<PAGE>
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File No. 1-11642
LASER TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
IDAHO 84-0970494
------------------------- ----------------------
(State or other jurisdiction of (I.R.S. employer
identification number) incorporation or organization)
7070 SOUTH TUCSON WAY, ENGLEWOOD, COLORADO 80112
-------------------------------------------------
(Address of principal executive offices)
(303) 649-1000
--------------
(Registrant's telephone number including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 of 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 No .
----- -----
At February 13, 1997, 4,999,433 shares of common stock of the Registrant were
issued and outstanding.
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<PAGE>
INDEX
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PART I: FINANCIAL INFORMATION
PAGE
----
Item 1. FINANCIAL STATEMENTS................................ 1
Consolidated Balance Sheets....................... 1
Consolidated Statements of Operations............. 3
Consolidated Statements of Cash Flows............. 4
Notes to Consolidated Financial Statements........ 5
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................. 6
Results of Operations............................. 6
Liquidity and Capital Resources................... 7
PART II: OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS................................... 8
Item 2. CHANGES IN SECURITIES............................... 8
Item 3. DEFAULTS UPON SENIOR SECURITIES..................... 8
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 8
Item 5. OTHER INFORMATION................................... 8
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LASER TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1996
------------- -------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,940,996 $ 2,247,239
Investments 1,709,000 600,000
Trade accounts receivable, less allowance
of $10,000 for doubtful accounts 1,829,431 2,764,325
Inventories 2,579,208 2,577,635
Deferred income tax benefit 52,000 52,000
Prepaids and other current assets 528,527 428,079
---------- ----------
Total Current Assets 8,639,162 8,669,278
---------- ----------
PROPERTY AND EQUIPMENT, net of accumulated
depreciation and amortization 1,145,329 1,113,274
---------- ----------
LONG-TERM INVESTMENTS 614,192 611,273
---------- ---------
OTHER ASSETS 283,523 269,634
---------- ---------
TOTAL ASSETS $10,682,206 $10,663,459
=========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements
1
<PAGE>
LASER TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1996
------------- --------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 703,569 $ 723,178
Accrued expenses 176,158 247,426
----------- -----------
Total Current Liabilities 879,727 970,604
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value-shares
authorized 25,000,000; shares issued 5,088,201 50,882 50,882
Additional paid-in capital 9,623,980 9,623,980
Treasury stock at cost, 88,768 shares (17,535) (17,535)
Retained earnings 145,152 35,528
----------- ----------
Total Stockholders' Equity 9,802,479 9,692,855
----------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $10,682,206 $10,663,459
=========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements
2
<PAGE>
LASER TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 1996 AND 1995
(Unaudited)
DECEMBER 31, DECEMBER 31,
1996 1995
------------ ------------
<TABLE>
<CAPTION>
<S> <C> <C>
NET SALES $2,003,356 $2,238,373
LESS COST OF GOODS SOLD 873,413 1,034,233
---------- ----------
Gross Profit 1,129,943 1,204,140
ROYALTY AND LICENSING INCOME 180,660 27,904
---------- ----------
TOTAL OPERATING INCOME 1,310,603 1,232,044
OPERATING EXPENSES 1,180,525 891,905
---------- ----------
INCOME FROM OPERATIONS 130,078 340,139
INTEREST INCOME (NET) 38,546 51,858
---------- ----------
INCOME BEFORE TAXES ON INCOME 168,624 391,997
TAXES ON INCOME 59,000 149,000
---------- ----------
NET INCOME $ 109,624 $ 242,997
========== ==========
INCOME PER COMMON SHARE $.02 $.05
========== ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING 4,999,433 4,989,600
========== ==========
</TABLE>
See accompanying notes to the consolidated financial statements
3
<PAGE>
LASER TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996
AND DECEMBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1996 1995
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 109,624 $ 242,997
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 42,900 45,076
Deferred income taxes - (7,000)
Changes in operating assets and liabilities:
Trade accounts receivable 934,894 (260,493)
Inventories (1,573) 30,275
Other assets (100,448) (198,016)
Accounts payable and accrued expenses (90,877) 495,481
----------- ----------
Net cash provided by operating activities 894,520 348,320
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in investments (1,111,919) (28,611)
Patent costs paid (16,289) (13,320)
Purchases of property and equipment (72,555) (62,720)
----------- ----------
Net cash used in investing activities (1,200,763) (104,651)
----------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (306,243) 243,669
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 2,247,239 1,593,521
----------- ----------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 1,940,996 $1,837,190
=========== ==========
</TABLE>
See accompanying notes to the consolidated financial statements
4
<PAGE>
LASER TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information for the three months ended December 31, 1996 is unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF PRESENTATION
The consolidated financial statements presented are those of Laser
Technology, Inc. and its wholly-owned subsidiaries, Laser Communications, Inc.,
Laser Technology, U.S.V.I., and International Measurement and Control Company.
Laser Technology, Inc. is presently engaged in the business of developing,
manufacturing and marketing laser based measurement instruments.
In the opinion of Management, the unaudited financial statements reflect
all adjustments, consisting only of normal recurring accruals necessary for a
fair presentation of (a) the consolidated results of operations for the three
month periods ended December 31, 1996 and 1995, (b) the consolidated financial
position at December 31, 1996 and September 30, 1996, and (c) the consolidated
statement of cash flows for the three month periods ended December 31, 1996 and
1995. The accounting policies followed by the Company are set forth in the
Notes to the Consolidated Financial Statements of the Company for the fiscal
year ended September 30, 1996. The results of operations for interim periods
are not necessarily indicative of the results to be expected for the full year.
5
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND THREE
MONTHS ENDED DECEMBER 31, 1995
The following table sets forth, for the three month fiscal periods ended
December 31, 1996 and 1995, the percentage relationship to net sales of
principal items in the Company's Statement of Operations. It should be noted
that percentages discussed throughout this analysis are stated on an approximate
basis.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
Net sales...................................... 100% 100%
Cost of goods sold............................. 44 46
---------- ----------
Gross profit................................... 56 54
Royalty and licensing income................... 9 1
---------- ----------
Total operating income......................... 65 55
Operating expenses............................. 59 40
---------- ----------
Income from operations......................... 6 15
Interest income, net........................... 2 2
---------- ----------
Income before taxes on income.................. 8 17
Taxes on income................................ 3 6
---------- ----------
Net income..................................... 5% 11%
========== ==========
</TABLE>
REVENUES
The following table provides a breakdown of the percentage of net sales of the
Company's primary product lines.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
TRAFFIC SAFETY SYSTEMS........................ $ 965,058 $1,455,620
Percentage of revenues........................ 48% 65%
SURVEY AND MAPPING SYSTEMS.................... 940,831 729,258
Percentage of revenues........................ 47% 33%
OTHER......................................... 97,467 53,495
Percentage of revenues........................ 5% 2%
--------- ---------
Total Revenues.............................. $2,003,356 $2,238,373
========== ==========
</TABLE>
Net sales for the first quarter ended December 31, 1996 ("1996") fell 11%
to $2,003,356 from $2,238,373 for the first quarter ended December 31, 1995
("1995"), the result of slower international sales of the Company's Marksman
hand-held laser speed detection system, part of the Company's Traffic Safety
product line. As a percentage of net sales, Traffic Safety sales accounted for
48% in 1996 compared to 65% in 1995. The decrease in sales of the Company's
Traffic Safety products was partially offset by increased sales of the Company's
Survey and Mapping products. Sales of the Company's Survey and Mapping products
rose 29% to $940,831 in 1996 from $729,258 in 1995 due to sales of the Impulse,
newly introduced late in fiscal 1996, and increased sales volumes of the
Company's Criterion hand-held survey lasers. During the period ended December
31, 1996, the Company also delivered its first order for industrial laser
sensors pursuant to its contract with Telemotive Industrial Controls.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
The Company experiences quarterly fluctuations in international revenues
due to the placement of typically large orders for the Company's Traffic Safety
products. Despite a slowing of international Traffic Safety sales in the 1996
period, international sales equalled 46% of total sales for both years due to
increased foreign sales of the Company's Survey and Mapping products in 1996.
Management anticipates that foreign sales of the Company's products will
continue to comprise a significant portion of its revenues.
Cost of goods sold decreased 15% to $873,413 in 1996 from $1,034,233 in
1995, the result of lower sales and reduced manufacturing costs related to the
re-engineering and introduction of second generation products. Because of
reduced manufacturing costs, gross profit as a percentage of net sales improved
to 56% for the 1996 period, compared to 54% for the same period a year ago. The
Company anticipates that gross profit margins in most international markets will
continue to remain consistent with those realized domestically for the Company's
current product lines. However, the Company believes that gross profit margins
on high volume international sales of its hand-held Marksman laser speed
detection systems may be less than those realized domestically due to certain
pricing structures on large volume orders. The Company continues to minimize
the effect of currency fluctuations by requiring payment in U.S. funds.
Royalties from sales of the Yardage Pro (formerly the Lytespeed) laser
range finder, related to the Company's royalty and licensing Agreement with
Bushnell, were $180,660 in 1996 compared to $27,904 earned in the comparable
1995 period when initial production of the Yardage Pro began. Management
believes that Royalties received from Bushnell will continue to have a positive
impact on the Company's results of operations, although there is no assurance of
this.
Total operating expenses rose approximately 30% to $1,180,525 in 1996 from
$891,905 in 1995. As a percentage of net sales, the Company's total operating
expenses were 59% in 1996 compared to 40% in 1995. The costs associated with
building a direct sales force centered around the Company's domestic Traffic
Safety market, including increased compensation expense, and higher advertising
and travel expenses related to accelerated marketing efforts over the previous
year, comprised the majority of the increase in total operating expenses in 1996
as compared to the 1995 period. The Company anticipates that operating expenses
will continue to increase to support the Company's continued growth.
Income from operations was $130,078 in 1996 as compared to $340,139 in
1995. Increased royalty and licensing income partially offset the decrease in
sales and increased operating expenses in 1996. Combined with interest income
earned on investments, the Company had pretax income of $168,624 in 1996
compared to pretax income of $391,997 in 1995. After taxes on income, the
Company realized a decrease in net income to $109,624, or $.02 per share,
compared to net income of $242,997, or $.05 per share, for the 1995 period.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Company had working capital of $7,759,435. The
Company's present working capital is expected to adequately meet the Company's
needs for at least the next twelve months.
Cash provided by operating activities of $894,520 for the three month
period ended December 31, 1996 resulted from a decrease of $934,894 in trade
accounts receivable and net income of $109,624 for the period less $100,448
expended to increase other assets. Cash used in investing activities of
$1,200,763 related primarily to the purchase of investments and property and
equipment. Cash and cash equivalents decreased $306,243 for the 1996 period.
For the three month period ended December 31, 1995, cash provided by
operating activities was $348,320. Net income of $242,997 combined with an
increase of $495,481 in accounts payable and accrued expenses was used to
finance an increase in accounts receivable and other assets of $458,509. Cash
used in investing activities of $104,651 was used
primarily for the purchases of property and equipment and patent costs. Cash
and cash equivalents increased $243,669 for the 1995 period.
Pursuant to the Company's rights for additional expansion space under its
current lease agreement, the Company elected to further expand its facilities to
provide additional office and production space. In December 1996, the Company
added office space to house its wholly-owned subsidiary, Laser Communications,
Inc., adjacent to the Company's current
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONCLUDED)
machine shop facility. In February 1997, the Company intends to further expand
its current office and production facilities. Management believes that the
capital invested as a result of the expansion of its facilities will not have a
material impact on the Company's current working capital or results of
operations. Additionally, the Company believes that its current and planned
facilities are adequate to meet the Company's needs throughout the foreseeable
future.
OTHER
Management believes that the Company's business centered around its Traffic
Safety product line is not seasonal in nature. However, due to fiscal budgeting
practices of foreign and domestic law enforcement agencies, sales of the
Company's Traffic Safety products may vary between financial periods.
Historically, the Company has realized a small decline in sales of its Survey
and Mapping products in areas affected by colder weather in the winter months.
Management believes that the expansion of the Company's Survey and Mapping
product line and penetration into new markets has mitigated seasonal effects on
sales of this business segment.
The Company believes that it will experience increased costs due to the
effect of inflation on the cost of labor, material and supplies, and equipment
acquisitions. However, such inflationary effects are not expected to have a
material impact on the Company's operations or financial condition throughout
the predictable future.
RISK FACTORS AND CAUTIONARY STATEMENTS
This report contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, such as the words or phrases
"believes", "to be", "will depend", "will become" and "plans to" or similar
expressions. The Company wishes to advise readers that the forward-looking
statements in this report are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed in or implied by
the statements, including, but not limited to, the following: the Company's
ability to gain market acceptance of its new products; competitive pressures;
potential changes in the budgets of federal and state agencies; and compliance
with current and possible future FDA or environmental regulations.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
This Item is not applicable to the Company.
ITEM 2. CHANGES IN SECURITIES
This Item is not applicable to the Company.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
This Item is not applicable to the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's security holders
during the three months ended December 31, 1996.
ITEM 5. OTHER INFORMATION
This Item is not applicable to the Company.
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.
LASER TECHNOLOGY, INC.
----------------------
7070 SOUTH TUCSON WAY
ENGLEWOOD, COLORADO 80112
Date:February 13, 1997 By /s/ Pamela Sevy
----------------- ----------------------
Pamela Sevy
Chief Financial Officer
Date:February 13, 1997 By /s/ David Williams
----------------- -----------------------
David Williams
President and Chief Executive Officer
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,940,996
<SECURITIES> 1,709,000
<RECEIVABLES> 1,839,431
<ALLOWANCES> 10,000
<INVENTORY> 2,579,208
<CURRENT-ASSETS> 8,639,162
<PP&E> 1,921,697
<DEPRECIATION> 776,368
<TOTAL-ASSETS> 10,682,206
<CURRENT-LIABILITIES> 879,727
<BONDS> 0
0
0
<COMMON> 5,088,201
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,682,206
<SALES> 2,003,356
<TOTAL-REVENUES> 2,003,356
<CGS> 873,413
<TOTAL-COSTS> 1,511,824
<OTHER-EXPENSES> 542,114
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 168,624
<INCOME-TAX> 59,000
<INCOME-CONTINUING> 109,624
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 109,624
<EPS-PRIMARY> .02
<EPS-DILUTED> 0
</TABLE>
