<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For period ended March 31, 1997
[ ] 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 0-29026
ENSTAR INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1831611
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6479 City West Parkway
Eden Prairie, Minnesota 55344
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (612) 941-3200
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
------- --------
At April 30, 1997, 3,304,279 shares of common stock of the registrant were
outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ENStar Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
-----------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 1,867 $ 824
Accounts receivable, net 7,868 8,785
Inventories 6,546 5,706
Prepaid expenses and other current assets 266 481
--------------------------------
Total current assets 16,547 15,796
Property and equipment, net 1,758 1,742
Investment in unconsolidated subsidiary 10,926 13,519
Goodwill, net 4,762 4,801
Other assets 229 157
--------------------------------
$ 34,222 $ 36,015
================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable to bank $ 1,435 $ 1,310
Current portion of long-term debt 29 28
Accounts payable 4,618 4,101
Accrued expenses 5,427 4,830
--------------------------------
Total current liabilities 11,509 10,269
Long-term debt, net of current maturities 3,330 1,150
Deferred income taxes 2,217 3,649
Shareholders' Equity
Common stock, $.01 par value
100,000,000 shares authorized,
issued and outstanding 3,304,279
shares in 1997 and 1996 33 33
Additional paid-in-capital 17,511 20,710
Retained earnings (deficit) (378) 204
---------------------------------
Total shareholders' equity 17,166 20,947
----------------------------------
$ 34,222 $ 36,015
==================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
ENStar Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1997 1996
-------------------------------
<S> <C> <C>
Revenues $ 11,932 $ 15,362
Operating and product costs 8,363 11,200
-------------------------------
Gross profit 3,569 4,162
Selling, general,
and administrative expenses 4,826 3,879
-------------------------------
Operating income (loss) (1,257) 283
Interest expense, net (84) (66)
--------------------------------
Income (loss) before income taxes
and equity in earnings of
unconsolidated subsidiary (1,341) 217
Income tax provision (benefit) (450) 104
-------------------------------
Income (loss) before equity in
earnings of unconsolidated
subsidiary (891) 113
Equity in earnings of
unconsolidated subsidiary 309 304
-------------------------------
Net income (loss) $ (582) $ 417
===============================
Net income (loss) per share $ (.18) $ .13
===============================
Weighted average shares
outstanding 3,304,279 3,296,000
===============================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
ENStar Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
1997 1996
---------------------------- ---
<S> <C> <C>
Net cash provided by (used in)
operating activities $ 322 $ (508)
Cash flows from investing activities
Capital expenditures (232) (210)
Other (72) (76)
--------------------------------
Net cash used in investing activities (304) (286)
--------------------------------
Cash flow from financing activities
Proceeds from long-term debt 2,187 ---
Payments on long-term debt (7) ---
Proceeds from notes payable 14,039 16,192
Payments on notes payable (13,914) (16,027)
Additional capital invested
(constructive dividends) (1,280) 512
--------------------------------
Net cash provided by financing
activities 1,025 677
--------------------------------
Net increase (decrease) in cash and
cash equivalents 1,043 (117)
Cash and cash equivalents
at beginning of period 824 246
--------------------------------
Cash and cash equivalents
at end of period $ 1,867 $ 129
==================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
ENStar Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Business
ENStar Inc. ("ENStar" or "the Company") is a holding company principally
comprised of two operating companies, Americable, Inc. ("Americable") and
Transition Networks, Inc. ("Transition"), and an equity investment in CorVel
Corporation ("CorVel"). ENStar was formerly an operating unit of North Star
Universal, Inc. ("North Star" or "NSU"). In November 1996, North Star
contributed the Operating Unit's assets to ENStar. On February 28, 1997,
North Star, in connection with its merger with Michael Foods, Inc. ("Michael
Foods"), distributed its ownership interest in ENStar to North Star's
Shareholders through a tax free dividend, thus causing ENStar to become a
publicly held company.
2. Basis of Presentation --
The accompanying consolidated financial statements prior to November 1996
were financial statements of the operating unit comprised of the entities and
assets described in Note 1. Operating unit equity was converted to
contributed capital at the time North Star contributed the capital stock of
Americable, Transition, and CorVel to ENStar. There was no change in the
historical cost basis of the assets and liabilities of any of the entities or
investment contributed to ENStar. The consolidated financial statements for
1996 include an allocation of general and administrative costs incurred by
North Star in the management of the operating companies. Management believes
these allocations are reasonable and present the operations of the Company
as though it had operated on a stand-alone basis. Previously, operating unit
equity included the historical equity of each entity, the net investment in
CorVel and intercompany payables owed to North Star. The net annual advances
between the former operating unit and North Star were considered additional
capital invested from, or constructive dividend to, North Star. Accordingly,
the accompanying consolidated financial statements may not necessarily be
indicative of the results that would have been obtained if the Company had
been operated as a stand-alone entity throughout all periods presented.
The accompanying unaudited condensed consolidated financial statements
have been prepared by ENStar without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The information
furnished in the condensed consolidated financial statements includes normal
recurring adjustments which are, in the opinion of management, necessary
for a fair presentation of such financial statements. Certain information
and footnote disclosure normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
<PAGE>
ENStar, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
condensed or omitted pursuant to such rules and regulations. Although the
Company believes that the disclosures are adequate to make the information
presented not misleading, it is suggested that these condensed consolidated
financial statements be read in conjunction with the financial statements
and the notes thereto included in the Company's latest annual report on
Form 10-K.
Results for the three months ended March 31 may not necessarily be
indicative of the results to be expected for the full year.
3. Investment in Unconsolidated Subsidiary --
The Company's unconsolidated subsidiary consists of its investment in
CorVel Corporation ("CorVel"). At March 31, 1997, ENStar owned 1,025,000
shares, or an approximate 24% ownership, in CorVel. The Company's investment
in CorVel is accounted for as an unconsolidated subsidiary using the equity
method of accounting. CorVel has a fiscal year ended March 31. The following
is summarized balance sheet and income statement information of the Company's
unconsolidated subsidiary as of, and for the three month period ended March
31, 1997 (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Current assets $ 38,733
Noncurrent assets 18,995
Current liabilities 8,863
Noncurrent liabilities 2,778
Revenues 31,693
Gross profit 5,822
Net income 2,205
</TABLE>
In January 1997, ENStar, at the direction of North Star, sold 200,000
shares of CorVel for approximately $5.1 million cash. The proceeds from the
sale were distributed to and retained by North Star. The book value of the
shares sold was approximately $1.4 million, net of deferred taxes, and has
been reflected as a dividend to North Star during the period ended March 31,
1997. In addition, as a result of other equity transactions of CorVel, ENStar
decreased its investment in unconsolidated subsidiary by approximately
$900,000, additional paid-in capital by $540,000, and deferred income taxes by
$360,000. At March 31, 1997, the value of the Company's investment in CorVel,
based on the closing market price, was approximately $25.6 million.
<PAGE>
ENStar Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
4. Inventories --
Inventories are stated at the lower of average cost (first-in, first-out)
or market. Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------------------------------
<S> <C> <C>
Finished goods $ 4,687 $ 3,285
Purchased parts 1,859 2,421
--------------------------------
$ 6,546 $ 5,706
--------------------------------
--------------------------------
</TABLE>
5. Net Income (Loss) Per Share --
Net income (loss) per share for 1997 was based on the average number of
shares outstanding during the period after giving effect to the assumed
exercise of outstanding stock options, except where the effects are
antidilutive.
Net income per share for 1996 was computed based on the 9,887,000
weighted average number of shares of North Star common stock outstanding after
giving effect to the assumed exercise of North Star's outstanding stock
options. This weighted average number of shares was adjusted to reflect the
distribution of ENStar common stock to North Star shareholders whereby one
share of ENStar common stock was issued to each holder of three shares of
North Star common stock.
6. New Accounting Pronouncement -
The FASB has issued Statement of Financial Accounting Standards No. 128,
Earnings Per Share, which is effective for financial statements issued after
December 15, 1997. Early adoption of the new standard is not permitted. The
new standard eliminates primary and fully diluted earnings per share and
requires presentation of basic and diluted earnings per share together with
disclosure of how the per share amounts were computed. The effect on the
Company's financial statements of adopting this new standard has not been
determined.
<PAGE>
ENStar Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
7. Income Taxes --
Deferred income taxes arise from temporary differences between financial
and tax reporting. To the extent the Company's financial reporting basis in
its investment in unconsolidated subsidiary exceeds its tax basis, and is not
expected to be realized in a tax-free manner, the Company records a deferred
tax liability. At March 31, 1997, the deferred tax liability includes a
cumulative tax effect of approximately $4 million for the differences in the
financial reporting and tax basis of the Company's investment in CorVel.
8. Contingencies -
In connection with the merger of North Star and Michael Foods, ENStar,
through the operation of an indemnification agreement, is contingently liable
for any, and all, liabilities arising from the activities of North Star,
through, and including, the reorganization of North Star and Michael Foods.
Under the terms of the indemnification agreement, the Company is required to
maintain certain minimum levels of market captialization or net worth for a
period of five years.
9. Reclassifications --
Certain 1996 amounts have been reclassified to conform with the financial
statement presentation used in 1997. Such reclassifications had no impact on
previously reported retained earnings or net income.
<PAGE>
ENStar Inc.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the financial condition and results of
Operations of the Company should be read in conjunction with the
Consolidated Financial Statements and the Notes thereto included
elsewhere in this report.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning
of Section 27A of the Securiries Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These statements include
statements regarding intent, belief, or current expectations of the Company
and its management. Shareholders and prospective investors are cautioned that
any such forward-looking statements are not guarantees of future performance
and involve a number of risks and uncertainties that may cause the Company's
actual results to differ materially from the results discussed in the
forward-looking statements. Among the factors that could cause actual results
to differ materially from those indicated by such forward-looking statements
are general economic conditions, computer and computer networking industry
conditions, risks associated with the cost required for the development and
offering of new products and services that may not be commercially successful,
the rapid technological changes occurring in the markets in which the Company
operates, failure to successfully execute Americable's expansion strategy,
dependence on and the need to recruit and retain key personnel, the
concentration of the Company's revenues with certain customers, dependence on
key suppliers and product supply, the substantial competition in the markets
in which the Company operates and certain indemnification obligations relating
to the Reorganization Transactions. Each of these factors is more fully
discussed in Exhibit 99 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996.
GENERAL
ENStar Inc. is a holding company. Its principal subsidiaries are
Americable, Inc. ("Americable") and Transition Networks, Inc. ("Transition").
Americable's operations are organized into two primary business units, Enstar
Networking Corporation ("Enstar Networking") and Americable Distribution. As
a network integrator, Enstar Networking provides services designed to build,
maintain, and secure LAN and WAN infrastructures for large and medium sized
end-users. These networking services include planning, implementation,
maintenance, security, and product fulfillment. As a value-added
distributor, Americable is a provider of networking and connectivity products,
cable assemblies, and custom OEM manufacturing solutions. Transition is a
manufacturer of connectivity devices used in local area network ("LAN")
applications. At March 31, 1997, ENStar owned 1,025,000 shares of common
stock of CorVel Corporation ("CorVel"), or an approximate 24% interest in
CorVel, a provider of cost containment and managed care services designed to
address the medical costs of workers' compensation. In January 1997, ENStar,
at the direction of North Star, sold 200,000 shares of CorVel for
approximately $5.1 million cash. The proceeds from the sale were distributed
to and retained by North Star. ENStar's investment in CorVel is accounted for
as an unconsolidated subsidiary using the equity method of accounting. The
common stock of CorVel is included on the Nasdaq National Market under the
Symbol CRVL.
<PAGE>
ENStar Inc.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
ENStar was formerly a wholly owned subsidiary of North Star. In
connection with the reorganization involving North Star and Michael Foods (the
"Reorganization Transactions"), North Star transferred to ENStar certain of
its assets, including its shares of common stock of Americable and Transition
and its shares of CorVel, and certain other assets. Pursuant to the
Reorganization Transactions, (i) North Star merged with Michael Foods and (ii)
the outstanding common stock of ENStar (the "ENStar Common Stock") was
distributed to the shareholders of North Star (the "Distribution"). As a
result of the Distribution, ENStar ceased to be a subsidiary of North Star and
became a publicly owned company. ENStar's Common Stock is included on the
Nasdaq National Market under the symbol "ENSR".
As described in Note 2 to the Consolidated Financial Statements of
ENStar, the Consolidated Statements of Operations of ENStar for 1996 include
an allocation of general and administrative costs incurred by North Star prior
to the consummation of the Reorganization Transactions in the management of
the operating companies, investment holding, and other assets of ENStar.
Management believes these allocations are reasonable and present the
operations of ENStar as though it has been operated on a stand-alone basis
prior to the consummation of the Reorganization Transactions.
<PAGE>
ENStar Inc.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The following are unaudited summarized operating results for each of the
Company's continuing operations for the three months ended March 31 (in
thousands):
<TABLE>
<CAPTION>
1997 1996
-------------------------
<S> <C> <C>
Revenues
Americable $ 8,382 $ 12,101
Transition 3,875 3,651
Eliminations (325) (390)
-------------------------
$ 11,932 $ 15,362
=========================
Gross Profit
Americable $ 2,046 $ 2,732
Transition 1,523 1,430
-------------------------
$ 3,569 $ 4,162
=========================
Selling, General and Administrative Expenses
Americable $ 2,754 $ 2,420
Transition 1,716 1,252
Corporate 356 207
-------------------------
$ 4,826 $ 3,879
=========================
Operating Income (Loss)
Americable $ (708) $ 312
Transition (193) 178
Corporate (356) (207)
-------------------------
$ (1,257) $ 283
=========================
</TABLE>
<PAGE>
ENStar Inc.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 vs. THREE MONTHS ENDED MARCH 31, 1996
Consolidated revenues decreased $3.5 million or 22.3%, to $11.9 million
from $15.4 million in 1996.
Revenues at Americable decreased approximately $3.7 million, or 30.7%, to
$8.4 million. This includes approximately $3 million in decreased sales of
networking products to two customers due to reduced demand which is expected
to continue for the remainder of the year. These customers accounted for
approximately $3.9 million of revenues in 1996. In addition, sales of bulk
cable and other connectivity products decreased approximately $950,000,
primarily due to lower demand from contractors and resellers. Offsetting
these decreases was approximately $180,000 of increased internal service
revenues due to expanded focus on service offerings at Enstar Networking
Corporation.
Revenues at Transition increased approximately $224,000, or 6.1%, to
$3.9 million. Sales of basic LAN and terminal products increased
approximately 9% to $3.5 million due primarily to higher demand from new and
existing customers. Sales of Transition's advanced LAN products decreased
approximately 4% to $426,000, which reflects lower demand for certain product
lines released in the fourth quarter of 1996. Sales from new product
introductions and enhancements accounted for approximately 2% of net sales for
the quarter ended March 31, 1997, versus 24% for the comparable period in
1996. Sales to domestic customers increased approximately $340,000, or 15%,
to $2.6 million, which primarily is a result of the addition of new customers.
Sales to international customers were approximately $1.4 million; unchanged
from the previous year. Sales to international customers accounted for
approximately 36% and 38% of net sales for the period ended March 31, 1997
and 1996, respectively.
Consolidated gross profit, as a percent of revenues, increased to 29.9%
in 1997 as compared to 27.1% in 1996. Increased margins at Americable are
primarily attributable to the higher level of internal service revenues.
Margins at Transition were relatively unchanged between periods. ENStar
expects its gross profit margins to decline due to expected competitive
pricing pressures on products sold by both Americable and Transition.
The Company's selling, general and administrative expenses increased
$947,000, or 24.4%, to $4.8 million from $3.9 million in 1996.
Operating expenses at Americable increased approximately $334,000 or
13.8% for the period which reflects approximately $295,000 of increased
selling expenses primarily attributable to higher promotional expenses related
to the introduction of Enstar Networking along with the addition of new sales
personnel and related expenses. In addition, this increase reflects
approximately $80,000 of higher engineering expense due to the addition of
technical and engineering personnel and higher training costs. These increases
were offset by lower general and administrative expenses of approximately
$40,000.
<PAGE>
ENStar Inc.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Americable expects that its selling expenses, as a percentage of
revenues, will increase during the remainder of 1997 through the addition of
sales and technical personnel and their related expenses. These anticipated
increases in operating expenses may result in lower operating profits at
Americable, if the company is unable to increase its sales volume and/or
gross profit margins.
Transition had increased operating expenses of approximately $464,000, or
37.1%, which reflects increased sales and marketing expenses of approximately
$314,000 associated with advertising and promotional activities along with
the addition of new product marketing personnel and related expenses. In
addition, engineering expenses increased approximately $100,000 primarily due
to higher engineering wages and related expenses associated with new product
development. In an effort to successfully develop and launch new products,
Transition anticipates the increased levels of spending on engineering,
marketing and promotional costs to continue throughout 1997. If such
increased level of spending does not result in the timely introduction of
commercially successful products, Transition may experience significantly
reduced levels of sales growth and operating results during the remainder of
1997.
Corporate expenses increased approximately $149,000, or 72%, to $356,000,
which primarily reflects approximately $100,000 of severance related costs
associated with a former executive of Americable. In addition, corporate
expenses reflect higher costs related to the subordinated debenture program.
Net interest expense increased $18,000 or 27% to $84,000 from $66,000 in
1996 due primarily to the higher levels of long-term debt related to the
subordinated debenture program which commenced in November 1996.
The income tax provision (benefit) reflects the Company's estimated
effective annual tax rate. The income tax benefit of $450,000 in 1997 relates
to the elimination of deferred tax liabilities that will reverse as net
operating losses available for carryforward are utilized in future periods.
To the extent loss carryforwards are realized in the future, deferred taxes
will be reinstated.
Equity in earnings of the Company's unconsolidated subsidiary increased
$5,000 to $309,000 from $304,000 in the previous year which reflects higher
earnings at CorVel, offset by ENStar's reduced ownership interest in CorVel
following the January 1997 sale of stock. Further information with respect to
the results of operations of CorVel is contained in the Management's
Discussion and Analysis of Financial Condition and Results of Operations
section on their Form 10-Q and Form 10-K as filed with the Securities and
Exchange Commission.
<PAGE>
ENStar Inc.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
CAPITAL RESOURCES AND LIQUIDITY
ENStar has experienced cash flow deficits from operations and has
experienced fluctuations in its working capital, which are primarily
attributable to the change in receivables and inventories associated with
the fluctuation in sales and timing of payments on accounts payable. Cash
provided by operations was $322,000 for the three months ended March 31, 1997,
versus cash used in operations of $508,000 in 1996.
ENStar does not have the use of cash generated by CorVel and its
subsidiaries. Also, since its initial public offering in 1991, CorVel has
not declared any dividends and has indicated that it does not anticipate
doing so for the foreseeable future. ENStar may from time to time, depending
on market conditions and other factors, sell a portion of its CorVel holdings.
The ability of ENStar to sell its CorVel holdings is limited, however, to
sales pursuant to Rule 144 of the Securities Act and the volume limitations
thereof, and to private negotiated sales, which may adversely affect the
ability of ENStar to sell a large portion of the CorVel holdings at a given
time.
In November 1996, ENStar commenced a program (the "Debenture Program")
whereby it sells subordinated debentures of various maturities primarily to
individual investors. The debentures are offered on a continuous basis at
interest rates that change from time to time depending on market conditions.
Proceeds from long-term debt of approximately $2.2 million represent sales of
debentures under this program. At March 31, 1997, the Company had $3.1
million principal amount of subordinated debentures outstanding with a
weighted average interest rate of 10.4%. Through May 9, 1997, ENStar has sold
an additional $9.5 million of subordinated debentures.
Americable and Transition maintain revolving line of credit facilities
with their principal bank to provide borrowings up to $4 million and
$2 million, respectively, due in June 1998. Borrowings under these facilities
are based on eligible accounts receivable and inventory with interest at prime
(8.5%) with optional fixed rate advances at the London Interbank Offered Rate
("LIBOR") plus 2.5%. At March 31, 1997, there was approximately $1.4 million
of outstanding borrowings and approximately $4.3 million of available
borrowings under these credit facilities. At March 31, 1997, Americable and
Transition were not in compliance with the minimum interest coverage covenant
of this credit agreement. Management is currently in the process of
negotiating an amendment to this agreement and obtaining the necessary waivers
from its bank.
<PAGE>
ENStar Inc.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
CAPITAL RESOURCES AND LIQUIDITY (Continued)
At May 9, 1997, ENStar had approximately $10.8 million of cash and
cash equivalents, excluding cash of its operating subsidiaries. The Company
believes that its available cash and cash equivalents along with the amounts
available under the credit facilities of its operating companies, will be
adequate to meet expected cash requirements, including capital expenditures and
potential acquisitions, for the remainder of the year.
<PAGE>
PART II - OTHER INFORMATION
ENStar Inc. and Subsidiaries
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibit is being filed with this report on
Form 10-Q.
Exhibit 27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended
March 31, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
ENSTAR INC.
--------------------------
(Registrant)
Date May 14, 1997 by /s/ Jeffrey J. Michael
--------------------------- --------------------------
Jeffrey J. Michael
President and Chief Executive Officer
Date May 14, 1997 by /s/ Thomas S. Wargolet
--------------------------- --------------------------
Thomas S. Wargolet
Chief Financial Officer
and Secretary
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,867
<SECURITIES> 0
<RECEIVABLES> 8,401
<ALLOWANCES> (533)
<INVENTORY> 6,546
<CURRENT-ASSETS> 16,547
<PP&E> 3,887
<DEPRECIATION> (2,129)
<TOTAL-ASSETS> 34,222
<CURRENT-LIABILITIES> 11,509
<BONDS> 3,330
<COMMON> 33
0
0
<OTHER-SE> 17,133
<TOTAL-LIABILITY-AND-EQUITY> 34,222
<SALES> 11,932
<TOTAL-REVENUES> 11,932
<CGS> 8,363
<TOTAL-COSTS> 8,363
<OTHER-EXPENSES> 4,796
<LOSS-PROVISION> 30
<INTEREST-EXPENSE> 84
<INCOME-PRETAX> (1,341)
<INCOME-TAX> (450)
<INCOME-CONTINUING> (582)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (582)
<EPS-PRIMARY> (.18)
<EPS-DILUTED> (.18)
</TABLE>
