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 March 31, 1996 Commission File Number 1-3489
CLARY CORPORATION
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(Exact name of registrant as specified in its charter)
California 95-0630196
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(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
Indicate by check whether the registrant (1) has filled all reports required
to be filed by section 13 or 15 (d) of the Security Exchange Act of 1934
during the preceding 12 months (or of 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 April 18,1996 there were 1,807,319 shares of common stock outstanding.
CLARY CORPORATION
Statement of Operations
Three Months Period Ended March 31
Profit and Loss Information
1996 1995
Net Sales and Other Income $1,645,000 $1,754,000
Cost and Expenses
Cost of products sold 1,185,000 1,234,000
Engineering and products develop. 104,000 108,000
Selling and Service 222,000 297,000
General and Administrative 55,000 85,000
Interest expense 45,000 39,000
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1,641,000 1,763,000
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Net earnings (loss) 4,000 (29,000)
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Net (Loss) per common share $ -0- $ (.02)
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Average number of shares 1,807,319 1,807,319
Dividends per share None None
CLARY CORPORATION
CONSOLIDATED BALANCE SHEET
ASSETS March 31,1996 December 31,1995
CURRENT ASSETS
Cash $ 70,000 $ 292,000
Cash Restricted 300,000 300,000
Notes and accounts receivable
less allowance for doubtful
accounts of $20,000 and $13,000
in 1996 and 1995. 734,000 1,157,000
Inventories 2,094,000 2,010,000
Prepaid Assets 52,000 61,000
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Total Current Assets 3,744,000 3,501,000
PROPERTY & EQUIPMENT
Machinery & Equipment 1,328,000 1,326,000
Dies, Jigs and Fixtures 31,000 31,000
Leasehold improvements 60,000 60,000
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1,419,000 1,417,000
Less:
Accumulated Deprecc. and
Amortization 1,279,000 1,266,000
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140,000 151,000
OTHER ASSETS
Miscellaneous 119,000 120,000
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119,000 120,000
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TOTAL ASSETS $ 4,003,00 $ 3,722,000
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LIABILITIES AND STOCKHOLDERS' EQUITY March 31,1996 December 31,1995
CURRENT LIABILITIES
Notes Payable $ 1,050,000 $ 895,000
Accounts Payable and
Accrued Expenses 448,000 421,000
Accrued Payroll and
Related Expenses 133,000 120,000
Customer deposits 63,000 31,000
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Current Liabilities 1,694,000 1,467,000
9.5% Convertible Subordinated Notes due
October 17,2000 600,000 600,000
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 (5,958,000) (5,958,000)
Current year's earnings 4,000 -0-
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Total Equity 1,709,000 1,705,000
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Total Liabilities and
Stockholders' Equity $ 4,003,000 $ 3,772,000
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CLARY CORPORATION
STATEMENT OF CASH FLOWS
For the Three Month Period
Ended March 31
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Operating (Loss) $ 4000 $ ( 29,000)
Adjustments to reconcile net loss
to net cash (used) by operating
activities:
Depreciation and amortization 13,000 12,000
Provision of losses on accounts
receivable. -0- 2,000
Change in assets and liabilities:
(Increase) in cash restricted -0- (2,000)
(Increase)Decrease in Accts. Receivable 418,000 897,000
(Increase) Inventory (84,000) ( 397,000)
(Increase)Decrease Prepaid expenses 5,000 ( 5,000)
Decrease in other assets 1,000 16,000
Increase(decrease) in accounts
payable and accrued Expenses 40,000 ( 5,000)
Increase(decrease) in customer deposit 32,000 3,000
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Net Cash(used) provided by
Operating Activities ( 375,000) (100,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditure ( 2,000) ( 6,000)
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Net Cash (used) by investing activities ( 2,000) ( 6,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings(re-payments)under
line of credits 155,000 ( 114,000)
Principal payments under long-term
debt and capital lease obligations -0- 1,000
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Net cash(used) by investing activities 155,000 (115,000)
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Net(decrease)in cash and cash equivalent ( 222,000) ( 221,000)
Cash and cash equivalents at beginning
of period 292,000 332,000
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Cash and cash equivalents at end
of period $ 70,000 $ 111,000
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Management Discussion and Analysis
Result of Operation
Sales and other income for the first quarter 1996 decreased $89,000 or 5.1%
over the first quarter of 1995.Cost of sales decreased $49,000 or 4.0% over
the period. This cost decrease is due to the decrease in sales. The major
change in operating expenses over the two periods is $75,000 or 25.5% reduction
of selling and administrative expense. The reduction is due to several factors
including reduced commission on reduced sales, downsizing and reduced
advertising on the company's older line of products.The
of products in the third quarter of 1996
Liquidity and Capital Requirements
The registrant believes funds provided from operations, short-term lines of
credit will be sufficient to funds its immediate needs for working capital.
Capital expenditures over the foreseeable future will be minimal and funded
form 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.
CLARY CORPORATION
NOTES OF PART I OF THIS REPORT
NOTE 1: As of March 31,1996, the registrant has 12,688 shares of common stock
reserved for conversion of preferred stock and 600,000 shares reserved
for the conversion of 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 purchases by
officers and 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 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
Item 1 Legal Proceedings- Refer to registrant's Annual Report to
Share-holders and Form 10K filed with the Securities and
Exchange Commission on March 29,1996 and April 9,1996
respectively.
Item 2 Changes in Securities - Inapplicable
Item 3 Defaults Upon Senior Securities - Inapplicable
Item 4 Submission of Matters to Vote of Security Holders-Inapplicable
Item 5 Other Information - Inapplicable
Item 6 Exhibits and Reports on Form 8k - None
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: April 25,1996
D. G. Ash
Chief Financial Officer
Date:April 25,1996
John P. Clary
Assistant Secretary
