SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarter ended September 30, 1996
Commission File Number 2-15966
TAYCO DEVELOPMENTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 16-0835557
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
100 TAYLOR DRIVE, NORTH TONAWANDA, NEW YORK 14120-0748
Address of principal executive offices Zip Code
Registrant's telephone number, including area code - 716-694-0877
Indicate by check mark whether the registrant (1) has filed all
annual, quarterly, and other reports required to be filed with all
the Commission and (2) has been subject to the filing requirements
for at least the past 90 days.
Yes X No
Indicate the number of shares outstanding, of each of the Issuer's
classes of common stock as of the close of the period covered by
this report.
CLASS Outstanding at September 30, 1996
Common Stock 990,213
($.05 par value)
FORM 10-QSB
TAYCO DEVELOPMENTS, INC. - INDEX
PART I - FINANCIAL INFORMATION
PAGE NO.
Item 1. Financial Statements
Balance Sheets 3
September 30, 1996, and June 30, 1996
Statement of Income for three months 4
ended September 30, 1996 and
September 30, 1995
Statement of Cash Flows for three months 5
ended September 30, 1996 and
September 30, 1995
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of 7
the Financial Condition and Results of
Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to Vote of Security 10
Holders
Item 5. Other Information 10
Item 6. Exhibits 10
SIGNATURES 11
FORM 10-QSB
TAYCO DEVELOPMENTS, INC. - BALANCE SHEET
ASSETS 9/30/96 6/30/96
Current
Cash $ 23,296 $ 23,473
Receivables - Affiliates, Current 57,049 83,606
Prepaid Other Expenses 13,310 3,231
Total Current Assets 93,655 110,310
Investments - Affiliate, at Equity 1,242,524 1,242,524
Furniture and Equipment - at Cost 71,770 61,821
Less: Accumulated Depreciation 54,450 54,150
1,259,844 1,250,195
Other Assets
Patents, Net 109,848 97,927
Receivables - Affiliates, Long-term - 0 - - 0 -
Cash Value - Life Insurance, Net 43,777 43,777
Total Other Assets 153,625 141,704
TOTAL ASSETS $ 1,507,124 $ 1,502,209
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Payables - Trade $ - 0 - $ - 0 -
Payables - Affiliate - 0 - - 0 -
Current Portion of Long Term Debt 27,803 27,803
Accrued Income Taxes 11,124 18,747
Accrued Expenses 15,531 25,116
Total Current Liabilities 54,458 71,666
Long-term Debt 75,120 82,314
Stockholders' Equity
Common Stock, par value $.05
per share, 1,000,000 shares
authorized, 990,213 issued 49,696 49,696
Paid - In Capital 670,605 670,605
Retained Earnings 662,874 633,557
1,383,175 1,353,858
Less: Cost of Treasury Stock
3,709 shares at Cost 5,629 5,629
Total Stockholders' Equity 1,377,546 1,348,229
$ 1,507,124 $ 1,502,209
FORM 10-QSB
TAYCO DEVELOPMENTS, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
THREE MONTHS ENDED SEPTEMBER 30
1996 1995
NET SALES
Royalties $ 45,521 $ 28,009
Research and Development 60,153 71,363
Total Revenues 105,674 99,372
EXPENSES
Research and Development 29,828 29,692
Selling, General Administrative 30,399 26,825
Amortization - Patents 2,250 2,250
Total Expenses 62,477 58,767
Operating Income 43,197 40,605
OTHER INCOME/(EXPENSE) 270 4,170
Income Before Provision for Income
Taxes and Equity in Net Income
of Affiliates 43,467 44,775
Provision for Income Taxes 14,150 12,500
Net Income before Equity in
Net Income of Affiliates 29,317 32,275
Equity in Net Income of Affiliates 19,067 41,452
Net Income $ 48,384 $ 73,727
Net Income per Share $ .05 $ .07
FORM 10-QSB
TAYCO DEVELOPMENTS, INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
THREE MONTHS ENDED SEPTEMBER 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 29,317 $ 73,727
Adjustments to Reconcile
Net Income/to Net
Net Cash Provided by Operating
Activities:
Amortization - Patents 2,250 2,250
Equity in Net Income of Affiliates - 0 - (41,452)
Changes in:
Receivables - Affiliates 26,557 (10,703)
Prepaid Expenses (10,079) (8,196)
Payables - Trade - 0 - 17,163
- Affiliates - 0 - - 0 -
Accrued Income Taxes (7,623) (6,783)
Accrued Expenses (9,585) (5,802)
Amounts due to Stockholder (7,194) (7,662)
Net Property, Plant & Equipment (9,649) (3,561)
Net Cash Provided by Operating
Activities 13,994 8,981
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Patents (14,171) (12,634)
Net Increase in Cash (177) (3,653)
Cash Balance, Beginning of Period 23,473 24,981
Cash Balance, End of Period $ 23,296 $ 21,328
FORM 10-QSB
TAYCO DEVELOPMENTS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENT
1. In opinion of the Company, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments necessary to present fairly the financial position
as of September 30, 1996 and the results of operations for the
three months ended.
2. There is no provision nor shall there be any provision for
profit sharing, dividends, or any other benefits of any nature
at any time for this fiscal year.
3. For the three month period ended September 30, 1996, the
profit was divided by 990,213 to calculate the earnings per
share.
4. The results of operations for the three month period ended
September 30, 1996, are not necessarily indicative of the
results to be expected for the full year.
FORM 10-QSB
TAYCO DEVELOPMENTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is Management's discussion and analysis of
certain significant factors which have affected the Company's
earnings during the periods included in the accompanying
consolidated condensed statements of income.
The Private Securities Litigation Reform Act of 1995 provides
a "safe harbor" for forward-looking statements. Certain matters
discussed in this section and elsewhere in this report are forward-looking
statements. These forward-looking statements involve risks
and uncertainties including, but not limited to, economic
conditions, product demand and industry capacity, competition, and
other risks.
A summary of the period to period changes in the principal
items included in the consolidated statements of income is shown
below:
Comparisons of three months ended
September 30, 1996 -vs- September 30, 1995
Increase (Decrease)
Royalties $ 17,512
Research and Development Revenue (11,210)
R&D Expense 136
SG&A 3,574
Amortization - 0 -
Operating Income 2,592
Other Income (Expense) (3,900)
Income Before Taxes and Equity in Affiliates 1,308
Provision for Taxes 1,650
Equity in Affiliates (22,385)
Net Income ($ 25,343)
FORM 10-QSB
TAYCO DEVELOPMENTS, INC.
MANAGEMENT'S DISCUSSION (CONT'D)
In the first quarter of fiscal year 1997 ("QI97"), results
from operations were similar to those of QI96. However, a decline
in the equity income from the Company's affiliate, Taylor Devices
caused a reduction in the Company's Net Income.
In QI97, Total Revenues increased by 6.3% to $105,674 as
Royalties increased by $17,512 to offset a decline of $11,210 in
Research and Development income. The improved Royalties figure is
attributable to the high level of defense sales in Devices' product
mix. Total expenses increased by $3,710 over QI96. This increase
is largely attributable to a revised method of distributing
internal royalty payments which should, in the long term, spread
this expense out more evenly. Operating Income increased from
QI96's figure of $40,605 to $43,197 in QI97.
As mentioned above, Equity in the Net Income of Affiliates
declined from $41,452 in QI96 to $19,067 in QI97. This was
addressed in the Company's 10-KSB for the fiscal year ending
6/30/96. Briefly put, the tax refund income and net operating loss
carryforward credits which benefitted Devices in Fiscal Years 1994,
1995 and 1996 have been used in their entirety. Devices' QI96
income, and the Company's share of that income, no longer benefit
from those items.
Net Income for QI97 was $48,384 and $.05 per share compared to
$73,727 and $.07 per share in QI96. The figure of $48,384 ranks in
the middle of Net Income figure for the past five first quarters,
with Equity Income from Devices generally being the fluctuating
factor.
The Company remains financially stable. It continues to make
payments against its obligations with respect to the loans of its
former affiliate, Tayco Technology - and only one loan remains to
be paid off. The Company's engineers are applying their efforts to
a number of defense related matters which are anticipated to
generate significant revenue for Devices (and Royalties to the
Company) in the near future. The Company's work on the Electro-Rheological
damper has resulted in an invitation to Devices to
submit a Phase II proposal to SBIR.
FORM 10-QSB
TAYCO DEVELOPMENTS, INC.
MANAGEMENT'S DISCUSSION (CONT'D)
For the upcoming quarter and the remainder of FY97, Management
anticipates that financial results will continue to be positive -both from
internal operations and equity income.
FORM 10-QSB
TAYCO DEVELOPMENTS, INC.
PART II - OTHER INFORMATION
ITEM 1 Legal Proceedings
The Company is not currently engaged in any litigation.
ITEM 2 Changes in Securities - None
ITEM 3 Defaults Upon Senior Securities - None
ITEM 4 Submission of Matters to Vote of Securities Holders -
None
ITEM 5 Other Information - None
ITEM 6 Exhibits - None
FORM 10-QSB
TAYCO DEVELOPMENTS, INC.
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.
TAYCO DEVELOPMENTS, INC.
(Registrant)
By /S/ Douglas P. Taylor Date 11/13/96
Douglas P. Taylor
Chairman of the Board of Directors
President
(Principal Executive Officer)
AND
By /S/ Kenneth G. Bernstein Date 11/13/96
Kenneth G. Bernstein
Chief Accounting Officer
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 23,296
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