-----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, IvOv635R+23A087uer2xayhwB/q3ySph9eDzmhzLUsVLwfYKGbnRTBzZcTA+6qLQ I9vZWYTkx3uVTt3LZjRBJQ== 0000912057-95-009956.txt : 19951119 0000912057-95-009956.hdr.sgml : 19951119 ACCESSION NUMBER: 0000912057-95-009956 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRIFFIN TECHNOLOGY INC CENTRAL INDEX KEY: 0000082295 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER & OFFICE EQUIPMENT [3570] IRS NUMBER: 160864416 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-03321 FILM NUMBER: 95592308 BUSINESS ADDRESS: STREET 1: 1133 CORPORATE DR CITY: FARMINGTON STATE: NY ZIP: 14425 BUSINESS PHONE: 7169247121 MAIL ADDRESS: STREET 1: 1133 CORPORATE DRIVE STREET 2: 1133 CORPORATE DRIVE CITY: FARMINGTON STATE: NY ZIP: 14425 FORMER COMPANY: FORMER CONFORMED NAME: RD PRODUCTS INC DATE OF NAME CHANGE: 19820913 10QSB 1 FORM 10-QSB Page 1 of 6 FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended SEPTEMBER 30, 1995 ------------------ OR ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------- --------- Commission File Number 0-3321 GRIFFIN TECHNOLOGY INCORPORATED --------------------------------------------------------- (Exact name of small business issuer as specified in its charter) NEW YORK 16-0864416 ------------------------------- --------------------------------- (State or other jurisdiction (IRS Employer Identification No.) incorporation or organization) 1133 Corporate Drive Farmington, New York 14425 ------------------------------------ ------- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: (716) 924-7121 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the 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 November 10, 1995 the Issuer had outstanding 2,387,107 shares of Common Stock. Transitional Small Business Disclosure Format (check one): Yes No X ----- ----- Page 2 0f 6 GRIFFIN TECHNOLOGY INCORPORATED BALANCE SHEET (UNAUDITED)
September 30, June 30, ------------------------ ---------- 1995 1994 1995 -------- -------- ---------- ASSETS Current assets: Cash $ 200,600 $ 94,400 $ 119,200 Accounts receivable 9,917,400 9,350,100 3,946,800 Inventories 3,488,100 4,218,900 3,903,900 Prepaid expenses and other current assets 239,200 186,900 218,000 Refundable income taxes 76,600 Deferred income tax charges 409,000 388,500 409,000 Electronic systems, at cost 13,947,900 13,948,100 13,947,900 Less - Accumulated amortization (13,946,900) (13,935,700) (13,945,600) ---------- ---------- ---------- Net electronic systems 1,000 12,400 2,300 ---------- ---------- ---------- Total current assets 14,255,300 14,327,800 8,599,200 ---------- ---------- ---------- Long-term electronic systems, at cost 16,308,300 15,797,300 16,942,500 Less - Accumulated amortization (11,454,600) (9,609,600) (11,174,700) ---------- ---------- ---------- Net electronic systems 4,853,700 6,187,700 5,767,800 ---------- ---------- ---------- Property, plant and equipment, at cost 5,859,100 5,556,900 5,730,200 Less - Accumulated depreciation and amortization (4,282,000) (3,973,700) (4,213,100) ---------- ---------- ---------- Net property, plant and equipment 1,577,100 1,583,200 1,517,100 ---------- ---------- ---------- Deferred software costs, net 990,400 1,110,400 1,018,000 ---------- ---------- ---------- Other assets 480,800 114,100 371,900 ---------- ---------- ---------- Total assets $22,157,300 $23,323,200 $17,274,000 ---------- ---------- ---------- ---------- ---------- ---------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 600,000 $ 600,000 $ 600,000 Accounts payable 1,086,100 810,200 981,700 Accrued payroll and related taxes 590,300 670,700 484,300 Other accrued liabilities and expenses 440,400 204,100 448,600 Income taxes payable 47,200 152,800 47,200 Unearned service fees 6,488,100 8,213,500 1,861,700 ---------- ---------- ---------- Total current liabilities 9,252,100 10,651,300 4,423,500 Long-term debt 5,250,000 5,500,000 5,600,000 Employee stock purchase plan 4,600 11,800 Deferred income tax credits 759,000 532,100 633,100 ---------- ---------- ---------- Total liabilities 15,261,100 16,688,000 10,668,400 ---------- ---------- ---------- Shareholders' equity Common stock, par value $.05 per share Authorized - 6,000,000 shares Issued and outstanding - 2,384,707, 2,376,647 and 2,382,747 shares, respectively 119,300 118,800 119,100 Capital in excess of par value 3,499,800 3,460,600 3,487,700 Retained earnings 3,277,100 3,055,800 2,998,800 ---------- ---------- ---------- Total shareholders' equity 6,896,200 6,635,200 6,605,600 ---------- ---------- ---------- Total liabilities and shareholders' equity $22,157,300 $23,323,200 $17,274,000 ---------- ---------- ---------- ---------- ---------- ----------
SEE NOTES TO FINANCIAL STATEMENTS Page 3 of 6 GRIFFIN TECHNOLOGY INCORPORATED STATEMENT OF INCOME (UNAUDITED)
For the three months ended September 30, -------------------------- 1995 1994 ---------- ---------- Revenues: Service fees $2,662,000 $3,308,900 Net sales 3,853,200 1,603,900 --------- --------- Total revenues 6,515,200 4,912,800 --------- --------- Costs and expenses: Cost of sales 2,521,700 878,500 Service of electronic systems 1,174,700 1,196,500 Amortization of electronic systems 498,700 532,500 Amortization of software costs 96,600 77,400 Selling, general and administrative 949,100 1,123,400 Research and development 717,100 640,900 Interest 148,100 135,700 --------- --------- Total costs and expenses 6,106,000 4,584,900 --------- --------- Income before income taxes 409,200 327,900 Income tax expense 130,900 108,200 --------- --------- Net income $ 278,300 $ 219,700 --------- --------- --------- --------- Earnings per common and common equivalent share $.12 $.09 ---- ---- ---- ---- Dividends per share -0- -0- --- --- --- --- Weighted average number of common and common equivalent shares outstanding 2,392,334 2,383,638 --------- --------- --------- ---------
SEE NOTES TO FINANCIAL STATEMENTS Page 4 of 6 GRIFFIN TECHNOLOGY INCORPORATED STATEMENT OF CASH FLOWS (UNAUDITED)
For the three months ended September 30, --------------------------- 1995 1994 ----------- ----------- Cash flows from operating activities: Net income for the period $ 278,300 $ 219,700 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property and equipment 68,900 74,400 Amortization of electronic systems 498,700 532,500 Amortization of software development costs 96,600 77,400 Benefit from deferred taxes 125,900 Increase in unearned service fees 4,626,400 5,812,700 (Increase) in accounts receivable (5,970,600) (5,958,900) Decrease(increase) in inventories 415,800 (224,600) (Increase) in prepaid expenses (21,100) (47,400) (Increase) in deferred software costs (69,000) (52,000) Increase(decrease) in liabilities excluding borrowings 202,200 (16,300) Other items, net (108,900) (5,600) --------- --------- Total adjustments (135,100) 192,200 --------- --------- Net cash provided by operating activities 143,200 411,900 --------- --------- Cash flows from financing activities: Provided from employee stock option and stock purchase plans 500 42,500 Revolving credit and term loan agreement Borrowings 500,000 1,000,000 Repayments (850,000) (1,000,000) --------- --------- Net cash (used in) provided by financing activities (349,500) 42,500 --------- --------- Cash flows from investing activities: Additions to electronic system equipment (404,300) Additions to property, plant and equipment (128,900) (16,200) Sale of electronic systems 416,600 --------- --------- Cash provided by (used in) investing activities 287,700 (420,500) --------- --------- Increase in cash 81,400 33,900 Cash at beginning of period 119,200 60,500 --------- --------- Cash at end of period $ 200,600 $ 94,400 --------- --------- --------- --------- Interest paid $ 147,200 $ 129,400 --------- --------- --------- --------- Income taxes paid $ 3,900 $ 6,000 --------- --------- --------- ---------
SEE NOTES TO FINANCIAL STATEMENTS Page 5 of 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION FINANCIAL CONDITION AND LIQUIDITY: Operating activities for the quarter ended September 30, 1995, provided $143,200 of cash flow compared to $411,900 for the first quarter one year ago. Factors other than the normal seasonal nature and cyclical pattern of the college and university market continued to have a material effect on the current quarter's cash flow. In fiscal year ended June 30, 1995, Griffin deviated from the past business practice of lease agreements for its installed electronic systems. New policies related to sales of card reading terminals and electronic systems/software resulted in a significant change to certain accounts on the Balance Sheet and impacted cash flow. Inventories and unearned service fees at September 30, 1995, are down $730,800 and $1,725,400, respectively; accounts receivable are up $567,300; and working capital is $5,003,200 compared to $3,676,500 one year ago. As previously reported, Griffin's operations during Fiscal 1995 rendered the Company unable to comply with certain covenant requirements contained in the Fifth Amended and Restated Revolving Credit and Term Loan Agreement negotiated with a bank November 3, 1994. The situation continued into the current quarter, and the bank granted waivers for the specific events of default existing at June 30 and September 30, 1995. As of November 10, 1995, the monies borrowed under this agreement were $5,100,000 compared to $5,900,000 on the same date in 1994. Management is reviewing the agreement with the bank and believes that sufficient funds will be available to meet Griffin's operating cash requirements during the foreseeable future. RESULTS OF OPERATIONS: Total revenues for the quarter ended September 30, 1995, amounted to $6,515,200, a net increase of 33%, or $1,602,400, over 1994. As a result of the change in business policy mentioned above, there was a significant shift in the current quarter of types of revenue generated. Service fees related to system lease agreements decreased $646,900 while net sales of electronic systems/software and peripheral equipment increased $2,249,300. The backlog of system/software sales is currently in excess of $500,000. Costs and expenses during the three months ended September 30, 1995, increased $1,521,100 over the same 1994 period. The material cost of products sold accounts for almost all of this increase. Elimination of staff positions by realigning sales and marketing functions, electronic system service, and housing information system functions accounted for cost savings in these areas. Earnings for the first quarter of the current year were $278,300, or $.12 per share, compared with earnings for the same period one year ago of $219,700, or $.09 per share. The effective annual income tax rate is approximately the same for the first quarter in each fiscal year. Page 6 of 6 NOTES TO FINANCIAL STATEMENTS Results for the period ended September 30 are not necessarily indicative of results to be expected for the year because Griffin's sales historically reach seasonal highs during the months of July through September and again during the months of April through June. Information furnished reflects all adjustments which are, in the opinion of management, necessary to a fair statement of results for interim periods presented. All such adjustments are of a normal recurring nature. Net income per share was computed on the basis of the weighted average number of common and common equivalent shares outstanding during each period. The common equivalent shares represent shares contingently issuable under Griffin's stock option plan. PART II. OTHER INFORMATION Item 5. Other Information On October 23, 1995, Griffin Technology Incorporated (the "Company") announced that it had entered into an Agreement and Plan of Merger ("Agreement") with Diebold, Incorporated, ("Parent"), pursuant to which D-GT Acquisition, Incorporated ("Purchaser"), a New York corporation and a wholly-owned subsidiary of Parent, agreed to offer to purchase all of the issued and outstanding shares of the Company's Common Stock at a price of $7.75 net per share payable in cash through a tender offer to the stockholders of the Company (the "Offer"). The Agreement provides for a subsequent merger of Purchaser into the Company at the same price per share paid pursuant to the Offer. The Board of Directors of the Company unanimously recommended that stockholders of the Company tender their shares pursuant to the Offer after the Board gave careful consideration to a number of factors, which are described in the Company's Schedule 14D-9, as amended, filed with the Securities and Exchange Commission. The Annual Meeting of Griffin scheduled for November 16, 1995, will be in adjournment until further notice in view of the transactions contemplated by the above Agreement. Item 6. Exhibits and Reports on Form 8-K a. Exhibits None b. No reports on Form 8-K were filed for the quarter ended September 30, 1995. SIGNATURE 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 to sign on its behalf and as the registrant's principal financial and accounting officer. GRIFFIN TECHNOLOGY INCORPORATED BY: s/Joseph A. Murrer ---------------------------------------------- Joseph A. Murrer Vice President - Finance and Administration Treasurer and Secretary Date: November 14, 1995 EX-27 2 EX-27
5 3-MOS JUN-30-1996 JUL-01-1995 SEP-30-1995 200,600 0 9,917,400 0 3,488,100 14,255,300 22,167,400 15,736,600 22,157,300 9,252,100 0 119,300 0 0 3,499,800 22,157,300 3,853,200 6,515,200 2,521,700 6,106,000 0 0 148,100 409,200 130,900 278,300 0 0 0 278,300 .12 .12
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