FORM 10-Q/A#1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-14659
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TECHDYNE, INC.
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(Exact name of registrant as specified in its charter)
Florida 59-1709103
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
2230 West 77th Street, Hialeah, Florida 33016
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(Address of principal executive offices) (Zip Code)
(305) 556-9210
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 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] or No [ ]
Common Stock Outstanding
Common Stock, $.01 par value - 6,556,990 shares as of October 31, 2000
<PAGE>
PART I -- FINANCIAL INFORMATION
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Item 1. Financial Statements
TECHDYNE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Sales $13,616,305 $14,129,152 $38,535,106 $34,420,939
Interest and other income 9,613 11,897 36,404 50,286
----------- ----------- ----------- -----------
13,625,918 14,141,049 38,571,510 34,471,225
Cost and expenses:
Cost of goods sold 11,915,697 12,049,967 34,251,634 30,069,334
Selling, general and administrative
expenses 1,156,151 1,141,873 3,559,468 3,194,070
Interest expense 223,070 212,277 620,705 555,080
----------- ----------- ----------- -----------
13,294,918 13,404,117 38,431,807 33,818,484
----------- ----------- ----------- -----------
Income before income taxes 331,000 736,932 139,703 652,741
Income tax provision 106,661 111,328 152,004 173,760
----------- ----------- ----------- -----------
Net income (loss) $ 224,339 $ 625,604 $ (12,301) $ 478,981
=========== =========== =========== ===========
Earnings (loss) per share:
Basic $.03 $.12 $ -- $.09
==== ==== ==== ====
Diluted $.03 $.10 $ -- $.08
==== ==== ==== ====
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
TECHDYNE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999(A)
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(Unaudited)
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 32,618 $ 190,343
Accounts receivable, less allowances of $70,000 at
September 30, 2000 and $67,000 December 31, 1999 7,600,504 8,074,567
Inventories, less allowances for obsolescence of $836,000 at
September 30, 2000 and $709,000 at December 31, 1999 10,366,881 9,492,309
Prepaid expenses and other current assets 477,836 296,193
Deferred tax asset 440,759 440,759
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Total current assets 18,918,598 18,494,171
Property and equipment:
Land and improvements 177,600 193,200
Buildings and building improvements 685,797 746,036
Machinery and equipment 8,087,481 7,853,621
Tools and dies 724,736 843,202
Leasehold improvements 586,097 559,961
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10,261,711 10,196,020
Less accumulated depreciation and amortization 5,083,139 4,836,365
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5,178,572 5,359,655
Deferred expenses and other assets 82,195 94,435
Costs in excess of net tangible assets acquired, less accumulated
amortization of $422,000 at September 30, 2000
and $317,000 at December 31, 1999 3,138,295 2,848,038
----------- -----------
$27,317,660 $26,796,299
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,106,911 $ 5,049,456
Accrued expenses 1,818,751 1,679,513
Current portion of long-term debt 579,765 576,239
Income taxes payable 109,158 203,043
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Total current liabilities 6,614,585 7,508,251
Deferred gain on sale of real estate 161,047 161,047
Long-term debt, less current portion 8,877,708 7,463,224
Advances from parent 635,103 498,315
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value, authorized 10,000,000 shares; issued
and outstanding 6,596,990 shares at September 30, 2000 and
6,451,990 shares at December 31, 1999 65,970 64,520
Capital in excess of par value 11,623,803 11,371,503
Accumulated deficit (16,746) (4,445)
Accumulated other comprehensive loss (228,160) (102,766)
Notes receivable from options exercised (415,650) (163,350)
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Total stockholders' equity 11,029,217 11,165,462
----------- -----------
$27,317,660 $26,796,299
=========== ===========
</TABLE>
(A) Reference is made to the Company's Annual Report on Form 10-K for the year
ended December 31, 1999 filed with the Securities and Exchange Commission
in March 2000.
See notes to consolidated condensed financial statements.
<PAGE>
TECHDYNE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------
2000 1999
---- ----
<S> <C> <C>
Operating activities:
Net (loss) income $ (12,301) $ 478,981
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:
Depreciation 939,891 893,922
Amortization 132,485 100,397
Provision for inventory obsolescence 361,626 304,665
Bad debt expense --- 1,714
Consultant stock option expense 23,448 8,276
Increase (decrease) relating to operating activities from:
Accounts receivable 411,358 (3,302,919)
Inventories (1,282,154) (2,829,972)
Prepaid expenses and other current assets (214,957) (108,352)
Accounts payable (925,210) 3,520,171
Accrued expenses 174,269 431,321
Income taxes payable (93,802) 41,951
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Net cash used in operating activities (485,347) (459,845)
Investing activities:
Additions to property and equipment, net of minor disposals (806,300) (1,051,912)
Subsidiary acquisition payments (395,806) (1,389,531)
Deferred expenses and other assets (15,899) (16,452)
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Net cash used in investing activities (1,218,005) (2,457,895)
Financing activities:
Line of credit net borrowings (payments) 1,685,093 1,876,490
Other short-term bank borrowings 375,000
Payments on short-term bank borrowings (375,000)
Proceeds from long-term borrowings 150,000 766,667
Payments on long-term borrowings (430,519) (596,805)
Exercise of stock options and warrants 1,450 500
Increase in advances from parent 136,788 44,687
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Net cash provided by financing activities 1,542,812 2,091,539
Effect of exchange rate fluctuations on cash 2,815 (17,224)
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(Decrease) increase in cash and cash equivalents (157,725) (843,425)
Cash and cash equivalents at beginning of year 190,343 1,659,737
----------- -----------
Cash and cash equivalents at end of period $ 32,618 $ 816,312
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
TECHYDNE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
NOTE 1--Summary of Significant Accounting Policies
Consolidation
The consolidated financial statements include the accounts of Techdyne,
Inc. ("Techdyne") and its subsidiaries, including Lytton Incorporated
("Lytton"), Techdyne (Europe) Limited ("Techdyne (Europe)"), and Techdyne
(Livingston) Limited which is a subsidiary of Techdyne (Europe), collectively
referred to as the "Company." All material intercompany accounts and
transactions have been eliminated in consolidation. The Company is a 70.9%
owned subsidiary of Medicore, Inc. (the "Parent"). See Note 5.
Major Customers
A majority of the Company's sales are to certain major customers. The
loss of or substantially reduced sales to any of these customers would have
an adverse effect on the Company's operations if such sales were not replaced.
Inventories
Inventories, which consist primarily of raw materials used in the
production of electronic components, are valued at the lower of cost (first-in,
first-out and/or weighted average cost method) or market value. The cost of
finished goods and work in process consists of direct materials, direct labor
and an appropriate portion of fixed and variable manufacturing overhead.
Inventories are comprised of following:
September 30, December 31,
2000 1999
---- ----
Finished goods $ 696,290 $ 1,018,131
Work in process 2,489,117 2,463,191
Raw materials and supplies 7,181,474 6,010,987
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$10,366,881 $ 9,492,309
=========== ===========
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities is comprised as follows:
September 30, December 31,
2000 1999
---- ----
Accrued compensation $ 459,962 $ 466,481
Other 1,358,789 1,213,032
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$ 1,818,751 $ 1,679,513
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Earnings (Loss) per Share
Diluted earnings per share gives effect to potential common shares that
were dilutive and outstanding during the period, such as stock options and
warrants using the treasury stock method and average market price, shares
assumed to be converted relating to the convertible promissory note to the
Company's Parent (with earnings adjusted for interest expense related to the
convertible promissory note which is assumed to be converted) and contingent
shares for the stock price guarantee for the acquisition of Lytton. No
potentially dilutive securities were included in the diluted earnings per
share computation for the three months or nine months ended September 30,
2000, as a result of exercise prices or net losses, and to include them would
be anti-dilutive.
<PAGE>
TECHYDNE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
NOTE 1--Summary of Significant Accounting Policies--Continued
Following is a reconciliation of amounts used in the basic and diluted
computations:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
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2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) - numerator basic
computation $ 224,339 $ 625,604 $ (12,301) $ 478,981
Effect of dilutive securities:
Interest adjustment on convertible note --- 35,823 --- 105,962
----------- ----------- ----------- -----------
Net income (loss), as adjusted for
assumed conversion-numerator diluted
computation $ 224,339 $ 661,427 $ (12,301) $ 584,943
=========== =========== =========== ===========
Weighted average shares - denominator
basic computation 6,596,990 5,300,167 6,567,884 5,276,541
Effect of dilutive securities:
Stock options --- 53,167 --- 152,879
Contingent stock - acquisition --- 89,855 --- 280,565
Convertible note --- 1,436,529 --- 1,416,364
----------- ----------- ----------- -----------
Weighted average shares, as adjusted -
denominator diluted computation 6,596,990 6,879,718 6,567,884 7,126,349
=========== =========== =========== ===========
Earnings (loss) per share:
Basic $.03 $.12 $ -- $.09
==== ==== ==== ====
Diluted $.03 $.10 $ -- $.08
==== ==== ==== ====
</TABLE>
The Company has various potentially dilutive stock options and warrants.
See Notes 7 and 8.
Comprehensive Income (Loss)
Comprehensive loss consists of the net loss and foreign currency
translation adjustments.
Below is a detail of comprehensive income for the three months and nine
months ended September 30, 2000 and September 30, 1999:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) $ 224,339 $ 625,604 $ (12,301) $ 478,981
Other comprehensive (loss) income:
Foreign currency translation (25,858) 79,449 (125,394) (28,632)
--------- --------- ---------- ---------
Comprehensive income (loss) $ 198,481 $ 705,053 $ (137,695) $ 450,349
========= ========= ========== =========
</TABLE>
New Pronouncements
In June, 1998, the Financial Accounting Standards Board issued Financial
Accounting Standards Board Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (FAS 133). FAS 133 is effective for
fiscal quarters of fiscal years beginning after June 15, 2000. FAS 133
establishes accounting and reporting standards for derivative instruments and
for hedging activities and requires, among other things, that all derivatives
be recognized as either assets or liabilities in the statement of financial
position and that those instruments be measured at fair value. The Company
is in the process of determining the impact that the adoption of FAS 133 will
have on its consolidated financial statements.
<PAGE>
TECHYDNE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
NOTE 2--Interim Adjustments
The financial summaries for the three months and nine months ended
September 30, 2000 and September 30, 1999 are unaudited and include, in the
opinion of management of the Company, all adjustments (consisting of normal
recurring accruals) necessary to present fairly the earnings for such
periods. Operating results for the three months and nine months ended
September 30, 2000 are not necessarily indicative of the results that may be
expected for the entire year ending December 31, 2000.
While the Company believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these
Consolidated Condensed Financial Statements be read in conjunction with the
financial statements and notes included in the Company's latest annual report
for the year ended December 31, 1999.
NOTE 3--Long-term Debt
In February, 2000, the Company refinanced its line of credit and term
loans through the same bank which handles Lytton's financing. One credit
facility is a $4,500,000 three year committed line of credit facility maturing
February, 2003 with interest payable monthly at prime minus 1/4% and an option
to fix the rate for up to 180 days at Libor plus 2.50%. This line of credit
had an outstanding balance of approximately $3,807,000 at September 30, 2000.
The bank also extended a $1,000,000 five year term loan maturing February 2005
with the same interest rate as for the line of credit. This term loan had an
outstanding balance of approximately $883,000 at September 30, 2000. If the
Company achieves certain financial criteria for its year ended December 31,
2000, it would receive a rate reduction under both the prime and Libor
alternatives. The loans are secured by the business assets of the Company and
are cross collateralized with the debt of Lytton. These loans replaced bank
debt which consisted at December 31, 1999 of a line of credit with an
outstanding balance of $1,600,000, term loans with a combined outstanding
balance of approximately $1,552,000 and another bank loan with an outstanding
balance of $145,000. The total principal balance refinanced was approximately
$3,260,000 representing a non-cash financing activity which is a supplemental
disclosure required by Financial Accounting Standards Board Statement No. 95,
"Statement of Cash Flows" (FAS 95). The refinancing also included payment of
approximately $17,000 accrued interest.
In conjunction with the Company's refinancing, the bank amended the terms
of the Lytton line of credit and term loan and equipment loan agreements to
make Lytton's line of credit a three year committed facility and to amend the
interest rates on Lytton's line of credit, term loan and equipment loan
agreements to coincide with those of the Company's loan agreements.
Lytton has a $3,000,000 three year committed line of credit facility
maturing February 2003 with interest payable monthly at prime minus 1/4%.
There was an outstanding balance on this loan of approximately $2,985,000 at
September 30, 2000 and $2,830,000 December 31, 1999. Lytton has a $1,400,000
installment loan with interest at prime minus 1/4% and monthly payments of
$23,333 plus interest payable in 60 monthly installments having commenced
August 1, 1999 with the final installment due June 30, 2004. The balance
outstanding on this loan was approximately $1,091,000 at September 30, 2000
and $1,283,000 at December 31, 1999. Lytton also has a $500,000 equipment
loan agreement with the same bank payable through June 30, 2004 with interest
at prime minus 1/4%. This loan had an outstanding balance of $150,000 at
September 30, 2000 with no outstanding balance as of December 31, 1999. All
of these bank loans are secured by the business assets of Lytton and all have
an option to fix the rate for up to 180 days at Libor plus 2.50%.
The prime rate was 9.50% as of September 30, 2000, and 8.50% as of
December 31, 1999.
<PAGE>
TECHYDNE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
NOTE 3--Long-term Debt-Continued
Lytton has an equipment loan at an annual interest rate of 5.5% maturing
in April 2001 with monthly payments of principal and interest of $4,298. This
loan had a balance of approximately $78,000 at September 30, 2000 and $113,000
at December 31, 1999 and is secured by equipment.
In July 1994, Techdyne (Europe) purchased the facility housing its
operations obtaining a 15 year mortgage which had a U.S. dollar equivalency
of approximately $421,000 at September 30, 2000 and $489,000 at December 31,
1999 based on exchange rates in effect at each of these dates.
Interest payments on debt amounted to approximately $209,000 and $554,000
for the three months and nine months ended September 30, 2000 and $151,000 and
$405,000 for the same periods of the preceding year.
NOTE 4--Income Taxes
The Company files separate federal and state income tax returns from its
Parent, with its income tax liability reflected on a separate return basis.
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. For financial reporting
purposes a valuation allowance has been recognized to offset a portion of the
deferred tax assets.
The Company had domestic income tax expense of approximately $107,000 and
$152,000 for the three months and nine months ended September 30, 2000 and
$111,000 and $174,000 for the same periods of the preceding year.
Techdyne (Europe) had no income tax expense or benefit for the three
months or nine months ended September 30, 2000 or for the same periods of the
preceding year due to its loss and it having utilized all available tax loss
carrybacks.
Income tax payments amounted to $1,000 and $343,000 for the three months
and nine months ended September 30, 2000 and $30,000 and $132,000 for the same
periods of the preceding year.
NOTE 5--Transactions with Parent
The Parent provides certain financial and administrative services to the
Company under a service agreement. The amount of expenses covered under the
service agreement totaled $90,000 and $270,000 for the three months and nine
months ended September 30, 2000 and $102,000 and $306,000 for the same periods
of the preceding year.
Advances from our Parent were made under a demand convertible promissory
note with interest at 5.7%. On September 30, 1999, the Parent converted the
note balance of approximately $2,532,000, including accrued interest, into
approximately 1,447,000 shares of the Company's common stock. Advances from
the Parent on the balance sheet represent an advance payable to the Parent of
approximately $635,000 at September 30, 2000 and $498,000 at December 31, 1999
with interest at 5.7%. Interest on the advances and convertible note amounted
to approximately $8,000 and $22,000 for the three months and nine months ended
September 30, 2000 and $45,000 and $134,000 for the same periods of the
preceding year and is included in the net balance due the Parent.
The Company had manufactured certain products for the Parent. Sales of
the products were $23,000 for the three months and nine months ended September
30, 1999. After the first quarter of 2000, the Company ceased manufacturing
for the Parent.
<PAGE>
TECHYDNE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
NOTE 6--Commitments and Contingencies
Lytton sponsors a 401(k) Profit Sharing Plan covering substantially all
of its employees. The Company adopted this plan as a participating employer
effective July 1, 1998. The discretionary profit sharing and matching
expense, including that of the Company and Lytton amounted to approximately
$10,000 and $62,000 for the three months and nine months ended September 30,
2000 and approximately $24,000 and $63,000 for the same periods of the
preceding year.
Lytton leases its operating facilities from an entity owned by the former
President and currently the part-time Assistant to the President of Lytton and
his wife, the former owner of Lytton. The lease expires July 31, 2002 and
requires annual lease payments of approximately $218,000, adjusted each year
based upon the Consumer Price Index. During the nine months ended September
30, 2000, approximately $169,000 was paid under the lease compared to
approximately $164,000 for the same period of the preceding year.
NOTE 7--Stock Options
In May 1994, the Company adopted a stock option plan for up to 250,000
options. The options were exercisable at $1 per share through May 24, 1999.
On June 30, 1998, 115,000 of these options were exercised and on May 10, 1999,
50,000 of the remaining options were exercised. The Company received cash
payment of the par value and the balance in three year promissory notes,
presented in the stockholders' equity section of the balance sheet, with
interest at 5.16% for the June 1998 exercises and 4.49% for the May 1999
exercises.
On February 27, 1995 the Company granted non-qualified stock options to
directors of Techdyne and its subsidiaries for 142,500 shares exercisable at
$1.75 per share for five-years. In April 1995, the Company granted a non-
qualified stock option for 10,000 shares to its general counsel at the same
price and terms as the directors' options. On February 25, 2000, 145,000 of
these options were exercised. The Company received cash payment of the par
value and the balance in three year promissory notes, presented on the
stockholders' equity section of the balance sheet, with interest at 6.19%.
In June 1997, the Company adopted a stock option plan for up to 500,000
options, and pursuant to this plan the board granted 375,000 options exer-
cisable for five years through June 22, 2002 at $3.25 per share, with 325,000
of these options outstanding at September 30, 2000. On June 30, 1999, the
Company granted 52,000 options exercisable for three years through September
29, 2002 at $4.00 per share with 10,000 options outstanding at September 30,
2000. On August 25, 1999, the Company granted 16,000 options exercisable for
three years through August 24, 2002 at $4.00 per share with 13,000 options
outstanding at September 30, 2000. On December 15, 1999 the Company granted
19,000 options exercisable for three years through December 14, 2002 at $4.00
per share with 13,000 options outstanding at September 30, 2000. On May 24,
2000, the Company granted 3,000 options exercisable for three years through
May 23, 2003 at $4.00 per share, which remain outstanding at September 30,
2000. On October 16, 2000, the Company granted 90,000 three year stock
options with one-third of the options vesting immediately, one-third vesting
on October 16, 2001 and one-third vesting on October 16, 2002.
In May, 1998, as part of the consideration pursuant to an agreement for
investor relations and corporate communications services, the Company granted
options for 25,000 shares of its common stock exercisable for three years
through May 14, 2001 at $4.25 per share. Options for 6,250 shares of the
Company's common stock vested during 1998 with no additional options to vest
due to cancellation of this agreement in August, 1998.
The Company entered into a consulting agreement on July 1, 1999 for
financial advisory services, which agreement ended on September 15, 2000.
The consultant received non-qualified stock options to purchase 100,000
shares of the Company's common stock exercisable at $3.50 per share that
expired on September 15, 2000. These options were valued at $40,000 and
resulted in approximately $7,000 and $23,000 expense during the three months
and nine months ended September 30, 2000.
<PAGE>
TECHYDNE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
NOTE 8--Common Stock
In conjunction with the Company's 1995 public offering, the underwriter
received warrants to purchase 100,000 shares of common stock and/or 100,000
warrants exercisable through September 12, 2000 at $6.60 per share of common
stock and $.25 per warrant with each warrant exercisable into common stock at
$8.25 per share. All of these warrants expired unexercised.
NOTE 9--Acquisition
On July 31, 1997, the Company acquired Lytton, which manufactures and
assembles printed circuit boards and other electronic products, for $2,500,000
cash, paid at closing, and issuance of 300,000 shares of the Company's common
stock. The Company guaranteed that the seller would realize a minimum of
$2,400,000 from the sale of these shares of common stock based on Lytton
having achieved certain earnings objectives. The total purchase price in
excess of the fair value of net assets acquired is being amortized over 25
years. Additional contingent consideration was due if Lytton achieved pre-
defined sales levels. Additional consideration of approximately $396,000,
$290,000 and $154,000 was paid in April 2000, April 1999 and April 1998,
respectively, based on sales levels. As the contingencies have been resolved,
additional consideration due, has been recorded as goodwill, and is being
amortized over the remainder of the initial 25 year life of the goodwill.
In July, 1998, the Company advanced the seller approximately $1,278,000
("Advance") toward the guarantee for the sale of the Company's common stock
in addition to the prior sales by the seller. Subsequently, the Company
guaranteed the seller aggregate proceeds of no less than $1,100,000 from the
sale of the remaining common stock if sold on or prior to July 31, 1999. In
July, 1999, the Company forgave the Advance and issued payment of $1,100,000
to the seller, which together with the proceeds realized by the seller from
the sale of stock in 1998 satisfied the Company's remaining obligation under
the $2,400,000 guarantee. The remaining 295,000 shares of common stock held
by the seller as security for the remaining $2,378,000 guarantee were returned
to the Company and were cancelled.
NOTE 10--Repurchase of Common Stock
In October, 2000, the Company repurchased 40,000 shares of its common
stock for approximately $31,000. The Company currently has no formal plan to,
but may repurchase additional shares.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amended Quarterly Report on Form
10-Q/A#1 to be signed on its behalf by the undersigned thereunto duly
authorized.
TECHDYNE, Inc.
/s/ Daniel R. Ouzts
By-----------------------------------
DANIEL R. OUZTS, Vice President/
Finance, Controller and Principal
Accounting Officer
Dated: November 14, 2000
