U.S. 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 QUARTERLY PERIOD ENDED NOVEMBER
30, 1995.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM ____ TO ____.
Commission File Number 0-13870
Technology 80 Inc.
(Exact name of small business issuer as specified in its charter)
Minnesota 41-1373380
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
658 Mendelssohn Avenue North, Minneapolis, Minnesota 55427
(Address of principal executive offices) (Zip Code)
(612) 542-9545
(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
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practible date.
Common Stock, $0.01 par value 1,563,420
(Title of Class) (Shares Outstanding)
<PAGE>
<TABLE>
Part I - Financial Information
Item 1: Financial Statements
TECHNOLOGY 80 INC.
CONDENSED BALANCE SHEETS
<CAPTION>
November 30, August 31,
ASSETS 1995 1995
(Unaudited)
CURRENT ASSETS ------------ -----------
<S> <C> <C>
Cash and cash equivalents $ 700,071 $ 926,163
Short-term investments 265,337 917,271
Accounts receivable (less allowance for doubtful
accounts: Nov. 30 - $9,000; Aug. 31 - $9,000) 503,910 506,815
Inventories 828,178 797,794
Deferred taxes 46,625 43,000
Other current assets 26,192 41,945
---------- ----------
TOTAL CURRENT ASSETS $2,370,313 $3,232,988
---------- ----------
PROPERTY AND EQUIPMENT
Furniture and equipment 405,216 402,752
Leasehold improvements 23,060 23,060
---------- ----------
428,276 425,812
Less accumulated depreciation 342,056 335,625
---------- ----------
86,220 90,187
---------- ----------
OTHER ASSETS
Investments 1,573,658 831,200
Deferred taxes 25,000 41,000
---------- ----------
1,598,658 872,200
---------- ----------
TOTAL ASSETS $4,055,191 $4,195,375
========== ==========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable $ 62,175 $ 51,000
Accrued payroll and payroll taxes 142,218 172,517
Accrued liabilities - other 2,595 42,016
---------- ----------
TOTAL CURRENT LIABILITIES 206,988 265,533
---------- ----------
DEFERRED INCOME TAXES - 72,000
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value (authorized -
5,000,000 shares; issued and outstanding -
Nov. 30, 1,563,420, Aug. 31, 1,561,670 shares) 15,634 15,617
Paid-in capital 3,374,193 3,372,648
Other - loans (162,263) (163,705)
Unrealized gain (loss) on available-for-sale
securities (20,153) 83,091
Retained earnings 640,792 550,191
---------- ----------
3,848,203 3,857,842
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,055,191 $4,195,375
========== ==========
<F01>
See notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
TECHNOLOGY 80 INC.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three months ended
November 30,
1995 1994
--------- ---------
<S> <C> <C>
REVENUES
Product sales - industrial control products $861,193 $759,452
Product sales - channel - 35,700
Other 10,878 3,077
-------- --------
TOTAL REVENUES 872,071 798,229
COST OF GOODS SOLD 349,466 279,380
-------- --------
GROSS PROFIT 522,605 518,849
-------- --------
OPERATING EXPENSES
General and administrative 125,919 91,983
Research and development 137,653 103,977
Selling 175,956 165,311
-------- --------
TOTAL OPERATING EXPENSES 439,528 361,271
-------- --------
INCOME FROM OPERATIONS 83,077 157,578
OTHER INCOME 42,525 23,480
-------- --------
INCOME BEFORE INCOME TAXES 125,602 181,058
PROVISION FOR INCOME TAXES 35,000 55,625
-------- --------
NET INCOME $ 90,602 $125,433
======== ========
EARNINGS PER SHARE $0.05 $0.08
======== ========
<F02>
See notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
TECHNOLOGY 80 INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three months ended
November 30,
1995 1994
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 90,602 $125,433
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 6,688 5,837
Deferred taxes (59,625) 54,000
Gain on sale of fixed asset (62) -
Changes in operating assets and liabilities:
Accounts receivable 2,905 144,218
Inventories (30,384) 35,348
Other current assets 15,753 (9,270)
Accounts payable 11,175 3,665
Due to related parties - (24,500)
Accrued liabilities (69,721) (83,208)
-------- --------
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES (32,669) 251,523
-------- --------
INVESTING ACTIVITIES
Sale of equipment 1,350 -
Purchase of property and equipment (4,009) (20,126)
Purchase of investments (193,768) (368,839)
Payments on other - loans 1,442 1,393
-------- --------
NET CASH PROVIDED IN INVESTING ACTIVITIES (194,985) (387,572)
-------- --------
FINANCING ACTIVITIES
Proceeds from exercise of stock options 1,562 -
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,562 -
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (226,092) (136,049)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 926,163 458,433
-------- --------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $700,071 $322,384
======== ========
<F03>
See notes to condensed financial statements.
</TABLE>
<PAGE>
TECHNOLOGY 80 INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
November 30, 1995
NOTE A - FINANCIAL INFORMATION
The unaudited interim financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission;
accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. These
interim financial statements should be read in conjunction with the
financial statements and notes in the Company's 1995 Annual Report on
Form 10-KSB filed with the Securities and Exchange Commission.
In the opinion of management, the financial statements reflect all
adjustments (which include only normal recurring adjustments) necessary
for a fair presentation of the interim periods.
NOTE B - EARNINGS PER SHARE
Earnings per share is based upon the number of weighted average common
shares outstanding of 1,726,161 for the quarter ended November 30, 1995
and 1,642,598 for the quarter ended November 30, 1994.
<PAGE>
Item 2: Management's Discussion and Analysis
Results of Operations
Revenues for the first quarter ended November 30, 1995 increased 9% over
the same period the preceding year. The revenue increase for the three
months ended November 30, 1995 was due to an increase in sales volume of
13% in the industrial control systems product line over the same period the
prior year.
Gross profit percentages for the three months ended November 30, 1995 was
60% compared to 65% for the three months ended November 30, 1994. The
decrease is primarily due to meeting the demands of a more competitive
market and cost increases.
Operating expenses as a percentage of sales was 50% for the three months
ended November 30, 1995 compared to 45% for the same period the prior year.
The increase is primarily due to increasing engineering and marketing
staff.
Other income increased $19,045 for the quarter ended November 30, 1995 from
the same period the preceding year. The increase was primarily due to
increased investment income.
Net income was $90,602 and $125,433 for the quarter ended November 30, 1995
and November 30, 1994 respectively. This represents a 28% decrease.
Liquidity and Capital Resources
Registrant's balance sheet shows a strong capital position. Operations
used $32,669 in cash. Cash and cash equivalents decreased $226,092 since
August 31, 1995. The company used $193,768 to purchase investments since
August 31, 1995. Registrant expects that there will be sufficient capital
to fund its operations during fiscal year 1996.
Registrant has no debt and does not anticipate, at this time, that it will
be necessary to seek any debt financing in the near future for ongoing
operations, but may consider some type of financing for other purposes.
<PAGE>
Part II - Other Information
Item 1: Legal Proceedings
None.
Item 2: Changes in Securities
None.
Item 3: Defaults 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
a. Exhibits
Exhibit 27. Financial Data Schedule.
b. Reports on Form 8-K
None.
<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 hereunto duly authorized.
Technology 80, Inc.
Registrant
January 12, 1996 Duane Markus
Date Duane Markus
President, CEO
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> NOV-30-1995
<CASH> 700071
<SECURITIES> 265337
<RECEIVABLES> 512910
<ALLOWANCES> 9000
<INVENTORY> 828178
<CURRENT-ASSETS> 2370313
<PP&E> 428276
<DEPRECIATION> 342056
<TOTAL-ASSETS> 4055191
<CURRENT-LIABILITIES> 206988
<BONDS> 0
<COMMON> 15634
0
0
<OTHER-SE> 3832569
<TOTAL-LIABILITY-AND-EQUITY> 4055191
<SALES> 872071
<TOTAL-REVENUES> 872071
<CGS> 349466
<TOTAL-COSTS> 349466
<OTHER-EXPENSES> 439528
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51
<INCOME-PRETAX> 125602
<INCOME-TAX> 35000
<INCOME-CONTINUING> 90602
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 90602
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
