<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
Commission File No. 0-16335
OZO DIVERSIFIED AUTOMATION, INC.
7450 East Jewell Avenue, Suite A
Denver, Colorado 80231
Telephone: (303) 368-0401
Colorado 84-0922701
(State of Incorporation) (IRS Employer Identification No.)
Indicate by check mark whether the Issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 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 March 31, 1996, Registrant had 452,664 shares of its $.10
par value common stock outstanding.
1
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PART I - FINANCIAL INFORMATION
OZO Diversified Automation, Inc.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 19,636 $ 3,162
Accounts and notes receivable, net
of allowance for doubtful accounts
of $11,022 (1995) 326,895 180,960
Inventories (Note 3) 419,551 506,396
Prepaid expenses 0 15,144
Other 2,082 0
------------ ------------
Total Current Assets 768,164 705,662
------------ ------------
PROPERTY AND EQUIPMENT
Manufacturing 160,186 160,186
Furniture and fixtures 154,062 154,062
Capitalized Lease 14,620 14,620
Vehicle 10,820 10,820
------------ ------------
339,688 339,688
Less accumulated depreciation 319,297 315,909
------------ ------------
Total Property and Equipment 20,391 23,779
OTHER ASSETS
Deferred financing costs 22,424 24,380
------------ ------------
Total Assets $ 810,979 $ 753,821
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements
2
<PAGE>
PART I - FINANCIAL INFORMATION (CONTINUED)
OZO DIVERSIFIED AUTOMATION, INC.
BALANCE SHEETS (CONTINUED)
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(UNAUDITED)
<S> <C> <C>
CURRENT LIABILITIES
Current portion of notes payable $ 19,730 $ 22,899
Accounts payable and accrued
expenses 507,617 522,780
Note Payable - Bank 80,000 27,500
------------ -----------
Total Current Liabilities 607,347 573,179
------------ -----------
OTHER LIABILITIES
Long Term Debt and Capitalized
Lease Obligation 246,034 248,406
Total Liabilities 853,381 821,585
------------ -----------
SHAREHOLDERS' DEFICIENCY
Preferred stock, $.10 par value
authorized 1,000,000 shares
issued - none
Common stock, $.10 par value
authorized, 5,000,000 shares
issued and outstanding -
452,664 shares (1996)
452,664 shares (1995) 45,261 45,261
Capital in excess of par value 1,169,809 1,169,809
Accumulated deficit (1,257,472) (1,282,834)
----------- -----------
Total Shareholders' Deficiency (42,402) (67,764)
----------- -----------
Total Liabilities &
Stockholders' Deficiency $ 810,979 $ 753,821
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements
3
<PAGE>
OZO DIVERSIFIED AUTOMATION, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Net Sales $ 712,550 $ 293,702
Cost of Sales 380,413 167,933
----------- -----------
Gross Profit 332,137 125,769
Operating Expenses:
Marketing & Sales 129,867 61,725
Research & Development 40,371 40,533
General and Administrative 136,537 94,906
----------- -----------
306,775 197,164
----------- -----------
Income (loss) before taxes 25,362 (71,395)
----------- -----------
Provision for Income Taxes 5,072 0
Income Taxes (benefit) (5,072) 0
NET INCOME (LOSS) $ 25,362 $ (71,395)
----------- -----------
----------- -----------
EARNINGS (LOSS) PER COMMON SHARE $ 0.06 $ (0.16)
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements
4
<PAGE>
OZO DIVERSIFIED AUTOMATION, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net Income (loss) $ 25,362 $ (71,395)
Adjustments to reconcile
net loss to net cash used in
operating activities:
Depreciation 3,388 4,703
Amortization of deferred
financing costs 1,957 1,957
Other (2,082) (2,697)
Decrease (increase) in assets:
Accounts receivable (145,936) (6,236)
Inventories 86,845 (106,491)
Prepaid expenses 15,144 13,270
Increase (decrease) in accounts
payable and accrued expenses 37,337 131,342
----------- -----------
Total adjustments (3,347) 35,848
----------- -----------
Net cash used in operating
activities 22,015 (35,547)
----------- -----------
Cash flows from investing activities:
Capital Expenditures 0 0
----------- -----------
Net cash provided (used) in
investing activities 0 0
----------- -----------
Cash flows from financing activities:
Increase (decrease) in notes payable (5,541) (1,272)
----------- -----------
Net cash provided (used) by
financing activities (5,541) (1,272)
----------- -----------
Net increase (decrease) in cash 16,474 (36,819)
Cash at beginning of period 3,162 47,111
----------- -----------
Cash at end of period $ 19,636 $ 10,292
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements
5
<PAGE>
OZO DIVERSIFIED AUTOMATION, INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
In the opinion of management of OZO Diversified Automation, Inc. (the
Company), the accompanying unaudited financial statements reflect all
adjustments (consisting only of normal recurring accruals) necessary to
present fairly the financial position of the Company as of March 31, 1996
and the results of operations and changes in financial position for the
three months ended March 31, 1996.
The results of operations for the three months ended March 31, 1996 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1996.
These unaudited financial statements should be read in conjunction with the
Company's annual report on Form 10-KSB for the year ended December 31, 1995.
NOTE 1 - A summary of significant accounting policies is currently
on file with the Securities and Exchange Commission on
Form 10-KSB.
NOTE 2 - Income Taxes:
At December 31, 1995, the Company had net operating loss
carryforwards totaling approximately $1,119,000 that may be
offset against future taxable income through 2010 and research
and development credits of approximately $63,000 expiring
through 2010.
The Company has fully reserved the tax benefits of these
operating losses because the likelihood of realization of the
tax benefits cannot be determined. These carryforwards are
subject to review by the Internal Revenue Service.
Temporary differences between the time of reporting certain items
for financial and tax reporting purposes, primarily from using
different methods of reporting depreciation costs and warranty and
vacation accruals, are not considered significant by management
of the Company.
NOTE 3 - Inventories:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
<S> <C> <C>
Raw Materials $ 321,406 $ 293,230
Work in process 79,312 81,521
Finished Goods 18,833 131,645
------------- ------------
$ 419,551 $ 506,396
------------- ------------
</TABLE>
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
During the quarter ended March 31, 1996, the Company had revenues of
$712,550, a 243% increase from revenues of $293,702 for the comparable
period in 1995.
The net income for the period was $25,362 compared to a loss of $71,395 in
1995. Working capital, although limited is expected to be adequate to fund
operations and order backlogs. First quarter 1996 revenues were augmented
by shipments of three PanelMASTER HS systems, first introduced in February
1995, and three PanelROUTER SI systems introduced in 1994. These higher
priced products were developed by the Company over the past two years at
considerable expense to keep the Company viable in a marketplace that
demanded higher speed performance and factory automation requirements.
Both of these products continue to be well received in the industry.
Management is continuing focused marketing efforts in the depaneling
application. One PanelMASTER HS and three PanelROUTER SI units are
currently on order backlog.
As of May 8, 1996 the Company had a backlog of open orders of $490,000
compared to a backlog at May 5, 1995 of $590,000. The current backlog of the
Company and forecasted orders in management's opinion provide the opportunity
for the Company to continue as a going concern.
7
<PAGE>
PART II - OTHER INFORMATION
OZO Diversified Automation, Inc.
Items 1-5 Not Applicable.
Item 6 Exhibits and Reports on Form 8-K
a) Exhibits - none.
b) No Reports on Form 8-K were filed during the quarter
ending March 31, 1996.
8
<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 thereunto duly authorized.
OZO DIVERSIFIED AUTOMATION, INC.
By: Marjorie Zimdars-Orthman
Marjorie Zimdars-Orthman
Principal Executive Officer
Principal Financial Officer
Dated: May 13, 1996
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 19,636
<SECURITIES> 0
<RECEIVABLES> 326,895
<ALLOWANCES> 0
<INVENTORY> 419,551
<CURRENT-ASSETS> 768,164
<PP&E> 339,688
<DEPRECIATION> 319,297
<TOTAL-ASSETS> 814,426
<CURRENT-LIABILITIES> 607,347
<BONDS> 240,000
0
0
<COMMON> 45,261
<OTHER-SE> (2,859)
<TOTAL-LIABILITY-AND-EQUITY> 810,979
<SALES> 712,550
<TOTAL-REVENUES> 712,550
<CGS> 380,413
<TOTAL-COSTS> 380,413
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 25,362
<INCOME-TAX> 5,072
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,362
<EPS-PRIMARY> .06
<EPS-DILUTED> 0
</TABLE>
