FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 1995 Commission File Number 1-3489
CLARY CORPORATION
------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-0630196
--------------------------------------------------------------------------
(State or other Jurisdiction of (I.R.S. Employer I.D)
incorporation or organization)
1960 S. Walker Avenue Monrovia, California 91016
Registrant's telephone number, including area code (818)359-4486
Indicated by check whether the registrant (1) has filled 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___
As of October 27, 1995 there were 1,807,319 shares of common stock outstanding.
Form 10-QSB
CLARY CORPORATION
Statement of Operations
Three Months Period Ended September30
Profit and Loss Information
1995 1994
Net Sales and Other Income $1,667,000 $1,969,000
Cost and Expenses
Cost of products sold 1,219,000 1,430,000
Engineering and product development 93,000 91,000
Selling and Service 245,000 333,000
General and Administrative 73,000 92,000
Interest expense 40,000 35,000
---------- ---------
1,670,000 1,981,000
---------- ---------
(Loss) before income taxes ( 3,000) ( 12,000)
Income tax expense -0- 1,000
---------- ---------
Net (Loss) $( 3,000) $( 13,000)
=========== ==========
(Loss) per common Share:
Net (Loss) per common share $ -0- $( .01)
=========== =========
Average number of shares 1,807,319 1,807,319
Dividends per share None None
Form 10-QSB
CLARY CORPORATION
Statement of Operations
Nine Months Period Ended September30
1995 1994
Profit and Loss Information
Net Sales and Other Income $4,901,000 $5,926,000
Cost and Expenses
Cost of products sold 3,490,000 4,487,000
Engineering and product develop. 301,000 285,000
Selling and Service 798,000 914,000
General and Administrative 229,000 249,000
Interest expense 118,000 99,000
----------- ---------
4,936,000 6,034,000
------------ -----------
(Loss) before income taxes ( 35,000) ( 108,000)
Income tax expenses 1,000 1,000
------------ ------------
Net (Loss) $( 36,000) $( 109,000)
============ =============
(Loss) per common Share:
Net (Loss) per common share $ (.02) $ (.06)
============== ============
Average number of shares 1,807,319 1,807,319
Dividends per share None None
Form 10-QSB
CLARY CORPORATION
CONSOLIDATED BALANCE SHEET
ASSETS September 30,1995 December31,1994
CURRENT ASSETS
Cash 112,000 332,000
Cash Restricted 300,000 300,000
Notes and accounts receivable
less allowance for doubtful
accounts of $20,000 and $15,000
in 1994. 1,093,000 1,157,000
Inventories 2,274,000 1,838,000
Prepaid Assets 48,000 66,000
---------- ------------
Total Current Assets 3,827,000 3,693,000
PROPERTY & EQUIPMENT
Machinery & Equipment 1,317,000 1,309,000
Dies, Jigs and Fixtures 31,000 31,000
Leasehold improvements 60,000 60,000
----------- -----------
1,408,000 1,400,000
Less:
Accumulated Deprecciation and
Amortization 1,254,000 1,218,000
------------- ------------
154,000 182,000
OTHER ASSETS
Long-Term Notes Receivable -0- 33,000
Miscellaneous 114,000 113,000
------------- ------------
114,000 146,000
-------------- ------------
TOTAL ASSETS $ 4,095,000 $ 4,021,000
============= ============
Form 10-QSB
CLARY CORPORATION
CONSOLIDATED BALANCE SHEET(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY Sep. 30,1995 Dec.31,1994
CURRENT LIABILITIES
Notes Payable $ 1,097,000 $1,100,000
Current portion of Long-Term Debt 290,000 292,000
Accounts Payable and
Accrued Expenses 734,000 574,000
Accrued Payroll and
Related Expenses 79,000 114,000
Customer Deposits 33,000 43,000
----------- ----------
Current Liabilities 2,233,000 2,123,000
STOCKHOLDER'S EQUITY
Cumulated convertible
Preferred Stock 55,000 55,000
Common Stock and additional stated
value arising from conversion of
preferred stock 2,509,000 2,509,000
Additional paid-in capital 5,099,000 5,099,000
Beginning year accumulated deficit (5,765,000) (5,765,000)
Current year's income ( 36,000) -0-
------------- -----------
Total Equity 1,862,000 1,898,000
------------- -----------
Total Liabilities and
Stockholders' Equity $ 4,095,000 $ 4,021,000
============= ============
Form 10-QSB
CLARY CORPORATION
STATEMENT OF CASH FLOWS
For the Nine Month Period ended
September 30,
1995 1994
Cash flows from operating activities: $ (36,000) $(109,000)
Operating (loss)
Adjustments to reconcile net loss to net cash
(used) by operating activities:
Deprecciation and amortization 36,000 35,000
Provision for losses on accounts receivable 5,000 3,000
Change in assets and liabilities:
(Increase)in Cash restricted -0- ( 6,000)
Decrease in accounts receivable 59,000 383,000
(increase)decrease in inventory (436,000) 209,000
Decrease(increase) in prepaid expenses 18,000 ( 64,000)
Decrease in other assets 32,000 98,000
Increase(decrease) in accounts payable
and accrued expenses 125,000 (688,000)
(decrease)increase in customer deposits ( 10,000) 68,000
---------- ---------
Net cash(used)provided by operating
activities: ( 207,000) ( 71,000)
Cash flows from investing activities:
Capital expenditures ( 8,000) ( 53,000)
----------- ---------
Net cash(used) by investing activities ( 8,000) ( 53,000)
Cash flows from financing activities:
Net bowrrowings(re-payments)under line-of-credit ( 3,000) - 0-
Principal payments under long-term debt and
capital lease obligations ( 2,000) ( 2,000)
------------ ---------
Net cash(used) by financing activities ( 5,000) ( 2,000)
Net (decrease) in cash and cash equivalents ( 220,000) ( 126,000)
Cash and cash equivalents at beginning of period 332,000 178,000
------------ ----------
Cash and cash equivalents at end of period $ 112,000 $ 52,000
============ ==========
Form 10-QSB
Management Discussion and Analysis
Result of Operation
Sales and other income for the third quarter 1995 decreased $302,000 or 15.3%
from the third quarter of 1994. The decrease in sales is due to phasing
out an obsolete line of products and introduction to a new line.
The switchover has had some delays in deliveries as well as other problems
usually associated with this major conversion. Also several larger sales
programs have been delayed for reasons beyond the Registrant's control.
Hopefully, these delays will be worked out during the fourth quarter of 1995.
Cost of sales decreased $211,000 or 14.8% in the quarter of 1995 as compared
to the quarter in 1994. This decrease was due primarily by the decreased sales
but was partially credited to the increased margins on the new products sold
as well as a reduction in overhead of the manufacturing departments. Enginee-
ring and product development increased $2,000.00. Selling and administrative
decreased $107,000.00 or 25.2% over comparable quarters. This decrease was due
to reduced commission on sales decrease as well as staff reductions since last
year. Interest expenses increased $5,000.00 in 1995 over the second quarter in
1994. The loss before taxes in 1995 was reduced to $3,000.00 from $36,000.00
in 1994 primarily due to increased product margin, reduced commission on the
sales decreased and staff reductions.
Liquidity and Capital Requirements
The Registrant believes funds provided from operations, short-term lines of
credit and funds obtained through the sales of its Construction Automation
Division will be sufficient to funds its immediate needs for working capital.
Capital expenditures over the foreseeable future will be minimal and funded
from working capital or placed on short term leases.
Over the past year, the Registrant believes inflation has not had a material
adverse effect on its revenues and earnings. However,the currency fluctuations
between the strength of the Japanese yen against the U.S. dollar has had a
substantially negative effect on profit margins over the periods being repor-
ted.
Form 10-QSB
CLARY CORPORATION
NOTES OF PART I OF THIS REPORT
NOTE 1: As of September 30,1995, the Registrant has 12,688 shares of common
stock reserved for conversion of preferred stock and 145,000 shares
reserved for the conversion of the 9% convertible subordinated notes.
In addition, the Registrant has reserved 15,000 shares of common stock
for purchase by directors, officers or employees under a non-qualified
stock option plan plus and an additional 59,000 shares reserved for
purchase by officers and key employees under its Employee incentive
Stock option plan.
NOTE 2: This report reflects all adjustments which are, in the opinion of
management, necessary to present a fair statement of the results for
the interim period. The report has not been reviewed by our independent
public accountants and is, therefore, unaudited.
CLARY CORPORATION
PART II
OTHER INFORMATION
<TABLE> <S> <C>
Item 1 Share-holders filed with the Securities and Exchange
Commission on March 29,1995
Item 2 Changes in Securities - Inapplicable
Item 3 Defaults Upon Senior Securities - Inapplicable
Item 4 Submission of Matters to a Vote of Security Holders-Inapplicable
Item 5 Other Information - Inapplicable
Item 6 Exhibits and Reports on Form 8k - None
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLARY CORPORATION
(Registrant)
Date:October 27,1995 Donald G. Ash
President and Chief Financial Officer
Date:October 27,1995 John J. Guerin
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 412,000
<SECURITIES> 0
<RECEIVABLES> 1093,000
<ALLOWANCES> 20,000
<INVENTORY> 2,274,000
<CURRENT-ASSETS> 3,827,000
<PP&E> 1,408,000
<DEPRECIATION> 1,254,000
<TOTAL-ASSETS> 4,095,000
<CURRENT-LIABILITIES> 2,233,000
<BONDS> 0
<COMMON> 1,807,000
0
55,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,095,000
<SALES> 4,901,000
<TOTAL-REVENUES> 4,901,000
<CGS> 3,490,000
<TOTAL-COSTS> 3,490,000
<OTHER-EXPENSES> 1,328,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 118,000
<INCOME-PRETAX> (35,000)
<INCOME-TAX> 1000
<INCOME-CONTINUING> (36,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,000)
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
