UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended March 31,2000
Commission file Number 1-3489
CLARY CORPORATION
- ----------------------------------------------------------------------------
(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
incororation or organization) Identification No.
1960 So. Walker Avenue Monrovia, California 91016
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (626) 359-4486
N/A
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Former name, former address and former fiscal year, if changed since last
report.
Name of each exchange on which registered: Pacific Exchange
Indicated by check 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
----- -----
As of April 20, 2000, there were 1,807,419 shares of common stock outstanding.
Transitional Small Business Disclosure Format
Yes X No
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<PAGE>
PART 1
ITEM #1 - FORM 10-QSB
CLARY CORPORATION
(Statement of Operations)
<TABLE>
<CAPTION>
PROFIT AND LOSS INFORMATION Three Months Period Ended March 31,
2000 1999
- ----------------------------------- ---------------------------------
<S> <C> <C>
Sales and other revenue $ 1,417,000 $ 2,025,000
Cost and Expenses:
Cost of products sold 973,000 1,247,000
Engineering and Product Development 121,000 109,000
Selling and Service 193,000 349,000
General and Administrative 80,000 82,000
Interest Expense 36,000 48,000
--------- ----------
1,403,000 1,835,000
--------- ---------
Net Earnings 14,000 190.000
=========== ===========
Earnings per common share $ .01 $ .11
=========== ===========
Average number of shares 1,807,419 1,807,419
Dividends per share None None
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
CLARY CORPORATION
CONSOLIDATED BALANCE SHEETS
-----------------------------
ASSETS March 31,200 Dec. 31, 1999
- ---------------------------------- -------------- -------------
<S> <C> <C>
CURRENT ASSETS
- --------------
<S>
Cash $ 159,000 $ 284,000
Notes and accounts receivable less
allowance for doubtful amounts
of $26,000 in 2000 and $24,000 in
1999. 860,000 587,000
Inventories, principally finished
goods and work-in-process 2,025,000 1,783,000
Prepaid expenses and other assets 58,000 57,000
--------- ---------
Total Current Assets $ 3,102,000 $ 2,711,000
PROPERTY, PLANT AND EQUIPMENT
- -----------------------------
Machinery and equipment 1,447,000 1,428,000
Less: Accumulated Depreciation
and Amortization 1,305,000 1,298,000
--------- ---------
142,000 130,000
OTHER ASSETS
- ------------
Miscellaneous 13,000 12,000
--------- ---------
TOTAL ASSETS $ 3,257,000 $ 2,853,000
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<PAGE>
PART I
ITEM #1 - FORM 10-QSB
CLARY CORPORATION
CONSOLIDATED BALANCE SHEETS (Continued)
---------------------------------------
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY March 31,2000 Dec. 31, 1999
- ------------------------------------ -------------- -------------
<S> <C> <C>
CURRENT LIABILITIES
- -------------------
Notes Payable $ 850,000 $ 815,000
Accounts Payable and Accrued Expenses 848,000 473,000
Accrued Payroll and Related Expenses 67,000 77,000
Customer Deposits 15,000 25,000
----------- ------------
Total Current Liabilities $ 1,780,000 $ 1,390,000
9-1/2% Convertible Subordinated Notes
due October 17, 2000 600,000 600,000
STOCKHOLDERS' EQUITY
- --------------------
Cumulative convertible Series "A" preferred
stock, 5.50%, par value $5 per share;
authorized and outstanding, 11,033 in 2000
and 1999 55,000 55,000
Cumulative convertible Series "B" preferred
stock, 7% par value $5 per share;
authorized 988,967 shares, issued and
outstanding, 55,000 shares in 2000 and 1999 550,000 550,000
Common stock, par value $1 per share,
authorized 10,000,000 shares; issued and
outstanding, 1,807,419 in 2000 and 1999 2,509,000 2,509,000
Additional paid-in capital 5,099,000 5,099,000
Accumulated deficit ( 7,350,000) ( 7,350,000)
Current years' earnings 14,000 -0-
----------- ------------
Total Equity 877,000 863,000
----------- ------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 3,257,000 $ 2,853,000
============ ============
</TABLE>
<PAGE>
CLARY CORPORATION
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION> For the three-month Period Ended
--------------------------------
March,31
-------------
2000 1999
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
- ------------------------------------
Net earnings $ 14,000 $ 190,000
Adjustments to reconcile net earnings
to net cash (used for) Operating Activities:
Depreciation and Amortization 7,000 2,000
Provision for losses on accts. receivable. 2,000 10,000
Change in assets and liabilities:
(Increase) in accounts receivable (275,000) (998,000)
(Increase) decrease in inventory (242,000) 124,000
(Increase) in prepaid expenses ( 1,000) ( 2,000)
(Increase) in other assets ( 1,000) ( 18,000)
Increase in accounts payable
and accrued expenses 365,000 511,000
(Decrease) in customer deposits ( 10,000) ( 11,000)
----------- ----------
Net cash (used for) operating Activities: (141,000) (192,000)
Cash Flows from Investing Activities:
- ------------------------------------
Capital expenditures (19,000) ( 15,000)
------------ ----------
Net Cash (used for) Investing Activities (19,000) ( 15,000)
Cash Flows from Financing Activities:
- ------------------------------------
Net borrowings under line-of-credit 35,000 200,000
------------ -----------
Net Cash provided by financing activities 35,000 200,000
Net (Decrease) Increase in cash and cash
equivalents (125,000) ( 7,000)
Cash and cash equivalents at beginning of year 284,000 160,000
---------- ----------
Cash and cash equivalents at end of quarter $ 159,000 $ 153,000
========== ===========
</TABLE>
<PAGE>
PART I
ITEM #2 - FORM 10-QSB
MANAGEMENT DISCUSSION AND ANALYSIS
- ----------------------------------
Results of Operation
- --------------------
Sales and other revenues for the first quarter of 2000 decreased
$608,000 or 30.0% from the first quarter of 1999. This decrease was due
primarily from the delivery of one large order to Celera Genomics Corporation
in the first quarter of 1999. Also during the first two month of 2000 supplier
delays on certain critical electronic components had a negative effect on
production. At our current procurement levels, it is a challenge to reduce
or eliminate these delivery and quality problems.
Cost of sales decreased $274,000 or 22.% over the two periods. This cost
decrease was due primarily to the sales decrease but was partially offset due to
to additional production cost associated with supplier delays mentioned above.
Selling and administrative decreased $158,000 or 36.7% primarily due to less
sales commission on the reduced sales. Engineering and development increased
$12,000 or 11.0%. This increase is not significant. Interest cost decreased
$12,000 due to conversion of $550,000 of long term debt to a new Convertible
Class "B" preferred stock.
Net earnings decrease was due to the factors mentioned above. Registrant
believes net earnings will improve over the next three quarters.
Liquidity and Capital Requirements
- ----------------------------------
The registrant believes funds provided from operations,short-term lines of
credit and short as well as long-term financing through an Affiliate Company
will be sufficient to fund its immediate needs for working capital. Capital
expenditures, if any, will be minimal and funded from working capital or placed
on short-term leases.
The registrant's short term secured borrowing with the bank is subject to
renewal May 1,2000.
<PAGE>
PART I
ITEM #3 - FORM 10-QSB
CLARY CORPORATION
-----------------
NOTES TO PART I OF THIS REPORT
------------------------------
NOTE 1. As of March 31,2000 the Registrant has 12,688 shares of
common stock reserved for conversion of the Class "A" preferred stock,
440,000 shares of common stock reserved for the conversion of the Class "B"
preferred stock and 600,000 shares reserved for tha conversion of the 9-1/2%
convertible subordinated notes. In addition, the Registrant has reserved
100,000 shares of common stock for purchase by officers and key employees under
its 1996 Employee Incentive Stock Option Plan. Also, the Company has 40,000
shares of common stock for purchase by its former President under a non-quali-
fied 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.
<PAGE>
FORM 10-QSB
CLARY CORPORATION
PART II
OTHER INFORMATION
-----------------
Item 1 Legal Proceedings - None of any significance
Item 2 Change 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
<PAGE>
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)
<TABLE>
<CAPTION>
Date: April 27,2000
SIGNATURE TITLE
========= =====
<S> <C>
/s/ John G. Clary President, Chairman of the Board and
- ----------------- Chief Executive Officer
John G. Clary
/s/ Donald G. Ash Treasurer and Chief Financial Officer,
- -----------------
Donald G. Ash
<PAGE>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-01-2000
<PERIOD-END> Mar-31-2000
<CASH> 159
<SECURITIES> 0
<RECEIVABLES> 886
<ALLOWANCES> 26
<INVENTORY> 2025
<CURRENT-ASSETS> 3102
<PP&E> 1447
<DEPRECIATION> 1305
<TOTAL-ASSETS> 3257
<CURRENT-LIABILITIES> 1780
<BONDS> 600
<COMMON> 2509
0
605
<OTHER-SE> (2237)
<TOTAL-LIABILITY-AND-EQUITY> 3257
<SALES> 1417
<TOTAL-REVENUES> 1417
<CGS> 973
<TOTAL-COSTS> 973
<OTHER-EXPENSES> 394
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 36
<INCOME-PRETAX> 14
<INCOME-TAX> 0
<INCOME-CONTINUING> 14
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
