United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X]Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the quarter ended March 31, 1996
[ ]Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from to
Commission File Number: 0-11883
TELEBYTE TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Nevada 11-2510138
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
270 Pulaski Road, Greenlawn, New York 11740
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (516) 423-3232
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 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
As of May 15, 1996 there were outstanding 1,491,566 shares of Common Stock, $.01
par value.
Transactional Small Business Disclosure Format (check one);
Yes No X
TELEBYTE TECHNOLOGY, INC.
INDEX
Part I Financial Information
Item 1. Financial Statements
Balance Sheets
March 31, 1996 (Unaudited)
Statements of Operations
Three months ended
March 31, 1996 and 1995 (Unaudited)
Statements of Cash Flows
Three months ended
March 31, 1996 and 1995 (Unaudited)
Condensed Notes to Financial
Statements (Unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Part II
Other Information
Financial Information
Item 1. Financial Statements
TELEBYTE TECHNOLOGY, INC.
BALANCE SHEETS
ASSETS March 31, 1996
(unaudited)
CURRENT ASSETS
Cash & cash equivalents $ 431,854
Accounts receivable,
less allowances for doubtful accounts 559,997
Inventory 1,052,456
Prepaid expenses 132,040
Deferred income taxes 80,000
--------------------
TOTAL CURRENT ASSETS 2,256,347
PROPERTY, PLANT AND EQUIPMENT, less
accumulated depreciation and amortization 1,182,888
OTHER ASSETS 46,502
--------------------
$ 3,485,737
====================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 240,189
Accrued expenses 110,788
Current maturities of long-term debt 45,088
--------------------
TOTAL CURRENT LIABILITIES 396,065
LONG-TERM DEBT, less current maturities 1,032,334
SHAREHOLDERS' EQUITY
Common stock, par value $.01 per share
1,636,566 issued and 1,491,566 outstanding 16,366
Capital in excess of par value 2,751,988
Accumulated deficit (616,783)
Less treasury stock, at cost,
(145,000 shares) (94,233)
--------------------
2,057,338
--------------------
TOTAL LIABILITIES AND SHAREHOLDER'S' EQUITY $ 3,485,737
====================
The accompanying notes are an integral part of these financial statements.
TELEBYTE TECHNOLOGY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Ended March 31,
1996 1995
---------------- --------------------
NET SALES $ 939,401 $ 884,932
COST OF SALES 436,686 381,663
--------------- --------------------
GROSS PROFIT 502,715 503,269
---------------- --------------------
OPERATING EXPENSES
Research and development 59,403 68,038
Selling, general and 455,088 398,245
administrative
---------------- --------------------
514,491 466,283
---------------- --------------------
Operating Income (Loss) (11,776) 36,986
---------------- --------------------
OTHER INCOME (EXPENSE)
Rental Income 12,049 12,049
Interest Income 3,229 5,000
Interest Expense (29,399) (27,921)
---------------- --------------------
Income (Loss) before income (25,897) 26,114
taxes
Provision for income 0 1,000
taxes
---------------- --------------------
NET INCOME (LOSS) $ (25,897) $ 25,114
================ ====================
NET INCOME (LOSS) PER SHARE $ (0.02) $ 0.02
================ ====================
Average number of shares 1,491,566 1,511,566
================ ====================
The accompanying notes are an integral part of these financial statements.
TELEBYTE TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months
Ended March 31,
----------------------------------------
1996 1995
---------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ (25,897) $ 25,114
Adjustments to reconcile net income
to net cash used in operating
activities:
Depreciation and amortization 21,825 12,826
Decrease (increase) in assets:
Accounts receivable (95,009) (73,161)
(88,552) 5,153
Inventories
Prepaid expenses and other (43,936) 51,957
Increase in
liabilities:
Accounts payable 119,905 (25,596)
Accrued expenses (37,418) 44,855
--------------- --------------------
Net cash (used in) provided in
operating activities (149,082) 41,148
---------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was paid for:
Property and equipment 6,251 47,259
---------------- --------------------
Net cash used in investing activities (6,251) (47,259)
---------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from:
Financing capital assets 0 26,257
Cash was used for:
Puchase of treasury stock 8,288
Principal payments of L/T debt 13,991 12,570
---------------- --------------------
Net cash provided by financing activities (22,279) 13,687
---------------- --------------------
Net increase (decrease) in cash and
cash equivalents (177,612) 7,576
Cash and cash equivalents at
beginning of period 609,466 439,377
---------------- --------------------
Cash and cash equivalents at
end of period $ 431,854 $ 446,953
================ ====================
The accompanying notes are an integral part of these financialstatements.
TELEBYTE TECHNOLOGY, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED FINANCIAL STATEMENTS
The balance sheet as of March 31, 1996, the statement of earnings for the three
months then ended and the statements of cash flows for the three month period
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, 1996 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 financial statements
be read in conjunction with the financial statements and notes thereto included
in the Company's annual report to shareholders for the fiscal year ended
December 31, 1995. The results of operations for the period ended March 31, 1996
are not necessarily indicative of the operating results for the full year.
Item 2. Management's Discussion and Analysis of Financial Condition or Plan of
Operation.
RESULTS OF OPERATIONS
Sales during the first quarter ended March 31, 1996 increased 6.1% to $939,401
compared to sales of $884,932 for the same period in 1995. The increased sales
can be attributed to higher than normal promotional activities during the
quarter and the distribution of the Company's catalog. Specifically, the Company
increased it's direct marketing, space advertising, catalog mailing, and show
expenditures by 257% during the first quarter of 1996 compared to 1995. The
Company expects these additional marketing efforts to also stimulate sales
during the second half of 1996, although, the Company plans to continue its
expanded promotional activities well into the second quarter.
Cost of sales for the first quarter of $436,686 or 46.4% of sales increased
compared to the $381,663 or 43.1% of sales during the same period in 1995. The
decreased profit margin during the first quarter of 1996 is due primarily to
product mix.
Selling, general and administrative costs of $455,088 increased as compared to
$398,245 during the first quarter of 1995. The increase of $56,843 during the
first quarter reflects the Company's decision to expand marketing efforts as
stated above. Research and development expenses of $59,403 decreased compared to
$68,038 during the same quarter in 1995. Engineering efforts during the quarter
included the continuing development of a HDSL product line which the Company
expects to introduce its first product during the second half of 1996.
Interest income decreased to $3,229 during the first quarter of 1996 compared to
$5,000 for the same period in 1995. The decrease is due primarily to the lower
cash on deposit and lower yields at Merrill Lynch. During the first quarter of
1995 the Company had rental income of $12,049 which was in line with the
comparable quarter of 1995.
The net loss of $25,987 or $.02 per share for the first quarter of 1996 is
compared to the net income of $25,114 or $.02 per share in the same quarter in
1995. The net loss is due primarily to the higher selling expenditures, and the
lower profit margin as discussed above.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $149,082 compared to cash used in
operating activities of $92,999 for the same period of 1995. The increase is due
primarily to higher levels of inventory and the increase in accounts receivable.
Working capital decreased to $1,860,282 at March 31, 1996, a decrease of $31,552
from December 31, 1995. The current ratio at March 31, 1996 decreased to 5.7:1
compared to 7.0:1 at December 31, 1995. The Company has a revolving line of
credit of $1,000,000 with Merrill Lynch that expires June 30, 1996. The Company
expects to renew the credit facility in July of 1996. The Company considers it's
working capital to be adequate to fund presently foreseeable working capital
requirements.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - None
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TELEBYTE TECHNOLOGY, INC.
(Registrant)
Dated: May 15, 1996 By:
Joel A. Kramer
President, Chief Executive Officer
and Chief Financial Officer