<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
November 14, 1997
---------------------------------
Date of Report
(Date of Earliest Event Reported)
TOPRO, INC.
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(Exact name of Registrant as specified in its charter)
Colorado 0-19167 84-1042227
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File No.) I. D. Number)
2525 West Evans Avenue, Denver, Colorado 80219
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(Address of principal executive offices) (zip code)
(303) 935-1221
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On November 14, 1997 the Company announced results of operations for the
quarter ended September 30, 1997. The Company's Press Release dated November
14, 1997, which is filed as Exhibit 20.1 hereto, is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) Exhibits. The following exhibit is filed with this Report:
20.1 Press Release dated November 14, 1997
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Topro, Inc.
Date: November 14, 1997 By: /s/ John Jenkins
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John Jenkins
President and CEO
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EXHIBIT 20.1
PRESS RELEASE
TOPRO, INC.
Topro, Inc.
2525 W. Evans Ave.
Denver, CO 80219
PRESS RELEASE
TOPRO, INC. ANNOUNCES RECORD REVENUE FOR THE QUARTER ENDING 9/30/97 AND
ADDITIONAL Y2K ENGAGEMENTS
November 14, 1997 - Topro Inc. d.b.a. TAVA Technologies, Inc., (NASDAQ: TPRO)
Denver, Colorado, a leading provider of automation and information technology
solutions to industry, announced results for its first fiscal quarter ending
September 30, 1997 and additional Y2K engagements for its Plant Y2K One product
and services.
Revenues for the quarter increased 42% to a record $11,319,000 from
$7,967,000 recorded in the first fiscal quarter in 1997. Gross margins
increased by 33% to $3,825,000 (34% of revenue) from $2,885,000 (36%) in the
first quarter of 1997. The company recorded a net loss of $575,000 and a net
loss attributable to common shareholders of $605,000 ($.04 per share).
John Jenkins, CEO commented, "We are pleased with the revenue and gross margin
growth in the base business, particularly since, during the quarter, the company
had from 15 to 20 engineers diverted from billable project work to PlantY2K One
product development. Had these engineers been dedicated to base business
projects, revenues would have been considerably higher. Our decision to make
this heavy resource commitment paid off in the on-time release of our CD-ROM
product, resulting in strong acceleration in market interest."
Jenkins added, "Customer response to our Plant Y2K One CD ROM product has
been very positive. As a result of rapid customer acceptance and our early
investment in sales and marketing, we would expect to see growing revenue and
gross profit contribution beginning in our fiscal Q2, with significant
contribution in Q3.
Doug Kelsall, CFO noted that earnings before taxes, interest, depreciation and
amortization were $42,000. "During the first quarter, operating expense were up
sharply as the company was investing heavily in the PlantY2K One product rollout
and in development of the infrastructure necessary to support the company's
anticipated growth. As a direct result of the accelerating interest in the
product, major client presentations, proposal work, production of promotional
materials and pre-CD release technical demonstrations were all at a scale much
greater than originally planned.
Kelsall added, "The company also incurred significant expenses for recruiting,
internal training and travel associated with developing distribution channels
and administrative support functions. We expect these expenses to continue to
remain high in the near term as we expand our Y2K market position, but decline
as a percent of sales as revenues increase."
Interest expense was down slightly due to the conversion of $2,685,000 of the
company's subordinated debentures. A full quarter effect was not realized due
to the timing of the conversion.
As a general update to the company's Year 2000 activity, Jenkins, offered the
following:
"Our Year 2000 business opportunity is accelerating faster than our initial
expectations". The initial release of our CD-ROM based methodology and tools,
on schedule in mid-October, was an important step. The initial production CD's
have been used internally and have not been available for third party sale. Our
second production run of 20,000 is on schedule for completion on November 20.
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Our total engagement count now exceeds 25 clients covering more than 60 sites.
New clients include Cyprus Amax Minerals, Kennecott, Unilever Foods North
America, and Ivax Pharmaceuticals among others. While many clients are still in
the pilot stage, developing program cost models for their 1998 budgets others
are accelerating dramatically their activity. Unilever Foods has tasked us to
complete the assessment and analysis phases on their U.S. and Canadian plants
before the end of November. A similar engagement with Ivax covers a number of
domestic and international operations with a completion target of January 1998.
In the past three weeks, the company has received orders for more than
$1,500,000 of PlantY2K One product and services, and expects to close up to
another $2,000,000 in the next 30 to 45 days. These orders represent primarily
initial inventory and assessment tasks, and include little remediation effort.
As a raw measure of our activity level, we are in various stages of negotiation
with a large number of multi-plant organizations that cover approximately 3,000
plant sites. These include both domestic and international operations.
The company's position as a provider of Year 2000 solutions in factory
automation and process control has gained significant additional recognition.
Specifically, we will be presenting at the Year 2000 Conference & Expo in
Boston on Tuesday, November 18th where we have been asked to address
specifically manufacturing and control system strategies.
Further, the company has developed alliance relationships with information
technology service companies active in addressing Year 2000 compliance in
business systems. This has already led to a number of joint proposals providing
prospective clients with full scope Year 2000 service.
To meet the accelerating demand for our products and services, the company is
actively recruiting and has been successful in several key placements. One of
these was the recent appointment of Ken Owen as Vice President of Business
Development. Owen was recently the Director of Systems Integration at Fluor
Daniel and an early leader in the recognition of Year 2000 issues in factory
automation systems.
The company is continuing development of specific product variations of the
Plant Y2K One suite. Of particular promise is a product targeted for the
utility industry.
Statements made in this Press Release that are not historical or current facts
are "forward-looking statements" made pursuant to the safe harbor provisions of
federal securities laws. Forward-looking statements represent management's best
judgment as to what may occur in the future, but are subject to certain risks
and uncertainties that could cause actual results and events to differ
materially from those presently anticipated or projected. Such factors include
adverse economic conditions, entry of new and stronger competitors, inadequate
capital, unexpected costs, failure to integrate operations of recently acquired
subsidiaries and failure to capitalize upon access of new clientele. Specific
risks and uncertainties which may affect forward-looking statements about the
Company's Plant Y2K One-TM- business and prospects include the possibility that
a competitor will develop a more comprehensive or less expensive Y2K solution,
and delays in market awareness of Topro and its product and service solutions.
These factors and others are discussed in the "Management's Discussion and
Analysis" section of the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1997, to which reference should be made.
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TOPRO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the three months
ended September 30,
1997 1996
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<S> <C> <C>
REVENUES $11,319,000 $7,967,000
COST OF SALES 7,494,000 5,082,000
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GROSS PROFIT 3,825,000 2,885,000
EXPENSES:
Sales expenses 827,000 598,000
General and administrative expenses 3,151,000 1,932,000
Amortization of capitalized software and goodwill 276,000 103,000
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4,254,000 2,633,000
OTHER INCOME (EXPENSE):
Gain (loss) on sale of assets -- ( 3,000)
Interest expense ( 165,000) ( 172,000)
Other 19,000 4,000
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( 146,000) (171,000)
NET INCOME (LOSS) $( 575,000) $ 81,000
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NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS $( 605,000) $ 81,000
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NET INCOME (LOSS) PER SHARE $( 0.04) $ 0.01
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WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING DURING THE PERIOD 15,030,634 7,841,716
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</TABLE>
Topro, Inc.
Condensed Balance Sheet
As of September 30,1997
ASSETS LIABILITIES AND OWNERS
EQUITY
Current Assets 14,269,000 Current Liabilities 10,172,000
Fixed Assets Net of Long Term Liabilities 2,774,000
Depreciation 2,624,000
Goodwill 8,373,000 Owners Equity 15,488,000
Other Assets 3,168,000
TOTAL ASSETS $28,434,000 TOTAL LIABILITIES AND
OWNERS EQUITY $28,434,000
