-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J3g4KKzkyJcCC4SM3bm/xzWveZQgGs/7I3BES8GY8shYTSv11ySv0EGDWzIS0KPA 3DuKqyAqBI/CKVmeKEGOXA== 0000928816-96-000166.txt : 19960613 0000928816-96-000166.hdr.sgml : 19960613 ACCESSION NUMBER: 0000928816-96-000166 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960612 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOTAL TEL USA COMMUNICATIONS INC CENTRAL INDEX KEY: 0000034497 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 221656895 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-02180 FILM NUMBER: 96579987 BUSINESS ADDRESS: STREET 1: 150 CLOVE RD CITY: LITTLE FALLS STATE: NJ ZIP: 07424-049 BUSINESS PHONE: 2018121100 MAIL ADDRESS: STREET 1: 150 CLOVE ROAD CITY: LITTLE FALLS STATE: NJ ZIP: 07424-0449 FORMER COMPANY: FORMER CONFORMED NAME: FARADYNE ELECTRONICS CORP DATE OF NAME CHANGE: 19920223 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 10-Q (Mark one) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE - ----- SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, l996 ---------------- 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 Number 0-2180 TOTAL-TEL USA COMMUNICATIONS, INC. (Exact name of registrant as specified in its charter) New Jersey 22-1656895 ---------- ------------ (State or other Jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 150 Clove Road, 8th Floor, Little Falls, NJ 07424 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (201) 812-1100 Not applicable -------------- (Former address of principal executive offices) (Zip Code) 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 (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 ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at June. 10, 1996 - ---------------------------- ----------------------------- Common Share, $.05 par value 2,936,330 shares (post split) TOTAL-TEL USA COMMUNICATIONS, INC. ---------------------------------- AND SUBSIDIARIES ---------------- FIRST QUARTER REPORT ON FORM 10-Q --------------------------------- INDEX ----- Page No. PART I. FINANCIAL INFORMATION Condensed Consolidated Statement of Earnings Three months ended April 30, 1996 and 1995 (unaudited) 3 Condensed Consolidated Balance Sheets April 30, 1996 (unaudited), and January 31, 1996 4-5 Condensed Consolidated Statements of Cash Flows Three months ended April 30, 1996 and 1995 (unaudited) 6 Notes to Condensed Consolidated Financial Statements (unaudited) 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8-10 PART II. OTHER INFORMATION Items 1-5 11 Item 6. Exhibits and Reports on Form 8-K 11 SIGNATURES 11
TOTAL-TEL USA COMMUNICATIONS, INC. AND SUBSIDIARIES ---------------------------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) ---------------------------------------------------- Three months ended April 30, ----------------- 1996 1995 ---- ---- Net Sales $17,370,047 $10,515,612 ---------------------------------- Costs and Expenses Cost of Sales 12,588,507 7,401,128 Selling, general and administrative 3,974,820 2,545,892 ---------------------------------- 16,563,327 9,947,020 ---------------------------------- Operating Income 806,720 568,592 ---------------------------------- Other Income (Expense) Interest income 23,619 30,117 Other income 15,743 1,002 Interest expense - (4,007) ---------------------------------- Total Other Income 39,362 27,112 ---------------------------------- Earnings before provision for income taxes 846,082 595,704 Provision for Income Tax (342,700) (230,100) ---------------------------------- NET EARNINGS $503,382 $365,604 ---------------------------------- NET EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE $0.15 $0.11 ---------------------------------- Weighted Average Shares Outstanding 3,338,026 3,230,126 ---------------------------------- Dividends Per Share NONE NONE See notes to condensed consolidated financial statements.
TOTAL-TEL USA COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS APRIL 30, JANUARY 31, 1996 1996 (Unaudited) (Note) ASSETS CURRENT ASSETS: Cash and cash equivalents $3,795,527 $3,177,138 Securities available for sale 772,381 966,935 Accounts receivable 10,037,654 8,741,918 Note receivable 37,000 27,000 Deferred income taxes 332,600 314,600 Prepaid expenses and other current assets 589,810 392,974 ------------------------------ TOTAL CURRENT ASSETS 15,564,972 13,620,565 PROPERTY AND EQUIPMENT, LESS ACCUMULATED DEPRECIATION AND AMORTIZATION 6,042,311 6,011,005 OTHER ASSETS: Deferred income taxes 88,146 90,281 Deferred line installation costs, less accumulated amortization 237,462 247,019 Other assets 435,487 426,164 ------------------------------ 761,095 763,464 ------------------------------ $22,368,378 $20,395,034 ------------------------------ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $7,903,015 $6,604,459 Other current and accrued liabilities 1,670,046 1,775,256 Salaries and wages payable 627,930 441,516 ------------------------------ TOTAL CURRENT LIABILITIES 10,200,991 8,821,231 ------------------------------ OTHER LONG-TERM LIABILITIES 300,112 313,742 ------------------------------ DEFERRED INCOME TAXES 624,431 560,481 ------------------------------ SHAREHOLDERS' EQUITY Common stock 93,671 93,440 Additional paid-in capital 3,634,766 3,600,105 Retained earnings 9,093,711 8,590,329 ------------------------------ 12,822,148 12,283,874 Treasury stock (1,547,251) (1,547,251) Receivable from shareholder (100,000) (100,000) Unrealized gain on securities available for sale 67,947 62,957 ------------------------------ Total shareholders' equity 11,242,844 10,699,580 ------------------------------ $22,368,378 $20,395,034 ------------------------------ NOTE: The balance sheet at January 31, 1996 has been taken from the audited consolidated financial statements at that date. See notes to condensed consolidated financial statements.
TOTAL TEL USA COMMUNICATIONS, INC. AND SUBSIDIARIES --------------------------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS --------------------------------------------------- (Unaudited) Three months ended April 30, ------------------- 1996 1995 OPERATING ACTIVITIES Net earnings $503,382 $365,604 Adjustment for non-cash charges 602,587 359,784 Changes in assets and liabilities (392,872) 307,299 ------------------------------ Net cash provided by operating activities 713,097 1,032,687 ------------------------------ INVESTING ACTIVITIES: Maturities of securities available for sale 371,400 152,161 Purchase of securities available for sale (168,631) - Note receivable employee (10,000) - Collection of notes receivable 2,135 22,612 Purchase of property and equipment (313,699) (503,457) Additions to deferred line installation costs (10,805) (24,585) ------------------------------ Net cash used in investing activities (129,600) (353,269) ------------------------------ FINANCING ACTIVITIES: Exercise of stock options 34,892 - ------------------------------ Net cash provided by financing activities 34,892 - ------------------------------ NET INCREASE IN CASH AND CASH EQUIVALENTS 618,389 679,418 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,177,138 1,347,625 ------------------------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $3,795,527 $2,027,043 ------------------------------ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ - 2,187 Income taxes $120,000 $235,375 See notes to condensed consolidated financial statements.
TOTAL-TEL USA COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A--Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to consolidated financial statements included in the Annual Report on Form 10-K of Total-Tel USA Communications, Inc. and Subsidiaries (the "Company") for the fiscal year ended January 31, 1996. In the opinion of Management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended April 30, 1996 are not necessarily indicative of the results that may be expected for the year ending January 31, 1997. Note B -- Stock Split On July 1, l996, the Company will distribute 1,463,165 shares of Common Stock $.05 par value, in connection with a 2 for 1 stock split to record holders as of June 15, l996. All references in the accompanying financial statements to the number of Common Shares and per-share amounts have been restated to reflect the proposed stock split. TOTAL-TEL USA COMMUNICATIONS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS Results of Operations Net sales were approximately $17,370,000 for the first quarter of the current fiscal year, an increase of approximately $6,854,000, or 65.2%, as compared to the first quarter of the prior fiscal year. This increase was attributable to continued, intensive sales and marketing efforts by the Registrant, an expanded agency sales network, and increased carrier sales. However, given the competitive climate in the long distance telephone industry, there can be no assurance that this rate of growth will continue throughout the remainder of the current fiscal year. For the current fiscal quarter, the telephone service billed approximately 134,180,000 minutes of calling as compared to approximately 71,501,000 minutes of calling for the comparable quarter of the prior year, resulting in an increase of approximately 62,679,000 minutes, or 87.7%. The average revenue per minute decreased slightly in the current fiscal quarter as compared to the prior fiscal year's quarter, and was primarily attributable to the intense competition faced by the Registrant. Cost of sales increased approximately $5,188,000 or 70.1% to approximately $12,589,000 for the current quarter. The increase was unfavorable in relation to the 65.2% increase in sales. While the Registrant was able to continue to negotiate lower line rates from several of its major suppliers, the gross margin for the current quarter decreased to approximately 27.5% as compared to approximately 29.6% for the same quarter of the prior fiscal year. This decrease in the gross margin is reflective of the lower charge per minute billed by the Registrant which was approximately $.0179 per minute lower for the current fiscal quarter compared to the same quarter of the prior fiscal year and was primarily attributable to increased carrier sales. Selling, general and administrative expense for the current fiscal quarter was approximately $3,975.000, an increase of approximately $1,429,000, or 56.1%, as compared to the first quarter of the prior fiscal year due primarily to increased sales and administrative salaries of $566,000, sales commissions of $293,000, provision for bad debts of $76,000, and advertising costs of $87.000, all of which can be attributed to the increased sales volume in the quarter.The Registrant has also provided $120,000 for legal expenses for a suit to which it is a party. TOTAL-TEL USA COMMUNICATIONS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Earnings per share from continuing operations increased to $.15 per share for the current quarter as compared to $.11 per share for the quarter ended April 30, l995. Liquidity and Capital Resources At April 30, 1996, the Registrant had working capital of $5,363,981, an increase of $564,647 as compared to January 31, 1996. The ratio of current assets to current liabilities at April 30, 1996 was 1.5:1 the same as January 31, l996. The increase in working capital at April 30, 1996 was attributable to increases in (i) cash of approximately $618,000 (ii) accounts receivable of $1,296,000 and (iii) prepaid expenses and other current assets of approximately $197,000, a decrease in other current and accrued liabilities of $105,000, partially offset by an increase in accounts payable of approximately $1,299,000 a decrease in investments available for sale of approximately $195,000 and an increase in salaries and wages payable of $186,000. The Registrant has continued to maintain a strong liquidity position. The increase in cash of approximately $618,000 was the result primarily of earnings of approximately $503,000, an increase in accounts payable of approximately $1,299,000, non-cash charges of approximately $360,000, maturities of investments available for sale of approximately $371,000 and approximately $35,000 from the exercise of stock options, partially offset by an increase in accounts receivable of approximately $1,296,000, the purchase of property and equipment for approximately $314,000 an increase in prepaid expenses and other current assets of approximately $197,000 for the purchase of investments available for sale of approximately $169,000. Capital expenditures during the first three months of fiscal year 1997 totaled approximately $314,000 and were financed from funds provided by operations. Approximately $105,000 of these expenditures were applicable to the switching system to maintain the speed and quality of the network and $61,000 was expended for equipment at customer's locations. In addition, approximately $140,000 was expended for the local area network in the Little Falls, New Jersey office to improve management information systems and operating efficiencies. The balance of capital expenditures was for furniture and fixtures. TOTAL-TEL USA COMMUNICATIONS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Capital expenditures for the balance of 1997 are estimated at approximately $3,200,000 and are expected to be used for the following: To provide further enhancements to the signaling and switching system, to enhance the interconnection to the Bell Companies and other long distance carriers and to increase switching capacity to allow for growth; for office improvements, furniture and equipment in connection with the expansion of the main office and sales office operation; for new data processing equipment to complement and expand the present system of the Registrant; improvement to the new facility located in Belleville, New Jersey; continued development of the local network for the new sales and administrative offices in Little Falls, New Jersey; for additional vehicles for service technicians. As of April 30, 1996, the Registrant had a bank line of credit of $500,000, and no bank borrowings. The Registrant is currently in the process of negotiating a substantially increased line of credit with a major New Jersey bank, a portion of which would be available for capital expenditures. TOTAL-TEL USA COMMUNICATIONS, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION THREE MONTHS ENDED APRIL 30, 1996 ITEMS 1 - 5 Not applicable ITEM 6 Exhibits and reports on Form 8-K (a) Exhibits - none (b) There were no reports on Form 8-K filed for the three months ended April 30, 1996. 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. TOTAL-TEL USA COMMUNICATIONS, INC. ---------------------------------- (Registrant) Date June 10, 1996 By /S/ Warren H. Feldman, Esq. ------------- ------------------------------------- Warren H. Feldman, Esq. President and Chief Executive Officer Date June 10, 1996 By /S/ Thomas P. Gunning ------------- ------------------------------------- Thomas P. Gunning Chief Financial Officer, Secretary, Controller and Principal Accounting Officer EX-27 2
5 TOTAL-TEL USA COMMUNICATIONS, INC. Exhibit 27 - FINANCIAL DATA SCHEDULE THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 1996 AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS JAN-31-1997 APR-30-1996 3,795,527 772,381 11,300,429 1,262,775 0 15,564,972 11,391,891 5,349,560 22,368,378 10,200,991 0 93,671 0 0 11,149,173 22,368,378 17,370,047 17,409,409 12,588,507 12,588,507 3,763,097 211,723 0 846,082 342,700 503,382 0 0 0 503,382 0.15 0.15
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