UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] 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 0-9255
DENCOR ENERGY COST CONTROLS, INC.
(Exact name of small business issuer specified in its charter)
Colorado 84-0658020
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1450 West Evans, Denver, Colorado 80223
(Address of principal executive office) (Zip Code)
(303) 922-1888
(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. No par value per share:
3,671,304 shares outstanding at July 19, 1996.
Transitional Small Business Disclosure Format
Yes No X
DENCOR ENERGY COST CONTROLS, INC.
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
(Condensed Balance Sheets)
ASSETS June 30 Dec. 31
1996 1995
(unaudited)
CURRENT ASSETS:
Cash $ 4,000 $ 3,800
Accounts Receivable,net of allowance for doubtful
accounts of $9,200 67,700 77,000
Inventories 169,000 174,200
Other 16,900 8,300
TOTAL CURRENT ASSETS 257,600 263,300
Furniture & Equipment 213,300 213,300
Less Accumulated Depreciation (209,400) (207,400)
3,900 5,900
Other Receivables, net of allowance for doubtful
receivables of $1,700 6,800 6,600
$268,300 $275,800
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable - Shareholders $ 93,400 $ 93,400
Accounts Payable 58,000 52,800
Accrued Compensation and Benefits 20,500 22,700
Accrued Interest - Shareholders 42,600 33,600
Warranty Reserve 6,300 6,300
Other 900 3,900
TOTAL CURRENT LIABILITIES 221,700 212,700
STOCKHOLDERS' EQUITY
Common Stock, no par value, authorized 5,000,000
shares; issued & outstanding, 3,671,304 shares 1,147,600 1,147,600
Deficit (1,101,000) (1,084,500)
Stockholders' Equity 46,600 63,100
$ 268,300 $ 275,800
See notes to condensed financial statements
DENCOR ENERGY COST CONTROLS, INC.
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Six Months
Ended June 30 Ended June 30
1996 1995 1996 1995
REVENUES:
Net Sales $ 96,200 $ 179,100 $ 199,900 $ 285,800
Interest and Other 2,000 1,600 3,900 3,400
TOTAL REVENUES 98,200 180,700 203,800 289,200
COSTS AND EXPENSES;
Cost of Products Sold 52,300 100,600 111,100 154,300
Selling 4,800 4,300 9,200 9,900
General and Administrative 25,200 34,500 56,000 65,100
Research and Development 15,900 19,700 34,800 36,500
Provision for doubtful accounts receivable
Interest 4,800 4,200 9,200 8,900
103,000 163,300 220,300 274,700
NET EARNINGS (LOSS) $ (4,800) $ 17,400 $(16,500) $ 14,500
NET EARNINGS (LOSS) PER
COMMON SHARE:
Net Earnings (loss) $ (.0014) $ .0048 $ (.0045) $ .0040
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 3,671,304 3,671,304 3,671,304 3,671,304
See notes to condensed financial statements
DENCOR ENERGY COST CONTROLS, INC.
STATEMENT OF CASH FLOWS
(unaudited)
Six Months Ended June 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ (16,500) $ 14,500
Adjustments to reconcile net earnings
to net cash used in operating activities:
Depreciation 2,000 2,700
Provision for (recovery of) losses
on doubtful accounts receivable
Changes in operating assets and liabilities:
Accounts and other receivables 9,100 (26,400)
Inventories 5,200 (26,500)
Other assets (8,600) (8,200)
Accounts payable 5,200 25,100
Accrued compensation and benefits (2,200) 1,900
Accrued interest - shareholders 9,000 8,300
Warranty reserve 300
Other liabilities (3,000) (600)
Total adjustments 16,700 (23,400)
Net cash provided by (used in) operating activities 200 (8,900)
NET INCREASE (DECREASE) IN CASH 200 (8,900)
CASH AND CASH EQUIVALENTS, beginning of
year 3,800 13,200
CASH AND CASH EQUIVALENTS, end of
quarter $ 4,000 $ 4,300
Supplemental disclosure of cash flow information:
Cash paid during the six months ended for interest $ 200 $
See notes to condensed financial statements
DENCOR ENERGY COST CONTROLS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
A. The condensed Financial Statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been 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.
In the opinion of the Company, all accompanying unaudited condensed
Financial Statements contain all adjustments, which consist only of recurring
adjustments, necessary to present fairly the financial position as of
June 30, 1996, and the results of operations and cash flows for the six months
then ended June 30, 1996 and 1995.
The results of operations for the six-month period ended June 30, 1996 and
1995, are not necessarily indicative of the results to be expected for the
full year. It is suggested that these Condensed Financial Statements be read
in conjunction with the Financial Statements and the notes therein included in
the Company's latest annual report on Form 10-KSB.
B. Long-Term Debt:
As of the end of Second Quarter, 1996, the Company had no long-term debt.
C. Common Stock:
During the Second Quarter, 1996, the Company sold no stock.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NET SALES
Second Quarter sales of $96,200 were approximately 46% less than sales for
the comparable period in 1995. The decrease in sales was primarily the result
of a decrease in sales of utility products sold through international
distribution.
COST AND EXPENSE
Cost of Products Sold as a percentage of net sales decreased to 54.3% for the
second quarter of 1996 compared with 56.2% for the same period in the prior
year. The decrease was due to the decreased sales of utility products which
have a higher cost per unit of sales than other products.
DENCOR ENERGY COST CONTROLS, INC.
Selling expenses as a percentage of sales increased to 4.9% for the second
quarter compared to 2.4% for the same period in the prior year. The increase
was due to decreased sales.
General and Administrative expenses decreased from the same quarter in the
prior year due to a decrease in personnel.
Research and Development expenses decreased slightly compared to the same
quarter in the prior year due to decreased development activity.
EARNINGS
The loss for the second quarter was $4,800 compared to earnings of $17,400
for the same period in the prior year. The loss was due to decreased sales.
LIQUIDITY
The Independent Auditor's Report on Dencor Energy Cost Controls, Inc.
Financial Statements for the year ended December 31, 1995 included a
"going concern" explanatory paragraph which means that the Auditors have
expressed substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regards to the factors which prompted the
explanatory paragraph are discussed in Note 2 to the Company's December 31, 1995
Financial Statements.
The Company's current ratio is 1.16 at the Quarter ended June 30, 1996.
Management believes the acid ratio (cash and accounts receivable divided by
current liabilities) of .32 is within the limits of reasonable liquidity.
PART II
OTHER INFORMATION
Items 1 through 6 would appear to require no answers according to the
instructions.
SIGNATURE
Pursuant to the requirements 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.
DENCOR ENERGY COST CONTROLS, INC.
Registrant
By: Maynard L. Moe
President
Date: July 26, 1996
