<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 1995 Commission File Number 0-9669
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TECHNALYSIS CORPORATION
- - -------------------------------------------------------------------------------
(Exact Name of Registrant as specified in its charter)
Minnesota 41-0918564
- - ------------------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6700 France Avenue South
Minneapolis, Minnesota 55435
- - ------------------------------------- ----------------------------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code (612) 925-5900
----------------------------
Not Applicable
- - -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last year)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
2,197,303 Common Shares were outstanding as of March 31, 1995.
<PAGE>
TECHNALYSIS CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE
PART I. FINANCIAL INFORMATION NO.
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<C> <S> <C>
Item 1. Financial Statements
Condensed Balance Sheet 3
March 31, 1995 (Unaudited) and
December 31, 1994
Condensed Statement of Earnings 4
Three months ended March 31, 1995
and 1994 (Unaudited)
Condensed Statements of Cash Flows 5
Three months ended March 31, 1995
and 1994 (Unaudited)
Notes to Condensed Financial 6
Statements (Unaudited)
Item 2. Management's Discussion and Analysis of 7
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
</TABLE>
2
<PAGE>
TECHNALYSIS CORPORATION
CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 31, DEC. 31,
1995 1994
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(Unaudited) Note
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents $3,189,091 $4,156,239
Investment in Available-For-Sale Securities 1,079,089 1,057,255
Trade Accounts Receivable 3,973,836 2,254,825
Unbilled Work on Contracts in Process 112,636 1,056,513
Other Current Assets 190,242 237,146
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TOTAL CURRENT ASSETS $8,544,894 $8,761,978
EQUIPMENT AND OFFICE FURNITURE:
At cost less accumulated depreciation
of 675,795 & 658,955 respectively 170,454 157,789
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$8,715,348 $8,919,767
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LIABILITIES & STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Trade Accounts Payable $ 329,742 $ 210,757
Salaries, Wages and Commissions Payable 180,139 105,462
Accrued Vacation Payable 67,747 80,482
Income Taxes Payble 0 0
Dividends Payable 0 637,218
Advance Billings on Contracts 160,575 154,273
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TOTAL CURRENT LIABILITIES $ 738,203 $1,188,192
STOCKHOLDER'S EQUITY:
Common Stock, Par Value $.10 a Share;
Authorized 5,000,000 Shares
Issued and outstanding 2,197,303
& 2,197,303 shares, respectively $ 219,730 $ 219,730
Additional Paid-In Capital 973,446 973,446
Retained Earnings 6,823,842 6,591,746
Unrealized Loss on Available-For-Sale
Securities (39,873) (53,347)
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$7,977,145 $7,731,575
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$8,715,348 $8,919,767
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---------- ----------
</TABLE>
NOTE: The balance sheet at December 31, 1994 has been taken from the audited
financial statements at that date, and condensed.
3
<PAGE>
TECHNALYSIS CORPORATION
CONDENSED STATEMENT OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-----------------------
1995 1994
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<S> <C> <C>
REVENUES:
Sales and Reimbursed Expenses $4,938,351 $4,229,922
EXPENSES:
Salaries, Contracted Services
and Reimbursed Expenses $2,935,949 $2,485,044
Selling, Administrative and
Other Operating Costs 979,542 712,737
Employee Benefits 706,062 548,589
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TOTAL EXPENSES $4,621,550 $3,746,370
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OTHER INCOME:
Interest Income 73,295 54,668
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EARNINGS BEFORE INCOME TAXES $ 390,096 $ 538,220
INCOME TAXES 158,000 218,000
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NET EARNINGS $ 232,096 $ 320,220
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---------- ----------
PER COMMON SHARE
Net Earnings:
Primary $0.11 $0.15
Fully Diluted $0.11 $0.15
Cash Dividends:
(for previous year) $0.29 $0.28
</TABLE>
4
<PAGE>
TECHNALYSIS CORPORATION
STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
------------------------
1995 1994
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $4,169,519 $4,237,750
Cash paid for salaries, wages & benefits (3,584,761) (3,109,180)
Cash paid for selling, administrative &
other operating costs (858,928) (667,257)
Interest Received 71,872 45,757
Income Taxes Paid (89,767) (73,776)
---------- ----------
Net cash provided by operating activities (292,065) 433,294
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (29,505) (4,285)
Purchases of Available-For-Sale Securities (8,360) 0
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(37,865) (4,285)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (637,218) (614,965)
Proceeds from issuance of common stock 0 52,990
---------- ----------
Net cash used by financing activities (637,218) (561,975)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS: (967,148) (132,966)
CASH AND CASH EQUIVALENTS:
At beginning of period 4,156,239 6,371,620
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At end of period $3,189,091 $6,238,654
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---------- ----------
RECONCILIATION OF NET EARNINGS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net earnings $ 232,096 $ 320,220
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 16,840 6,020
(Increase) decrease in trade A/R (1,719,011) 347,251
(Increase) decrease in unbilled work
on contracts in process 943,877 (185,628)
(Increase) decrease in other assets 46,904 (48,124)
Increase (decrease) in accounts payable 118,985 75,963
Increase (decrease) in accrued expenses 61,942 (72,837)
Increase (decrease) in income taxes payable 0 144,224
Increase (decrease) in advance billings on
contracts in process 6,302 (153,795)
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Total adjustments (524,161) 113,074
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NET CASH PROVIDED BY OPERATING ACTIVITIES $ (292,065) $ 433,294
---------- ----------
---------- ----------
</TABLE>
5
<PAGE>
TECHNALYSIS CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED FINANCIAL STATEMENTS
The condensed balance sheets of March 31, 1995 and December 31,
1994, the statement of earnings for the three-month period ended
March 31, 1995 and 1994, and the condensed statements of cash flows
for the three-month periods then ended have been prepared by the
company, without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present
fairly the financial position, results of operations and cash flows at
March 31, 1995 and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the company's
December 31, 1994 annual report to shareholders. The results of
operations for the periods ended March 31, 1995 are not necessarily
indicative of the operating results for the full year.
2. STOCKHOLDERS' EQUITY
During the three months ended March 31, 1995, stockholder's
equity changed for the following items;
- Net Earnings of $232,096.
- $13,474 adjustment in unrealized loss on available-for-sale
securities.
6
<PAGE>
TECHNALYSIS CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
REVENUES
Revenue from sales and reimbursed expenses increased 17% for the first
quarter of 1995, ended March 31, compared to 1994 due to an increase in the
amount of business. Interest income increased 34% due to higher interest
rates.
OPERATING COSTS AND EXPENSES
Operating costs were 94% of revenues for the first quarter of 1995 compared
to 89% for the first quarter of 1994. The increase in operating costs as a
percent of revenues was due primarily to increased expansion costs and
higher costs than anticipated for a large fixed-price project.
NET EARNINGS
Net earnings and earnings per share decreased 28% and 27% respectively for
the first quarter of 1995 compared to the first quarter of 1994 due to the
increase in operating costs.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1995, Technalysis had working capital of $7,797,494 versus
$7,573,786 as of December 31, 1994 and $8,079,022 as of March 31, 1994.
Technalysis has neither short nor long term debt. The Company believes it
has adequate cash and cash flow to support its present operations.
7
<PAGE>
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibit No. 1: Computations of Net Income per
Common Share
8
<PAGE>
Exhibit No. 1
TECHNALYSIS CORPORATION
COMPUTATION OF NET EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
------------------------
1995 1994
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<S> <C> <C>
PRIMARY:
Net Earnings $ 232,096 $ 320,220
---------- ----------
---------- ----------
Weighted average number of
common shares outstanding 2,197,303 2,200,832
Dilutive effect of stock
options outstanding after
application of treasury
stock method 7,333 7,096
---------- ----------
2,204,636 2,207,928
Net earnings per common
equivalent share, based
upon weighted average
number of shares outstanding $0.11 $0.15
---------- ----------
---------- ----------
FULLY DILUTED:
Net Earnings $ 232,096 $ 320,220
---------- ----------
---------- ----------
Weighted average number of
common shares outstanding 2,197,303 2,200,832
Dilutive effect of stock
options outstanding after
application of treasury
stock method 7,333 7,559
---------- ----------
2,204,636 2,208,391
Net earnings per common
equivalent share, based
upon weighted average
number of shares outstanding $0.11 $0.15
---------- ----------
---------- ----------
</TABLE>
9
<PAGE>
TECHNALYSIS CORPORATION
SIGNATURES
Pursuant to the requirements of the Security Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Technalysis Corporation
----------------------------------------
Registrant
Date May 12, 1995 /S/ Victor A. Rocchio
------------------------------ ----------------------------------------
Victor A. Rocchio
Chairman & CEO
Date May 12, 1995 /S/ Milan L. Elton
------------------------------ ----------------------------------------
Milan L. Elton
Vice President, Administration
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 3189091
<SECURITIES> 1079089
<RECEIVABLES> 3973836
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8544894
<PP&E> 846249
<DEPRECIATION> 675795
<TOTAL-ASSETS> 8715348
<CURRENT-LIABILITIES> 738203
<BONDS> 0
<COMMON> 219730
0
0
<OTHER-SE> 7757415
<TOTAL-LIABILITY-AND-EQUITY> 8715348
<SALES> 0
<TOTAL-REVENUES> 4938351
<CGS> 0
<TOTAL-COSTS> 4621550
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 390096
<INCOME-TAX> 158000
<INCOME-CONTINUING> 232096
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 232096
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
