SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OR THE SECURITIES EXCHANGE ACT OF 1934
For the period from ______ to ______
Commission File No. 0-11359
LARCAN-TTC INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 52-0854061
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) ID Number)
650 South Taylor Avenue, Louisville, Colorado 80027
(Address of Principal Executive Offices, Including Zip Code)
(303) 665-8000
(Registrant's Telephone No.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) or the Securities Exchange Act
of 1934 during the preceding 12 months (or for 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 [ ]
The number of shares outstanding of the registrant's Common Stock, par value
$0.04 as of March 31, 1996 was 11,543,934 shares.
LARCAN-TTC INC.
CONTENTS
PART I. FINANCIAL INFORMATION
Page
Item 1
Balance Sheets -- March 31, 1996 and June 30, 1995 3
Statements of Operations -- Three months ended March 31,1996
and 1995 and the Nine Months ended March 31, 1996 and 1995 4
Statement of Cash Flows -- Nine months ended March 31, 1996 and 1995 5
Notes to Financial Statements 6
Item 2
Management's Discussion and Analysis of Results of Operations
and Financial Condition 7
PART II. OTHER INFORMATION
Item 1
Legal Proceedings 8
Item 2
Changes in Securities 8
Item 3
Defaults on Senior Securities 8
Item 4
Submission of Matters to a Vote of Security Holders 8
Item 5
Other Information 8
Item 6
Exhibits and Reports on Form 8-K 8
Signature Page 9
LARCAN-TTC INC.
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, June 30,
1996 1995
CURRENT ASSETS
Cash and cash equivalents $ 211,000 $ 118,000
Trade accounts receivable less allowance
for doubtful accounts of $217,000 (March)
and $203,000 (June) 437,000 350,000
Inventories (Note C) 2,085,000 1,564,000
Other 40,000 10,000
TOTAL CURRENT ASSETS 2,773,000 2,042,000
Equipment and Improvements 1,887,000 1,788,000
Less accumulated depreciation
and amortization 1,668,000 1,601,000
Net equipment and Improvements 219,000 187,000
Other Assets 19,000 19,000
TOTAL ASSETS 3,011,000 2,248,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of Credit $ 0 $ 200,000
Note Payable 7,000 70,000
Advances from Stockholder 3,400,000 1,575,000
Accounts Payable-Trade 1,126,000 735,000
Salaries, wages and employee benefits 142,000 177,000
Accrued expenses and other liabilities 50,000 100,000
Accrued warranty and other reserves 32,000 34,000
Customer Advances (Note D) 754,000 482,000
TOTAL CURRENT LIABILITIES 5,511,000 3,373,000
LONG-TERM LIABILITIES 0 0
TOTAL LIABILITIES 5,511,000 3,373,000
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value;
1,000,000 shares authorized
Series A 5% cumulative convertible, 500,000
(March) and no (June) shares issued and
outstanding, liquidation preferences
$1.00 per share 500,000 -------
Series A subscribed, 500,000 shares ------- 500,000
Common stock, $0.04 par value; 30,000,000 shares
authorized, 11,543,934 (Mar) and 6,543,934
(June) shares issued 462,000 262,000
Common stock, subscribed, 5,000,000 shares ------- 200,000
Additional paid-in capital 4,745,000 4,744,000
Accumulated deficit (8,197,000) (6,821,000)
Common stock held in treasury, at cost; 1,797 shares (10,000) (10,000)
TOTAL STOCKHOLDERS' EQUITY (2,500,000) (1,125,000)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 3,011,000 2,248,000
LARCAN-TTC INC.
STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
March 31, March 31, March 31, March 31,
1996 1995 1996 1995
NET SALES $2,305,000 $1,145,000 $5,357,000 $4,615,000
COST OF GOODS SOLD 2,277,000 1,009,000 4,894,000 3,797,000
OPERATING EXPENSES:
Selling, general and
administrative 371,000 407,000 1,131,000 1,216,000
Research and development 218,000 158,000 676,000 444,000
TOTAL EXPENSES 2,866,000 1,574,000 6,701,000 5,457,000
INCOME (LOSS) FROM
OPERATIONS (561,000) (429,000) (1,344,000) (842,000)
OTHER INCOME (EXPENSE)
Interest expense (3,000) (8,000) (16,000) (30,000)
Other income (4,000) (11,000) (16,000) (16,000)
TOTAL OTHER (7,000) (19,000) (32,000) (46,000)
NET INCOME (LOSS) $ (568,000) $ (448,000) $(1,376,000) $ (888,000)
NET INCOME (LOSS)
PER COMMON SHARE $ (0.05) $ (0.07) $ (0.14) $ (0.14)
WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING 11,543,934 6,542,934 9,877,267 6,542,934
LARCAN-TTC INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED
March 31, March 31,
1996 1995
OPERATING ACTIVITIES
Net Income (Loss) $(1,376,000) $ (888,000)
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation & Amortization 67,000 94,000
Provision for losses on A/R 14,000 5,000
Provision for losses on inventory 29,000 20,000
Change in operating assets and liabilities:
Trade A/R (101,000) 86,000
Inventories (550,000) (62,000)
Other Current Assets (30,000) (11,000)
Trade A/P 391,000 (30,000)
Salaries, Wages & Benefits (35,000) (100,000)
Accrued Expenses & Other Liabilities. (50,000) (138,000)
Accrued Warranty & Other Reserves (2,000) (22,000)
Customer Advances 272,000 365,000
Total adjustments 5,000 207,000
Net Cash used in operating activities (1,371,000) (681,000)
INVESTMENT ACTIVITIES:
Purchase. of Equip. & Improvements (99,000) (41,000)
Net Cash used in invest activities (99,000) (41,000)
FINANCING ACTIVITIES:
Advances from affiliates 1,825,000 1,050,000
Borrowing on Notes Payable 0 0
Payment on Notes Payable (263,000) (400,000)
Principal payments on L/T Debt 0 (2,000)
Proceeds from contributed capital 1,000 0
Net Cash provided by Financing Activities 1,563,000 648,000
Increase/Decrease in Cash 93,000 (74,000)
Cash and cash equivalents at the
beginning of the fiscal year 118,000 195,000
Cash and cash equivalents at the
end of nine months 211,000 121,000
Supplemental Disclosures of Cash Flow Information:
Cash Paid during the nine months for interest 16,000 30,000
LARCAN-TTC INC.
NOTES TO FINANCIAL STATEMENTS
A. Reference is made to Note A of the financial statements included in
LARCAN-TTC INC. (the Company) annual report on Form 10-K for the year ended
June 30, 1995, which describes the accounting policies of the Company and
its' subsidiary for annual reporting purposes.
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the Company's financial position, and
the results of its' operations and cash flows for the periods presented.
B. The results of operations for the nine-month period ended March 31, 1996,
are not necessarily indicative of results to be expected for the full year.
C. Inventories consisted of the following:
March 31, 1996 June 30, 1995
(Unaudited)
Parts, Raw Materials and Subassemblies $ 1,641,000 $ 1,452,000
Work-in-process 444,000 112,000
Total Inventories $ 2,085,000 $ 1,564,000
D. Other Matters
In the normal course of business, the Company often receives customer
advances at the time an order is accepted. Certain of these advances may be
refunded according to the terms of the underlying sales contracts. Also,
there may be various outstanding commitments and contingent liabilities,
such as guarantees and commitments to extend credit, etc., which are not
reflected in these financial statements. No losses are anticipated
as a result of these commitments and contingencies.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Operating Results
Third quarter revenues of fiscal year 1996 were higher than any previous
quarter in the last two years. Net revenues for the quarter increased 14%
($283,000) over the previous quarter and 101% ($1,160,000) over the same
period in the prior year. Driven by increased sales of RMS transmitters and
strong international radio sales, the low power television and radio product
lines increased significantly from each of the prior two quarters. Year to
date revenues are 16% ($742,000) higher than a year ago due to increased demand
in the high power product line.
As of March 31, 1995, sales booked but not yet shipped were $2,124,000.
This compares favorably to the backlog at year end June 30,1995 of
$1,099,000. The improvement is due primarily to high power television orders.
Selling, general and administrative (SG&A) expenses during the third quarter
were $371,000 compared to $407,000 a year ago reflecting management
instituted cost containment efforts. Year to date expenses of $1,131,000
are 7% ($85,000) less than prior year.
Research and development (R&D) costs in the third quarter increased $60,000
(38%) from the prior year's third quarter as improvements continue to be
engineered into the RMS series and new models developed. Reflecting the
company's commitment to new product development, year to date research and
development expenses have increased 52% ($232,000) over fiscal 1995.
Capital Resources
Operating losses in the quarter caused working capital to decline $552,000
from the second quarter of fiscal 1996 to ($2,738,000). At this time last
year working capital was ($1,678,000). Since the beginning of the current
fiscal year working capital has declined $1,407,000 reflecting fiscal year
operating losses.
As of March 31, 1996, the Company's short term bank borrowings under its
revolving line of credit ($200,000) were temporarily paid off . Since June
30, 1995 $1,825,000 has been received in loans from the parent corporation.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The lawsuit previously reported in the 10K has been settled with no
financial consequence to the company.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS ON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
None.
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