1996 2nd FQ REPORT
To Our Shareholders:
In the second quarter of fiscal 1996 ended December 31, 1995, Teletek, Inc.,
posted the most successful financial results in its history. We reported net
sales of $9,792,192 which represented a 778% increase compared to $1,115,044
reported in the corresponding quarter of 1994. Gross profit for the quarter was a
record $2,099,287 compared to $417,467 for the second quarter of the previous
year.
We also established new quarterly records for net income and net income per
share. Net income for the second quarter was $568,380 or $0.07 per share (based
on 8.169 million weighted average shares), compared to a loss of $581,999, or
$0.15 per share (based on 3.73 million weighted average shares) for the second
quarter of fiscal 1995.
It is important to note that the latest results included a $575,000 non-operating
litigation charge. Excluding the impact of this charge, net income for the three
months ended December 31, 1995, would have been $1,143,380 or $0.14 per share.
The company has continued to post strong operating numbers by delivering
reliable, competitively-priced nationwide and international long distance
telephone services to a growing number of business customers. Our balance sheet
remains strong, supported by positive cash flow.
As we look forward toward the remainder of fiscal 1996 and begin to plan for
fiscal 1997, we see opportunities for expansion. As previously reported, we have
contracted for the purchase of two additional DEX600SC switching systems, with
SS7 capability, from DSC Communications, a leader in the production of long
distance telephone equipment. Installation of one of these switches in the
Overland Park, Kansas area is expected to be completed and the system operating
by the 1st of March.
We appreciate the loyalty and support that you, our shareholders, have provided
over the past. We remain committed to continue on the path to increased net sales
and profitability.
Sincerely,
John M. Vergiels Chairman
TELETEK, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF INCOME (Unaudited)
For the Three For the Six Months
Months Ended Ended
December 31, December 31,
1995 1994 1995 1994
Net sales $ 9,792,192 $ 1,115,044 $13,739,339 $ 2,119,675
Less cost of sales 7,692 697,577 10,338,336 1,428,045
---------- ---------- ---------- ----------
Gross profit 2,099,257 417,467 3,400,003 691,630
Selling, general
and
administrative
expenses 1,512,614 1,102,200 2,371,455 2,073,452
---------- ---------- ---------- ----------
Operating income
or (loss) 586,643 (684,733) 1,028,548 (1,381,822)
Other income and
(expenses), net (8,263) 102,734 (4,557) 124,806
Income (Loss of
Subsidiary) (10,000) --- (20,000) ---
---------- ---------- ---------- ----------
Net income (loss)
before income
taxes $ 568,380 $ (581,999) $ 1,003,990 $(1,257,016)
Provision for
income taxes --- --- --- ---
---------- ---------- ---------- ----------
Net income or
(loss) $ 568,380 $ (581,999) $ 1,003,990 $(1,257,016)
========== ========== ========== ==========
Net income or
(loss) per share $ .07 $ (.15) $ .13 $ (.38)
========== ========== ========== ==========
Weighted Average
Shares
Outstanding 8,169,379 3,762,958 7,828,631 3,311,782
See accompanying notes to
consolidated financial statements.
TELETEK, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS
December 31, June 30,
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 842,467 $ 356,538
Marketable securities-available for sale 14,800 14,800
Receivables
Trade accounts, net of allowance for
doubtful accounts of $70,475 at
June 30 and $146,287 at December 31 5,705,207 798,400
Interest receivable-related party 5,451 3,516
Employee receivable --- 93,000
Notes Receivable-current 106,609 235,945
Prepaid expenses and other current assets 157,306 175,963
---------- ----------
Total Current Assets 6,831,840 1,678,162
---------- ----------
PROPERTY AND EQUIPMENT 1,860,126 932,828
---------- ----------
OTHER ASSETS
Investment in United Payphone Services 286,178 306,177
Marketable securities-held to maturity 1,817,591 1,817,591
Note receivable-related party 185,061 169,443
Licenses 93,363 20,453
Deposits 27,374 13,395
---------- ----------
Total Other Assets 2,409,567 2,327,059
---------- ----------
Total Assets $11,101,533 $ 4,938,049
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 5,577,331 $ 976,553
Accrued taxes 20,492 15,680
Deposits 100,400 100,000
Current Portion-Long Term Debt 207,520 ---
---------- ----------
Total Current Liabilities 5,905,743 1,092,233
---------- ----------
LONG-TERM DEBT 211,272 2,310
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value;
100,000,000 shares authorized;
8,583,211 and 7,489,134 shares issued
and outstanding 858 749
Convertible Preferred stock, no par
class A; 50,000,000 shares authorized;
258,624 and 278,624 shares issued and
outstanding 534,513 575,913
Convertible Preferred stock, no par,
class B; 50,000,000 shares authorized;
9,450 and 13,241 shared issued and
outstanding (Note 3) 365,089 601,345
Convertible Preferred stock, no par,
class C, 50,000,000 Authorized, 1350
and 0 shares issued and outstanding 70,000 ---
Additional paid-in capital 10,832,516 10,529,970
Unrealized holding gains from
marketable securities 8,400 8,400
Accumulated deficit (6,826,858) (7,872,871)
---------- ----------
Total Stockholders' Equity 4,984,518 3,843,506
========== ==========
$11,101,533 $4,983,049 |
