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Previous: INTERNET COMMERCE CORP, S-8, EX-23.(II)2, 2000-11-06 |
Next: TAYCO DEVELOPMENTS INC, 10QSB, EX-27, 2000-11-06 |
For quarter ended September 30, 2000
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 incorporation or organization) | (I.R.S. Employer Identification Number) |
| 100 TAYLOR DRIVE, NORTH TONAWANDA, NEW YORK | 14120-0748 | |
| Address of Principal Executive Offices | Zip Code |
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, 2000 | |
| Common Stock (5 cents par value) |
990,213 |
| PART I - | FINANCIAL INFORMATION | PAGE | ||
| Item 1. | Financial Statements | |||
| Balance Sheets, September 30, 2000 and June 30, 2000 |
3 | |||
| Statements of Income for three months ended September 30, 200 0 and September 30, 1999 | 4 | |||
| Statement of Cash Flows for three months ended September 30, 2000 and September 30, 1999 | 5 | |||
| Notes to Condensed Financial Statements |
6 | |||
| Item 2. | Management's Discussion and Analysis of the Financial Condition and Results of Operations | 7 | ||
| PART II - | OTHER INFORMATION | |||
| Item 1. | Legal Proceedings |
9 | ||
| Item 2. | Changes in Securities | 9 | ||
| Item 3. | Defaults Upon Senior Securities | 9 | ||
| Item 4. | Submission of Matters to Vote of Security Holders | 9 | ||
| Item 5. | Other Information | 9 | ||
| Item 6. | Exhibits | 9 | ||
| ACCOUNTANTS' REVIEW REPORT | 10 | |||
| SIGNATURES | 11 | |||
| ASSETS |
09/30/00 |
6/30/00 | ||
| Current | ||||
| Cash | $ 42,484 | $ 31,381 | ||
| Receivables - Affiliates, Current | 307,162 | 329,040 | ||
| Prepaid Other Expenses | 11,077 | 7,981 | ||
| Total Current Assets | 360,723 | 368,402 | ||
| Investments - Affiliate, at Equity | 1,992,027 | 1,947,885 | ||
| Furniture and Equipment - At Cost | 73,389 | 73,389 | ||
| Less: Accumulated Depreciation | 68,942 | 68,342 | ||
| 1,996,474 | 1,952,932 | |||
| Other Assets | ||||
| Patent, Net | 130,500 | 129,367 | ||
| Receivables - Affiliates, Long-term | - 0 - | - 0 - | ||
| Cash Value - Life Insurance, Net | 75,408 | 75,408 | ||
| Total Other Assets | 205,908 | 204,775 | ||
| TOTAL ASSETS | $2,563,105 | $2,526,109 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| Current | ||||
| Payables - Trade | $ - 0 - | $ - 0 - | ||
| Payables - Affiliate | - 0 - | - 0 - | ||
| Current Portion of Long Term Debt | - 0 - | - 0 - | ||
| Accrued Income Tax | 6,766 | 38,641 | ||
| Accrued Expenses | 14,540 | 14,076 | ||
| Total Current Liabilities | 21,306 | 52,717 | ||
| Non Current | ||||
| Long Term Debt | - 0 - | |||
| Deferred Income Tax | 1,800 | 1,800 | ||
| Total Non Current Liabilities | ||||
| 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 | 1,825,327 | 1,756,920 | ||
| 2,545,628 | 2,477,221 | |||
| Less: Cost of Treasury Stock 3,709 Shares at Cost | 5,629 | 5,629 | ||
| Total Stockholders' Equity | 2,539,999 | 2,471,592 | ||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $2,563,105 | $2,526,109 | ||
| THREE MONTHS ENDED SEPTEMBER 30 | |||
|
2000 |
1999 | ||
| NET SALES | |||
| Royalties | $ 33,863 | $ 52,893 | |
| Research & Development | 83,779 | 67,340 | |
| Total Revenues | 117,642 | 120,233 | |
| EXPENSES | |||
| Research & Development | 39,467 | 41,975 | |
| Selling, General Administrative | 38,878 | 36,898 | |
| Amortization & Depreciation | 4,200 | 4,200 | |
| Total Expenses | 82,545 | 83,073 | |
| Operating Income | 35,097 | 37,160 | |
| OTHER INCOME/(EXPENSE) | 368 | (1,316) | |
| Income Before Provision for Income Taxes and Equity in Net Income of Affiliates | 35,465 | 35,844 | |
| Provisions for Income Taxes | 11,200 | 12,600 | |
| Net Income before Equity in Net Income of Affiliates | 24,265 | 23,244 | |
| Equity in Net Income of Affiliates | 44,142 | 31,050 | |
| NET INCOME | $ 68,407 | $ 54,294 | |
| NET INCOME PER SHARE | $ .069 | $ .055 | |
See notes to condensed financial statements.
|
THREE MONTHS ENDED SEPTEMBER 30 | ||||
|
2000 |
1999 | |||
| Cash Flows From Operating Activities | ||||
| Net Income | $ 68,407 | $ 54,294 | ||
| Adjustments to reconcile Net Income to Net Cash Flows from Operating Activities: | ||||
| Amortization - Patents | 3,600 | 3,300 | ||
| Depreciation | 600 | 900 | ||
| Equity in Net Income of Affiliates | (44,142) | (31,050) | ||
| Changes in: | ||||
| Receivables - Affiliates | 21,878 | (21,232) | ||
| Prepaid Expenses | (3,096) | (4,588) | ||
| Payables - Trade | - 0 - | - 0 - | ||
| Payables - Affiliates | - 0 - | - 0 - | ||
| Accrued Income Taxes | (31,875) | (14,849) | ||
| Accrued Expenses | 464 | 18,973 | ||
| Amounts due to Stockholders | - 0 - | (8,514) | ||
| Net cash from (for) operating activities | 15,836 | (2,766) | ||
| Cash Flows for Investing Activities | ||||
| Acquisition of Patents | (4,733) | (8,888) | ||
| Net Increase in Cash | 11,103 | (11,654) | ||
| Cash Balance, Beginning of Period | 31,381 | 40,884 | ||
| Cash Balance, End of Period | $ 42,484 | $ 29,230 | ||
See notes to condensed financial statements.
| 1. | The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In opinion of the Company, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position, results of operations, and cash flows as of September 30, 2000 and September 30, 1999 and the results of operations for the three months then ended. These financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Annual Report to Shareholders for the year ended June 30, 2000. |
| 2. | There is no provision nor shall there be any provisions for profit sharing, dividends, or any other benefits of any nature at any time for this fiscal year. |
| 3. | To calculate the earnings per share for the three month periods ended September 30, 2000 and 1999, the profit was divided by the outstanding shares of 990,213. |
| 4. | The results of operations for the three month period ended September 30, 2000, are not necessarily indicative of the results to be expected for the full year. |
| 5. | Significant Equity Investee: The Company owns a 25% equity investment in Taylor Devices, Inc. For the 4 months ended 9/30/00, Taylor Devices, Inc. had sales of $3,573,353 gross profit of $1,525,216 and net income of $201,977. |
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, which are not historical facts, are forward-looking statements. Words such as "expects," "intends," "believes," "anticipates," "estimates," "assumes," and analogous expressions are intended to identify forward-looking statements. As such, these statements involve risks and uncertainties including, but not limited to, economic conditions, product demand and industry capacity, competition, pricing pressures, the need for the Company to keep pace with customer needs and technological developments, and other factors, many or all of which may be beyond the control of the Company. 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.
A summary of the period to period changes in the principal items included in the condensed statements of income is shown below:
| Increase | (Decrease) | ||
| Royalties | $ (19,030) | ||
| Research & Development | 16,439 | ||
| R&D Expense | (2,508) | ||
| SG&A | 1,980 | ||
| Amortization / Depreciation | - 0 - | ||
| Operating Income | (2,063) | ||
| Other Income (Expense) | 1,684 | ||
| Income Before Taxes & Equity in Affiliates | (379) | ||
| Provision for Taxes | (1,400) | ||
| Equity in Affiliates | 13,092 | ||
| Net Income | 14,113 | ||
(All figures being compared are for the first quarters of Fiscal Year ending 2001 and Fiscal Year ended 2000).
Financial results for the Company's first quarter of Fiscal Year 2001 were marked by record first quarter Research & Development revenue, stable expenses and a strong equity income contribution from its affiliates. For the period ending September 30, 2000, Net Income showed an increase of 26%.
Total Revenues decreased slightly, from $120,233 in FY00 to $117, 642 in FY01, the net result of record first quarter R & D revenues and a reduced Royalty Income amount. Royalty Income was impacted by adjustments made to the estimated progress billing revenues and expenses reported by one of the Company's affiliates at the close of the prior year. Total expenses decreased slightly as reduced insurance and administrative expenses offset a moderate increase in rent.
Other Income improved in FY01 by $1,684 as the Company retired its only debt obligation in FY00 and is no longer paying interest expense. After the provision for taxes, Net Income before Equity in Affiliates was $24,265 in FY01, approximately 4.4% better than FY00's figure of $23, 244.
Equity in Net Income of Affiliates improved to $44,142 in FY01 from $31,050 in FY00 as both of the Company's affiliates, Taylor Devices, Inc. and Tayco Realty made positive contributions to the figure. Net Income for the first quarter of FY01 was $68,407 and $.069 per share compared to $54,294 and $.055 per share in the prior year.
In the first quarter of FY01, the Company's results were favorably impacted by the high utilization rate of its technical staff on two aerospace/defense projects previously awarded to its affiliate, Devices. At this time, the projects are still active and will continue to produce additional R & D revenues for the Company in FY01. Currently, most of the developmental projects are also related to the aerospace/defense sector. Among those efforts closest to becoming revenue producing projects are a new, miniaturized version of the navigator struts that Taylor Devices may manufacture shortly and a sophisticated panel display damping system for an extremely sensitive radar device.
Based on market demands - both commercial and defense - for the services of the Company's staff and the continuing expectations of good performance from the Company's affiliates, Management believes FY01 will show good financial results, consistent with the performance shown over the past few fiscal years. At this time, Management does not believe that it will be necessary to seek funding from external sources.
| 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 | ||
| ITEM 5 | Other Information - None | |
| ITEM 6 | Exhibits - Documents filed as part of this report:
Lease Agreement, dated July 1, 2000, between the registrant and Taylor Devices, Inc. |
We have reviewed the condensed balance sheet of Tayco Developments, Inc. as of September 30, 2000, and the related condensed statements of income and cash flows for the three months ended September 30, 2000. These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the condensed financial statements referred to above for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing standards, the balance sheet as of June 30, 2000, and the related statements of income, retained earnings, and cash flows for the year then ended (not presented herein); and in our report dated August 4, 2000, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed balance sheet as of June 30, 2000 is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived. We have not reviewed or compiled the related condensed statements of income and cash flows for the three months ended September 30, 1999 and, accordingly, do not express an opinion or any other form of assurance on them.
Lumsden & McCormick, LLP Buffalo, New YorkPursuant 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 | November 6, 2000 | |
| Douglas P. Taylor
Chairman of the Board of Directors President (Principal Executive Officer) |
| By | /s/Kenneth G. Bernstein | Date | November 6, 2000 | |
| Kenneth G. Bernstein
Chief Accounting Officer |
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