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 September 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 Sept. 30, 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 Sept. 30 Dec. 31
1996 1995
(unaudited)
CURRENT ASSETS:
Cash $ 5,800 $ 3,800
Accounts Receivable,net of allowance for
doubtful accounts of $9,200 65,400 77,000
Inventories 155,100 174,200
Other 15,000 8,300
TOTAL CURRENT ASSETS 241,300 263,300
Furniture & Equipment 213,300 213,300
Less Accumulated Depreciation (210,400) (207,400)
2,900 5,900
Other Receivables, net of allowance for
doubtful receivables of $1,700 7,000 6,600
$251,200 $275,800
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable - Shareholders $ 93,400 $ 93,400
Accounts Payable 41,400 52,800
Accrued Compensation and Benefits 21,000 22,700
Accrued Interest - Shareholders 47,200 33,600
Warranty Reserve 6,300 6,300
Other 1,200 3,900
TOTAL CURRENT LIABILITIES 210,500 212,700
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 (1,106,900) 1,084,500)
Stockholders' Equity 40,700 63,100
$ 251,200 $ 275,800
See notes to condensed financial statements
DENCOR ENERGY COST CONTROLS, INC.
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Nine Months
Ended Sept. 30 Ended Sept. 30
1996 1995 1996 1995
REVENUES:
Net Sales $ 100,000 $ 149,000 $ 299,900 $ 434,800
Interest and Other 2,300 3,800 6,200 7,200
TOTAL REVENUES 102,300 152,800 306,100 442,000
COSTS AND EXPENSES;
Cost of Products Sold 50,000 89,500 161,100 243,800
Selling 7,000 5,700 16,200 15,600
General and Administrative 30,700 33,000 86,700 98,100
Research and Development 15,800 19,500 50,600 56,000
Interest 4,700 4,300 13,900 13,200
108,200 152,000 328,500 426,700
NET EARNINGS (LOSS) $ (5,900) $ 800 $(22,400) $ 15,300
NET EARNINGS (LOSS) PER
COMMON SHARE:
Net Earnings (loss) $ (.0017) $ .0003 $ (.0062) $ .0042
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)
Nine Months Ended Sept. 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ (22,400) $ 15,300
Adjustments to reconcile net earnings
to net cash used in operating activities:
Depreciation 3,000 4,100
Provision for (recovery of) losses
on doubtful accounts receivable
Changes in operating assets and liabilities:
Accounts and other receivables 11,200 (49,800)
Inventories 19,100 (15,800)
Other assets (6,700) (6,200)
Accounts payable (11,400) 20,500
Accrued compensation and benefits (1,700) 2,800
Accrued interest - shareholders 3,600 12,500
Warranty reserve 500
Other liabilities (2,700) 3300
Total adjustments 24,400 (28,100)
Net cash provided by (used in) operating 2,000 (12,800)
activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable-
Shareholders 300
NET INCREASE (DECREASE) IN CASH 2,000 (12,800)
CASH AND CASH EQUIVALENTS, beginning of
year 3,800 13,200
CASH AND CASH EQUIVALENTS, end of
quarter $ 5,800 $ 700
Supplemental disclosure of cash flow
information: Cash paid during the
nine months ended for interest $ 400 $ 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 make the financial statements not misleading and to
present fairly the financial position as of September 30, 1996, and the
results of operations and cash flows for the nine months then ended
September 30, 1996 and 1995.
The results of operations for the nine-month period ended
September 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 Third Quarter, 1996, the Company had no long-term debt.
C. Common Stock:
During the Third Quarter, 1996, the Company sold no stock.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NET SALES
Third Quarter sales of $100,000 were approximately 33% less than sales for the
comparable period in 1995. Year to date sales of $299,900 were approximately
31% less than sales for the comparable period in 1995. The decrease in sales
was the result of a decrease in sales of utility products sold through
international distribution as well as a decrease in sales to dealers.
COST AND EXPENSE
Cost of Products Sold as a percentage of net sales decreased to 50.0% for the
third quarter of 1996 compared with 60.0% for the same period in the prior
year. Cost of Products Sold as a percentage of net sales decreased to 53.7%
for year to date 1996 compared to 56.1% for the comparable period in 1995.
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 7.0% for the third
quarter compared to 3.9% for the same period in the prior year. Selling
expenses as a percentage of sales increased to 5.4% for year to date compared
to 3.6% for the comparable period in 1995. The increase was due to decreased
sales as well as increased travel expense.
General and Administrative expenses decreased from the same quarter in the
prior year and year to date due to a decrease in personnel.
Research and Development expenses decreased slightly compared to the same
quarter in the prior year and year to date due to decreased development
activity.
EARNINGS
The loss for the second quarter was $5,900 compared to earnings of $800 for
the same period in the prior year. The loss for the year to date was $22,400
compared to earnings of $15,300 for the comparable period in 1995.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 1.15 at the Quarter ended September 30, 1996.
Management believes the acid ratio (cash and accounts receivable divided by
current liabilities) of .34 is within the limits of reasonable liquidity.
PART II
OTHER INFORMATION
Items 1 through 5 would appear to require no answers according to the
instructions.
Item 6. Exhibits And Reports On Form 8-K
(a) The following Exhibit is filed as part of this Quarterly
Report on Form 10-Q:
27. Financial Data Schedule.
(b) During the quarter ended September 30, 1996, the Registrant
did not file any reports on Form 8-K.
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: October 31, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-
KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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