<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
May 12, 1998
--------------
Date of Report
(Date of Earliest Event Reported)
TAVA TECHNOLOGIES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Colorado 0-19167 84-1042227
------------------------------- ----------- ----------------
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File No.) I. D. Number)
7887 E. Belleview Avenue, Suite 820
Englewood, Colorado 80111
- ---------------------------------------- ----------
(Address of principal executive offices) (zip code)
(303) 771-9794
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS.
On May 12, 1998 the Company announced results of operations for the quarter
and nine month period ended March 31, 1998. The Company's Press Release dated
May 12, 1998, 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 May 12, 1998
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.
TAVA Technologies, Inc.
Date: May 12, 1998 By: /s/ John Jenkins
- --------------------- -------------------
John Jenkins, President and CEO
<PAGE>
EXHIBIT 20.1
PRESS RELEASE
TAVA TECHNOLOGIES, INC. ANNOUNCES RESULTS FOR THE QUARTER ENDING MARCH 31,1998
May 12, 1998/Englewood CO/ TAVA Technologies, Inc. (NASDAQ Small Cap: TAVA), a
leading provider of automation and information technology solutions for
industry, announced results for its third fiscal quarter ending March 31,1998.
Revenues for the quarter were $11,667,000 representing an increase of
$484,000 or 4.3% compared to $11,183,000 recorded in the quarter ending March
31, 1997. Gross profit was $5,170,000 (44.3% of revenue), an increase of
$1,036,000 or 25% compared to $4,134,000 (37.0% of revenue) recorded in the
quarter ending March 31, 1997. The company recorded earnings before taxes,
interest, depreciation and amortization of $931,000 and net income of
$301,000 ($.02 per share, basic and $.01 per share diluted). The company
noted that the March 1997 quarter was an unusually strong quarter with
results heavily influenced by one contract for the IBM facility in Manassas
Virginia.
For the nine months ending March 31, 1998, revenues were $33,470,000
representing an increase of $6,183,000 or 22.7% from the $27,287,000 recorded
for the nine months ending March 31,1997. The Company recorded earnings before
taxes, interest, depreciation and amortization of $968,000 and a net loss of
$855,000 (a net loss of $915,000 applicable to common shareholders) for the nine
months ending March 31, 1998 ( $.05 loss per share, basic).
John Jenkins, CEO, stated: "Though we recorded over $3,500,000 of Y2k
related revenue in this quarter, most of our clients' roll-out of full Y2k
programs did not occur as early in the quarter as we had expected.
Specifically, our staff additions were heavily loaded in late February and
March. Even so, total revenue was up sharply over the quarter ending
December 31, 1997. Our top line showed an increase of almost $1,200,000 or
10%. Further, the material and subcontract resale content of our total
revenue line decreased by more than $1,100,000 from the prior quarter. When
combined, these two elements combined to put quarter to quarter growth in
service and software revenue at more than $2,500,000 or 20%. We expect our
service and software revenue to continue to grow as we face sharply
accelerating demand."
Jenkins added, "Our improved gross margin was driven by increased Y2k service
and software content, and the lower material and subcontract content. We
expect that gross margins will continue to increase as software sales grow in
revenue contribution and our Y2k billing rates have greater effect on total
mix."
Doug Kelsall, CFO, noted: "Sales, General and Administrative expenses
(excluding amortization expenses) were $4,365,000 or 37.4% of revenue.
During the quarter, sales expense continued high as the company continued to
make significant investment in marketing its Y2k One-TM- products and
services. During the quarter, we also began to amortize development expenses
associated with our Y2k One-TM- product suite. Total amortization expense was
$383,000 in the quarter with $151,000 associated with the Y2k One-TM- product
suite."
3
<PAGE>
Kelsall commented: "Our balance sheet continued to improve during the quarter.
Our working capital was $15,767,000 at March 31, 1998, with over $6,131,000 in
cash. We closed a $4,000,000 senior credit facility, which allowed us to repay
short-term debt. In addition, we received $3,592,000 from the exercise of
options and warrants, not including the full effect of the call of the
outstanding public warrants which was completed subsequent to quarter end.
Long-term debt now represents 15% of our total capitalization. Additionally,
refinancing of multiple short-term debt facilities will allow us to accelerate
our administrative organization, and consolidate financial and support functions
of our subsidiary operations. Previously, our efforts in this area had been
delayed, due to the requirements of our various credit facilities."
Doug Kelsall also announced that the company's Common Stock has been approved by
NASDAQ for trading on the National Market System under the symbol TAVA,
effective Thursday, May 14, 1998.
Jenkins provided the following update on the company's Y2k activity:
General awareness of Y2k issues in process control and automation systems,
while still lagging the traditional IT sector, is increasing rapidly. We
have seen a sharp acceleration in program commitment and roll-out in even
the past few weeks. Most new clients are moving directly to adopting
comprehensive programs and by-passing the pilot stage that had been a
typical program element to date. The costly "awareness building" element
of our sales and marketing program will be significantly reduced in this
and subsequent quarters with those resources re-directed to closing
additional specific programs and growing core business relationships with
our new clients.
The Company's Y2k client list has grown to exceed 100 with several new
additions expected in the next 30 days. These clients alone hold potential
for application of TAVA tools and services at more than 2300 sites that
vary greatly in size and scope of systems. While this is an indicator of
the strength of our program and its broad acceptance, management cautions
that all sites covered by these agreements cannot be projected to purchase
full complements of tools and services from TAVA.
The Company's TAVA/R.W. Beck joint venture, chartered to address the
electrical utility industry Y2k compliance market, is in final stage
negotiation on closure of several major contracts. The venture is also
developing partners to increase international coverage. We expect
contribution from TAVA/R.W. Beck in our first quarter of fiscal 1999.
Other recent specific developments include:
General Motors has expanded TAVA's role to include vendor management and
component testing for GM's North American Operations. TAVA will augment
GM's own efforts in this area.
4
<PAGE>
The Company's engagement with Kraft has moved to the remediation phase at
Kraft co-manufacturing sites. TAVA has also begun inventory and assessment
activity at the Kraft distribution centers.
To meet schedule demands on current engagements, forecast expansion of
those engagements and expected new business, the company is continuing to
recruit aggressively with plans to hire another 150 staff in the next
ninety days. To date, we have had little trouble recruiting staff and
have a good pipeline of applicants.
In addition to direct staff, our operating model includes use of our
Solution Provider Partners to provide TAVA trained staff in support of our
own program execution, particularly in off-shore engagements. We have more
than a dozen Solution Provider Partners signed on or in final stage. These
range from Korea to Europe and Africa and provide TAVA with an additional
resource pool of more than 1000 personnel.
In addition to providing staff augmentation for TAVA programs, the Solution
Provider Partners will market PlantY2k One tools and services in specific
markets.
Development of PlantY2k One Rev. 2.0 was completed in late April. With
Rev. 2.0 complete, no further major development effort will be directed to
anything other than continued expansion of the vendor management database.
The Company's product development resources have been re-directed to
programs put on hold during the Y2k ramp up and new programs that have
grown out of the Y2k engagement experience.
In conjunction with the release of PlantY2k One Rev 2.0, we are rolling out
price increases of approximately 10% on service rates to new clients.
As a result of the Y2K driven exposure at new clients, the company is being
directed to new core business opportunities.
Jenkins added that more than 40 of the company senior management had just
completed a five day meeting that concluded the Company's Fiscal 1999 planning
process and developed the specific tactics required to support the Company's
post year 2000 strategies.
As a major step in that direction the company announced that it has formed a
Consulting Division to be led by Tom Bruhn. Bruhn has joined TAVA from
Raytheon Automated Systems where he last served as Director of Business
Development and was heavily involved in the senior management of Raytheon's
Y2k activity.
This Consulting Division will work with clients at the executive level and
provide the strategic manufacturing information technology plans required to
integrate their ERP and supply chain management systems with process information
systems.
5
<PAGE>
Kevin Fallon, TAVA Chief Operating Officer noted: "TAVA views true enterprise
integration as the next wave in IT emphasis, and TAVA is uniquely positioned
with skills and process knowledge to play a lead role in that transformation."
He added: "The goal for our consulting practice is to be the acknowledged leader
in developing client understanding of the performance improvement to be gained
through full enterprise IT integration."
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, and failure to capitalize upon access to new
clientele. Additional risks and uncertainties which may affect forward-looking
statements about the Company's Y2K One 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 TAVA and its product
and service solutions. These factors and others are discussed in the
"Management's Discussion and Analysis" section of the Company's most recent
Annual Report and Quarterly Report filed with the Securities and Exchange
Commission, to which reference should be made.
EARNINGS RECAP:
(in 000's, except for per share data)
<TABLE>
<CAPTION>
3 MONTHS ENDING 9 MONTHS ENDING
--------------- ---------------
Mar 31 1998 Mar 31 1997 Mar 31 1998 Mar 31 1997
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Revenue $ 11,667 $ 11,183 $ 33,470 $ 27,287
Cost of Sales 6,497 7,049 21,092 17,730
----------- ---------- ----------- ----------
Gross Margin 5,170 4,134 12,378 9,557
Gross Margin % 44.3% 37.0% 37.0% 35.0%
SG&A 4,365 3,133 11,975 8,023
Amortization of Goodwill
& Capitalized Software 383 152 916 326
-------------------- ----------- ---------- ----------- ----------
4,748 3,285 12,891 8,349
Other Income (Expenses) (121) (356) (342) (719)
----------- ---------- ----------- ----------
Net Income (Loss) 301 493 (855) 489
Net Loss - Common Shares 301 493 (915) 489
Average shares outstanding 19,876,981 9,718,155 17,320,731 8,044,253
Per share - basic $0.02 $0.05 ($0.05) $0.06
Per share - diluted $0.01 $0.05 ($0.05) $0.05
</TABLE>
6
<PAGE>
Balance Sheet Info:
(in 000's except for per share data)
<TABLE>
<CAPTION>
ASSETS LIABILITIES
- ------ -----------
<S> <C> <C> <C>
Cash $ 6,131 Total Current Liabilities $ 9,624
Other Current Assets 19,260 Long Term Liabilities 5,948
Total Current Assets 25,391 Total Liabilities 15,572
Other Assets 14,382 Shareholders Equity 24,201
- ------------ ------ ------------------- ------
Total Liabilities and
Total Assets $39,773 Shareholders' Equity $39,773
Working Capital $15,767
</TABLE>
Contacts:
TAVA Technologies, Inc. Pacific Consulting Group, Inc.
John Jenkins Scott Liolios
(303) 771-9794 (714) 574- 3860
7
