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 FEBRUARY
29, 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 0-13870
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
(UNAUDITED)
<CAPTION>
ASSETS February 29, August 31,
1996 1995
CURRENT ASSETS ------------ -----------
<S> <C> <C>
Cash and cash equivalents $ 656,609 $ 926,163
Short-term investments 105,612 917,271
Accounts receivable (less allowance for doubtful
accounts: Feb. 29 - $9,000; Aug. 31 - $9,000) 543,174 506,815
Inventories 830,123 797,794
Deferred taxes - 43,000
Other current assets 37,298 41,945
---------- ----------
TOTAL CURRENT ASSETS 2,172,816 3,232,988
---------- ----------
PROPERTY AND EQUIPMENT
Furniture and equipment 415,043 402,752
Leasehold improvements 23,060 23,060
---------- ----------
438,103 425,812
Less accumulated depreciation 348,893 335,625
---------- ----------
89,210 90,187
---------- ----------
OTHER ASSETS
Investments 2,252,408 831,200
Deferred taxes 25,000 41,000
---------- ----------
2,277,408 872,200
---------- ----------
TOTAL ASSETS $4,539,434 $4,195,375
========== ==========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable $ 189,339 $ 51,000
Accrued payroll and payroll taxes 122,285 172,517
Accrued liabilities - other 34,735 42,016
---------- ----------
TOTAL CURRENT LIABILITIES 346,359 265,533
---------- ----------
DEFERRED INCOME TAXES 67,500 72,000
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value (authorized -
5,000,000 shares; issued and outstanding -
Feb. 29, 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 on available-for-sale securities 100,989 83,091
Retained earnings 797,022 550,191
---------- ----------
4,125,575 3,857,842
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,539,434 $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 Six months ended
February 29, February 29,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES $1,061,504 $ 818,424 $1,933,575 $1,616,653
COST OF GOODS SOLD 440,014 303,024 789,480 582,404
---------- ---------- ---------- ----------
GROSS PROFIT 621,490 515,400 1,144,095 1,034,249
---------- ---------- ---------- ----------
OPERATING EXPENSES
General and administrative 113,594 100,464 239,514 192,447
Research and development 145,636 109,451 283,289 213,428
Selling 160,111 147,713 336,065 313,024
---------- ---------- ---------- ----------
TOTAL OPERATING EXPENSES 419,341 357,628 858,868 718,899
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS 202,149 157,772 285,227 315,350
OTHER INCOME 46,080 29,828 88,604 53,308
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 248,229 187,600 373,831 368,658
PROVISION FOR INCOME TAXES 92,000 69,125 127,000 124,750
---------- ---------- ---------- ----------
NET INCOME $ 156,229 $ 118,475 $ 246,831 $ 243,908
========== ========== ========== ==========
EARNINGS PER SHARE $0.09 $0.07 $0.14 $0.15
===== ===== ===== =====
<F02>
See notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
TECHNOLOGY 80 INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Six months ended
February 29,
1996 1995
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 246,831 $ 243,908
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 13,525 11,973
Deferred taxes 59,000 121,500
Gain on sale of investments (28,576) 0
Gain on sale of fixed asset (62) 0
Changes in operating assets and liabilities:
Accounts receivable (36,359) 59,774
Inventories (32,329) 3,312
Other current assets 4,647 (17,889)
Accounts payable 138,339 86,770
Due to related parties 0 (24,500)
Accrued liabilities (57,513) (63,878)
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 307,503 420,970
---------- ----------
INVESTING ACTIVITIES
Proceeds from sale of equipment 1,350 0
Purchase of equipment (13,836) (26,491)
Proceeds from sales and maturities of investments 1,108,811 0
Purchases of investments (1,676,386) (607,372)
Repayment of other - loans 1,442 2,979
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (578,619) (630,884)
---------- ----------
FINANCING ACTIVITIES
Proceeds from exercise of stock options 1,562 8,203
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,562 8,203
---------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (269,554) (201,711)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 926,163 458,433
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 656,609 $ 256,722
========== ==========
<F03>
See notes to condensed financial statements.
</TABLE>
<PAGE>
TECHNOLOGY 80 INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
February 29, 1996
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. The condensed
balance sheet at August 31, 1995 has been derived from the
audited financial statements at that date but does not include
all of the information and footnotes required by generally
accepted accounting principles for complete financial
statements. 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 1,732,490 for the quarter
ended February 29, 1996 and 1,648,417 for the quarter ended
February 28, 1995.
<PAGE>
Item 2: Management's Discussion and Analysis
Results of Operations
Revenues for the second quarter ended February 29, 1996 increased
30% over the same period the preceding year and increased 20% for
the six months ended February 29, 1996. The revenue increase for
the three and six months ended February 29, 1996 was due to an
increase in sales volume. Registrant's backlog is up 86% since
fiscal year end August 31, 1995. The backlog is deliverable
within the next twelve months or less and is cancelable.
Gross profit percentages for the second quarter ended February
29, 1996 and February 28, 1995 was 59% and 63% respectively.
Gross profit percentages for the six months ended February 29,
1996 was 59% compared to 64% for the six months ended February
28, 1995. 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 40% for the three
months and 44% for the six months ended February 29, 1996
compared to 44% for the same periods the prior year.
Other income increased $16,252 for the quarter ended February 29,
1996 and increased $35,296 for the six months ended February 29,
1996 from the same periods the preceding year. The increase was
primarily due to increased investment income.
Net income was $156,229 and $118,475 for the quarter ended
February 29, 1996 and February 28, 1995 respectively. This
represents a 32% increase. For the six months ended February 29,
1996 and 1995, net income was $246,831 and $243,908 respectively.
Liquidity and Capital Resources
Registrant's balance sheet shows a strong capital position.
Operations provided $307,503 in cash compared to $420,970 the
same period the prior year. Cash and cash equivalents decreased
$269,554 since August 31, 1995. The company used $580,061 to
purchase investments and equipment 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 11 -- Statement Re: Computation of Per-Share Earnings
(following signature page)
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)
April 12, 1996 /s/ Duane Markus, President, CEO
(Date) Duane Markus, President, CEO
<TABLE>
Exhibit 11 -- Statement Re: Computation of Per-Share Earnings
<CAPTION>
Three months ended Six months ended
February 29, February 29,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Primary
Average shares outstanding 1,563,420 1,553,433 1,562,922 1,553,177
Net effect of dilutive stock
options - based on the treasury
stock method using average
market price 169,070 94,984 166,404 92,331
--------- --------- --------- ---------
Total 1,732,490 1,648,417 1,729,326 1,645,508
========= ========= ========= =========
Net income $156,229 $118,475 $246,831 $243,908
======== ======== ======== ========
Per-share amount $0.09 $0.07 $0.14 $0.15
===== ===== ===== =====
Fully Diluted
Average shares outstanding 1,563,420 1,553,433 1,562,922 1,553,177
Net effect of dilutive stock
options - based on the treasury
stock method using the quarter
end market price, if higher
than average market price 169,070 97,866 171,968 96,196
--------- --------- --------- ---------
Total 1,732,490 1,651,299 1,734,890 1,649,373
========= ========= ========= =========
Net income $156,229 $118,475 $246,831 $243,908
======== ======== ======== ========
Per-share amount $0.09 $0.07 $0.14 $0.15
===== ===== ===== =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> FEB-29-1996
<CASH> 656609
<SECURITIES> 105612
<RECEIVABLES> 552174
<ALLOWANCES> 9000
<INVENTORY> 830123
<CURRENT-ASSETS> 2172816
<PP&E> 438103
<DEPRECIATION> 348893
<TOTAL-ASSETS> 4539434
<CURRENT-LIABILITIES> 346359
<BONDS> 0
0
0
<COMMON> 15634
<OTHER-SE> 4109941
<TOTAL-LIABILITY-AND-EQUITY> 4539434
<SALES> 1933575
<TOTAL-REVENUES> 1933575
<CGS> 789480
<TOTAL-COSTS> 789480
<OTHER-EXPENSES> 858868
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 600
<INCOME-PRETAX> 373831
<INCOME-TAX> 127000
<INCOME-CONTINUING> 246831
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 246831
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
