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 March 31, 1998
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 as 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 issued, at April 24, 1998.
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 March 31 December 31
1998 1997
(unaudited)
CURRENT ASSETS:
Cash $ 700 $ 8,300
Accounts Receivable, net of allowance for doubtful
accounts of $6,700 70,900 20,500
Inventories 135,900 149,700
Other 16,800 6,100
TOTAL CURRENT ASSETS 224,300 184,600
Furniture & Equipment 213,300 213,300
Less Accumulated Depreciation (213,300) (213,300)
- -
Long term receivables, net of allowance for doubtful
receivables of $9,400 16,800 17,100
$241,100 $201,700
LIABILITIES & SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES:
Notes Payable - Shareholders $127,500 $118,500
Accounts Payable 55,500 51,500
Accrued Compensation and Benefits 55,600 36,600
Accrued Interest - Shareholders 78,800 72,200
Warranty Reserve 6,300 6,300
Other 1,700 2,100
TOTAL CURRENT LIABILITIES 325,400 287,200
SHAREHOLDERS' DEFICIT
Common Stock, no par value, authorized 5,000,000
shares; issued & outstanding, 3,671,304 shares 1,147,600 1,147,600
Deficit (1,231,900) (1,233,100)
Shareholders' Deficit (84,300) (85,500)
$ 241,100 $ 201,700
See notes to condensed financial statements
DENCOR ENERGY COST CONTROLS, INC.
STATEMENTS OF OPERATIONS
(unaudited)
Three Months
Ended March 31
1998 1997
REVENUES:
Net Sales $ 116,900 $ 113,100
Interest and Other 2,800 1,800
TOTAL REVENUES 119,700 114,900
COSTS AND EXPENSES;
Cost of Products Sold 53,800 54,600
Selling 5,500 6,100
General and Administrative 34,000 33,100
Research and Development 18,700 17,900
Interest 6,500 4,700
118,500 116,400
NET EARNINGS (LOSS) $ 1,200 $ (1,500)
NET (LOSS) PER
COMMON SHARE: $ * $ *
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 3,671,304 3,671,304
* Less than $0.01 per common share
See notes to condensed financial statements
DENCOR ENERGY COST CONTROLS, INC.
STATEMENT OF CASH FLOWS
(unaudited)
Three Months Ended March 31
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 1,200 $ (1,500)
Adjustments to reconcile net earnings (loss)
to net cash provided by (used in)
operating activities:
Depreciation 1,000
Changes in operating assets and liabilities:
Accounts and other receivables (50,100) 3,200
Inventories 13,800 11,400
Other assets (10,700) (9,000)
Accounts payable 4,000 9,100
Accrued compensation and benefits 19,000 (5,300)
Accrued interest - shareholders 6,600 2,900
Deposit 0 (5,700)
Other liabilities (400) (200)
Total adjustments (17,800) 7,400
Net cash provided by (used in) operating
activities (16,600) 5,900
Cash flows from financing activities:
Proceeds from notes payable-shareholders 9,000
Net cash provided by financing activities 9,000
Net increase (decrease) in cash (7,600) 5,900
CASH, beginning of year 8,300 1,600
CASH, end of quarter $ 700 $ 7,500
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 March
31, 1998, and the results of operations and cash flows for the three months
ended March 31, 1998 and 1997.
The results of operations for the three-month periods ended March 31,
1998 and 1997, 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 First Quarter, 1998, the Company had no long-term debt.
C. Common Stock:
During the First Quarter, 1998, the Company sold no restricted stock.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NET SALES
First Quarter sales of $116,900 were approximately 3.4% greater than the
$113,100 for the comparable Period in 1997. The increase is primarily a
result of an increase in sales to utilities.
COST AND EXPENSE
Cost of Products Sold as a percentage of net sales decreased 2% for the first
quarter of 1998 compared with the same period in the prior year. This
increase in gross margin is primarily due to an increase in the percentage of
sales of our new Energy Administration System which has a higher margin than
other products.
Selling expenses as a percentage of net sales for the first quarter of 1998
decreased to 4.7% compared to 5.4% for the same period in the prior year.
DENCOR ENERGY COST CONTROLS, INC.
General and Administrative expenses for the first quarter 1998 were
essentially the same as for the same period in the prior year.
Research and Development expenses as a percentage of net sales were
essentially the same as for the period in the prior year.
EARNINGS
The net earnings for the first quarter were $1,200 compared to a net loss of
$1,500 for the same period in the prior year. The increase in net earnings
was due to the decrease in cost of goods sold as a percentage of sales.
LIQUIDITY
The Independent Auditor's Report on Dencor Energy Cost Controls, Inc.
Financial Statements for the year ended December 31, 1997 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, 1997
Financial Statements.
The Company's current ratio is .69 at the Quarter ended March 31, 1998.
Management believes the acid ratio (cash and accounts receivable divided by
current liabilities) of 0.22 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 March 31, 1998, the Registrant filed
one report on Form 8-K on March 11, 1998.
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 and Principal Accounting Officer
Date: April 24, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
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<PP&E> 213,300
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0
0
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