SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995, Commission file number
0-4939
ELECTRIC M & R INC
(Name of small business issuer in its charter)
Delaware 25-1197808
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
2025 Milford Drive, Bethel Park,
Allegheny County, Pennsylvania 15102
(address of principal executive offices)
Issuer's Telephone Number: 412-831-6101
Securities registered under section 12 (b) of the Exchange Act:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
Common Stock, $1.00 Par Value
(Title Of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act of 1934 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 requirement for the past
90 days.
Yes_____X_____ No___________
Registrant has one class of common stock as of September 30, 1995, the
close of the period covered by the report; 734,787 shares were
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
PART I - Financial Information Pages - 1-7
PART II - Other Information Pages - 8-11
<PAGE>
ELECTRIC M & R INC.
TABLE OF CONTENTS
SEPTEMBER 30, 1995
UNAUDITED
Part I - Financial Information
Balance Sheet -September 30, 1995 and December 31, 1994.
Statement of Operations -For the three months ended September 30,
1995 and 1994.
For the nine months ended September 30,
1995 and 1994.
Statement of Cash Flows -For the three months ended September 30,
1995 and 1994.
For the nine months ended September 30,
1995 and 1994.
Notes to Financial Statements
Management's Discussion and Analysis
Part II - Other Information
Item 1 - Legal Proceedings
Item 2 - Not Applicable
Item 3 - Not Applicable
Item 4 - Not Applicable
Item 5 - Not Applicable
Item 6 - Exhibits and Report of Form 8-K
<PAGE>
Part 1, Item l
ELECTRIC M & R INC.
BALANCE SHEET
Unaudited
ASSETS SEPT. 30, 1995 DEC. 31, 1994
Current Assets
Cash and Cash Equivalents $9,264 $7,463
Accounts Receivable-Net Allowance
for Doubtful Accounts of $9,000 225,032 434,001
Inventories-See Number 2 835,596 867,690
Note Receivable-Current 3,671 53,320
Other Current Assets 25,346 43,736
$1,098,909 $1,406,210
Property, Plant and Equipment
Land 22,484 22,484
Buildings 787,935 786,051
Machinery and Equipment 1,405,132 1,367,939
Furniture and Fixtures 190,927 188,848
$2,406,478 $2,365,322
Less: Accumulated Depreciation (2,056,196) (2,013,209)
350,282 352,113
Other Assets
Mortgages Receivable -0- -0-
Assets Held For Resale 837,721 915,338
837,721 915,338
$2,286,912 $2,673,661
LIABILITIES & SHAREHOLDERS' EQUITY
Current Portion of Long Term Debt $20,950 $20,950
Notes Payable-Related Parties 1,255,788 1,281,104
Accounts Payable 214,609 425,738
Accrued Expenses:
Salaries, Wages, Vacations & Taxes 27,151 15,745
Interest-Related Parties 1,154,405 1,174,074
Other:
Land Deposits -0- -0-
Income Tax Payable -0- -0-
$2,672,903 $2,917,611
Long Term Debt 34,090 26,649
SHAREHOLDERS' EQUITY (DEFICIT)
Common Stock, $1.00 Par Value;
2,000,000 Shares Authorized;
734,783 Shares Issued & Outstanding 734,787 734,787
Additional Paid in Capital 1,486,440 1,486,440
Accumulated Deficit (2,641,308) (2,491,826)
(420,081) (270,599)
$2,286,912 $2,673,661
<PAGE>
Part 1, Item 2
ELECTRIC M & R INC.
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 & 1994
UNAUDITED
PROFIT AND LOSS INFORMATION FOR THE 3 MONTHS ENDED SEPTEMBER 30,
1995 1994
REVENUES
Net Sales-Manufacturing $668,288 $883,889
Other Income (13,949) 31,481
$654,339 $915,370
COST AND EXPENSES
Cost of Products Sold Manufacturing $505,560 $713,668
Cost of Real Estate Sold 1,260 -0-
Selling, General and Administrative 117,059 112,095
Interest Expense 33,852 25,078
Total Cost and Expenses $657,731 $850,841
PROVISION FOR INCOME TAX
Income Tax $-0- $-0-
$-0- $-0-
NET INCOME (LOSS) $(3,392) $64,529
NET INCOME PER SHARE OF COMMON STOCK
(Based on 734,787 and 734,787 shares of common
stock outstanding) $(.00) $.09
PROFIT PER SHARE OF COMMON STOCK
Per Share data for the three months ended September 30, 1995 and 1994, are
based upon the weighted average number of shares which were 734,787 and
734,787, respectively.
<PAGE>
Part 1, Item 2 ELECTRIC M & R INC.
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 & 1994
UNAUDITED
PROFIT AND LOSS INFORMATION FOR THE 9 MONTHS ENDED SEPTEMBER 30,
1995 1994
REVENUES
Net Sales-Manufacturing $1,994,674 $2,780,359
Other Income (3,632) 81,319
$1,991,042 $2,861,678
COST AND EXPENSES
Cost of Products Sold Manufacturing $1,672,019 $2,247,438
Cost of Real Estate Sold 5,040 -0-
Selling, General and Administrative 361,653 372,835
Interest Expense 101,816 72,314
Total Cost and Expenses $2,140,528 $2,692,587
PROVISION FOR INCOME TAX
INCOME TAX $-0- $-0-
$-0- $-0-
NET INCOME(LOSS) $(149,486) $169,091
NET INCOME PER SHARE OF COMMON STOCK
(Based on 734,787 and 734,787 shares of common
stock outstanding) $(.20) $.23
PROFIT PER SHARE OF COMMON STOCK
Per Share data for the nine months ended September 30, 1995 and 1994 are
based upon the weighted average number of shares which were 734,787 and
734,787 respectively.
<PAGE>
Part 1, Item 3 ELECTRIC M & R INC.
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH
UNAUDITED
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $700,860 $832,839
Cash Paid to Suppliers and Employees (550,162) (757,146)
Interest Received -0- -0-
Interest Paid (59,622) (11,078)
Income Tax -0- (4,367)
Net Cash Provided by Operating
Activities $91,076 $60,248
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Sale of Real Estate $2,000 $-0-
Payments for Capital Expenditures (27,588) (6,401)
Net Cash Used By Investing Activities $(25,588) $(6,401)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Additional Borrowings $23,000 $-0-
Principal Payments on Notes Payable (85,025) (20,000)
Net Cash Provided (Used) by
Financing Activities $(62,025) $(20,000)
Net Increase (Decrease) in Cash and
Cash Equivalents $3,463 $33,847
Cash and Cash Equivalents at Beginning
of Period 5,801 (4,241)
CASH AND CASH EQUIVALENTS AT END OF PERIOD $9,264 $29,606
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
Net Income $(3,392) $64,530
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
(Increase) Decrease in:
Accounts Receivable 11,872 (82,531)
Notes Receivable 34,649 -0-
Other Current Assets (64,708) (10,405)
Increase (Decrease) in:
Accounts Payable 111,273 71,745
Accrued Expenses (15,726) 4,741
Depreciation Expenses 17,108 12,168
Loss on Sale of Real Estate -0- -0-
Net Cash Provided (Used) by Operating
Activities $91,076 $60,248
<PAGE>
Part 1, Item 3 ELECTRIC M & R INC.
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH
UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $2,252,473 $2,679,238
Cash Paid to Suppliers and Employees (2,144,964) (2,573,913)
Interest Received -0- -0-
Interest Paid (121,485) (15,619)
Income Tax -0- (56,939)
Net Cash Provided by Operating
Activities $(13,976) $32,767
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Sale of Real Estate $71,764 -0-
Payments for Capital Expenditures (41,156) (99,147)
Net Cash Used by Investing Activities $30,608 $(99,147)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Additional Borrowings $143,000 $57,000
Principal Payments on Notes Payable (157,831) -0-
Net Cash Provided (Used) by
Financing Activities $(14,831) $57,000
Net Increase (Decrease) in Cash and
Cash Equivalents $1,801 $(9,380)
Cash and Cash Equivalents at
Beginning of Period $7,463 $38,986
CASH AND CASH EQUIVALENTS AT END OF PERIOD $9,264 $29,606
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
Net Income $(149,486) $169,092
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
(Increase) Decrease in:
Accounts Receivable 208,969 (182,440)
Notes Receivable 49,649 -0-
Other Current Assets 50,484 (5,229)
Increase (Decrease) in:
Accounts Payable (211,129) 28,895
Accrued Expenses (8,263) (14,056)
Depreciation Expenses 42,987 36,505
Loss on Sale of Real Estate 2,813 -0-
Net Cash Provided (Used) by Operating
Activities $(13,976) $32,767
Part 1, Item 4
ELECTRIC M & R INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents-The Company considers all highly liquid
debt instruments purchased with a maturity of three months or less to
be cash equivalents.
Inventories - Inventories are stated at the lower of cost
(first-in, first-out method) or market.
Property, Plant and Equipment - The cost of the assets is
depreciated using the straight-line and accelerated methods over
their estimated useful lives for financial statements and tax
return purposes.
2. INVENTORIES
Inventories consist of the following for 1995 and 1994:
Raw Materials $447,943 $471,519
Work in Progress 154,262 197,443
Finished Goods 233,391 198,728
$835,596 $867,690
3. NOTES PAYABLE
Demand notes payable to related parties in the amounts of $1,255,788
and $1,281,104 at Sept.30, 1995 and December 31, 1994, respectively,
consist of amounts due officer-shareholders of the Company, and
entities under their control. These notes and amounts bear interest
at prime (8.5% at December 31, 1994) plus 1% with the exception of a
$60,000 note payable to an officer-shareholder at 10%, and a $20,000
notes payable to an officer-shareholder at 8%. Accrued interest on
these notes was $1,154,405 and $1,174,074 at Sept.30, 1995 and
December 31, 1994 respectively.
4. RELATED PARTY TRANSACTIONS
During 1994 and 1993 the Company charged an affiliated Company owned
by an officer approximately $9,800 and $9,300 respectively, for
administrative and management services. These amounts are included in
other income.
In addition, interest expense for the periods ended Sept.30, 1995 and
December 31, 1994, pertaining to notes payable to related parties,
amounted to approximately $80,000 and $104,000, respectively.
<PAGE>
Part 1, Item 4
ELECTRIC M & R INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
5. ASSETS HELD FOR SALE
The Company owns land in Puerto Rico that is being actively offered
for sale. This land is recorded at the Company's cost, $577,821 and
$582,861 at Sept.30, 1995 and December 31, 1994, respectively, which
is estimated to be less than net realizable value.
6. INCOME TAXES
Significant components of income tax expense from continuing
operations consist of the following at September 30, 1995:
Current - State ($3,651)
For Federal income tax reporting purpose, the Company has available
approximately $2,407,000 of net operating loss carry forwards as of
December 31, 1994. If unused, these will expire in varying amounts
beginning in 1997 through 2006.
7. LITIGATION
On June 21, 1990, the Company was awarded damages of $1,009,000 from
a former employee of the Company and his related entities. The
judgement was the result of a long-standing suit by the Company
against the former employee and his related entities. The
Company is currently involved in several related lawsuits in order to
collect the judgement. In 1992, the Company received $171,000 as
settlement in a lawsuit with a financial institution related to the
lawsuit against the former employee. The net proceeds were used to
reduce a receivable in the amount of $44,016 with the remaining
$126,984 recorded as income in 1992. The Company used the proceeds
to purchase three first mortgages from the financial institution
secured by three rental properties. The mortgagee of each of these
properties was the former employee. The mortgagee defaulted payments
on all the mortgages. The Company took possession of these
properties during 1994. The properties are being carried at their
net realizable value as an asset held for sale.
8. COMMON STOCK
Common stock has a stated value of $l per share. There are
2,000,000 shares authorized, and 734,787 shares issued and
outstanding at September 30, 1995 and December 31, 1994.
<PAGE>
Part 1, Item 5
ELECTRIC M & R INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
MANAGEMENT'S DISCUSSION AND ANALYSIS
Revenues for the nine months ended September 30, 1995 were $1,991,042
compared to $2,861,678 for the same period in 1994. This represents a
decrease in Revenues of ($870,636).
Selling, general and administrative expenses for the quarter ended
Sept.30, 1995 increased by approximately $4,964 from the previous
year. Gross margin was comparable. This resulted in net income of
($149,486) for the nine months ended September 30, 1995, compared to
$169,091 for the 1994 period.
This is a decrease of $318,577.
Management expects operating results of the Company will continue to
improve during 1995, principally through increased sales volume.
At Sept.30, 1995, the Company had negative working capital of
approximately ($1,574,000). This is caused principally by amounts
owed to related parties in excess of $2.4 million. The related parties
continue to provide favorable financial assistance to the company.
<PAGE>
ELECTRIC M & R INC.
OTHER INFORMATION
FOR THE PERIODS ENDED SEPT.30, 1995 AND DECEMBER 31, 1994
LEGAL PROCEEDINGS
There have been no significant changes in the Company's legal
proceedings during the nine months ended September 30, 1995.
EXHIBITS AND REPORT OF FORM 8-K
No event occurred that required the registrant to file form 8-K during
the nine months ended September 30, 1995.
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.
Electric M & R Inc.
Registrant
DATE
GRETCHEN OSWALD
PRESIDENT
DATE
CHARLES R. BERKEYBILE
TREASURER
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<ALLOWANCES> (9,000)
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