of 1996. During the second quarter, the Company continued its
development of several advanced data communications products. Additional staff
was added to engineering during the second quarter in an attempt to enhance the
Company's research and development capabilities.
Interest income decreased slightly to $2,853 during the second quarter of 1997
compared to $2,890 for the same period of 1996 and $3,342 for the first quarter
of 1997. The decrease from the first quarter of 1997 is due primarily to the
lower cash on deposit and lower yields at Merrill Lynch.
During the second quarter of 1997, the Company had rental income of $12,049,
which was in line with the comparable quarter in 1996 and the first quarter of
1997. Net income increased to $90,049 for the three months ended June 30, 1997,
compared to $3,077 for the same period in 1996 and a net loss of $98,595 during
the first quarter of 1997. The net loss of $8,546 for the six month ended June
30, 1997, contrast with the net loss of $22,820 during the same period in 1996.
The increase in net income for the second quarter of 1997 is due primarily to
the increase in revenues.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities for the six months ended June 30, 1997 was
$81,589 compared to net cash used of $134,151 for the same period in 1996. The
decrease in cash used in operating activities is due primarily to improved
utilization of inventory resulting from more accurate sales forecasting and
manufacturing planning. Working capital decreased to $1,854,351 at June 30,
1997, a decrease of $22,199 from December 31 1996. The current ratio at June 30,
1997 decreased to 4.3 to 1 compared to 6.2 to 1 at December 31, 1996. The
Company renewed its $1,000,000 line of credit with Merrill Lynch effective July
1, 1996 for two years. The Company has no amounts outstanding under the line of
credit at this time. The Company considers its 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.
By: __________\s\_________________
Joel A. Kramer, President and
Chairman of the Board
(Principal Executive Officer)
By: ___________\s\________________
Michael Breneisen, Vice President of Finance
(Principal Financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 442,213
<SECURITIES> 0
<RECEIVABLES> 591,581
<ALLOWANCES> 15,000
<INVENTORY> 1,110,318
<CURRENT-ASSETS> 2,411,410
<PP&E> 1,862,962
<DEPRECIATION> 713,538
<TOTAL-ASSETS> 3,602,086
<CURRENT-LIABILITIES> 557,059
<BONDS> 0
0
0
<COMMON> 16,366
<OTHER-SE> 2,081,918
<TOTAL-LIABILITY-AND-EQUITY> 3,602,086
<SALES> 1,227,978
<TOTAL-REVENUES> 1,227,978
<CGS> 564,705
<TOTAL-COSTS> 564,705
<OTHER-EXPENSES> 560,639
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,487
<INCOME-PRETAX> 90,049
<INCOME-TAX> 0
<INCOME-CONTINUING> 90,049
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 90,049
<EPS-PRIMARY> 0.06
<EPS-DILUTED> 0.06
</TABLE>
