SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[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)
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 September 30, 1996 was 11,543,934 shares.
LARCAN-TTC INC.
CONTENTS
PART I. FINANCIAL INFORMATION
Page
Item 1 Balance Sheets - September 30,1996 and June 30,1996 3
Statements of Operations -- Three months ended September 30, 1996 4
Statement of Cash Flows -- Three months ended September 30, 1996 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
September 30, 1996 June 30, 1996
CURRENT ASSETS
Cash and cash equivalents $156,000 $98,000
Trade accounts receivable less allowance
for doubtful accounts of $164,000 (Sept)
and $154,000 (June) 493,000 363,000
Accounts Receivable - Related Party 638,000 792,000
Inventories (Net) 1,707,000 1,797,000
Other 41,000 23,000
TOTAL CURRENT ASSETS 3,035,000 3,073,000
Equipment and Improvements 1,936,000 1,923,000
Less accumulated depreciation
and amortization (1,713,000) (1,695,000)
Net equipment and Improvements 223,000 228,000
Note Receivable 18,000 19,000
Other Assets 19,000 19,000
TOTAL ASSETS 3,295,000 3,339,000
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Line of Credit $150,000 $200,000
Note Payable 38,000 ---
Accounts Payable-Trade 810,000 1,410,000
Accounts Payable - related party 828,000 698,000
Salaries, wages and employee benefits 145,000 181,000
Accrued expenses and other liabilities 127,000 142,000
Accrued warranty and other reserves 119,000 32,000
Customer Advances 638,000 302,000
TOTAL CURRENT LIABILITIES 2,855,000 2,965,000
Advances from Stockholder 4,475,000 3,825,000
STOCKHOLDERS' DEFICIT
Preferred stock, $1.00 par value; 1,000,000 shares
authorized
Series A 5% cumulative convertible, 500,000 shares
issued and outstanding, liquidation preferences
$1.00 per share 500,000 500,000
Common stock, $0.04 par value; 30,000,000 shares
authorized, 11,543,934 shares issued 462,000 462,000
Additional paid-in capital 4,744,000 4,744,000
Accumulated deficit (9,731,000) (9,147,000)
Common stock held in treasury,at cost;
1,796 shares (10,000) (10,000)
TOTAL STOCKHOLDERS' DEFICIT (4,035,000) (3,451,000)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 3,295,000 3,339,000
See Note to financial statements
LARCAN-TTC INC
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
September 30, 1996 September 30, 1995
NET SALES $1,526,000 $1,030,000
COST OF GOODS SOLD 1,492,000 928,000
OPERATING EXPENSES:
Selling, general and administrative 359,000 363,000
Research and development 251,000 265,000
TOTAL EXPENSES 2,102,000 1,556,000
LOSS FROM OPERATIONS (576,000) (526,000)
OTHER INCOME (EXPENSE)
Interest expense (5,000) (6,000)
Other income (expense) (3,000) (3,000)
TOTAL OTHER (8,000) (9,000)
NET LOSS PER COMMON SHARE $(0.05) $(0.08)
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 11,543,934 6,543,934
See note to financial statements
LARCAN-TTC INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended
September 30, 1996 September 30, 1995
OPERATING ACTIVITIES
Net Loss $(584,000) $(535,000)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Depreciation & Amortization 18,000 20,000
Provision for losses on A/R 10,000 0
Provision for losses on inventory 15,000 0
Change in operating assets and liabilities:
Trade A/R 15,000 (122,000)
Inventories 75,000 (292,000)
Other Current Assets (18,000) (24,000)
Trade A/P (470,000) 427,000
Salaries, Wages & Benefits (36,000) (29,000)
Accrued Expenses & Other Liabilities (15,000) 28,000
Accrued Warranty & Other Reserves 87,000 0
Customer Advances 336,000 (83,000)
Total adjustments 17,000 (75,000)
Net Cash used in operating activities (567,000) (610,000)
INVESTMENT ACTIVITIES:
Purchase. of Equip. & Improvements (13,000) (12,000)
Net Cash used in invest activities (13,000) (12,000)
FINANCING ACTIVITIES:
Advances from affiliates 650,000 575,000
Change in Notes Payable and Line of Credit (12,000) (19,000)
Net Cash provided by Financing
Activities 638,000 556,000
Increase/Decrease in Cash 58,000 (66,000)
Cash and cash equivalents at the
beginning of the fiscal year 98,000 118,000
Cash and cash equivalents at the end of
three months 156,000 52,000
Supplemental Disclosures of Cash Flow Information
Cash Paid during the three months for
interest 5,000 6,000
See note to financial statements
LARCAN-TTC INC.
NOTES TO FINANCIAL STATEMENTS
Reference is made to the financial statements included in the LARCAN-TTC
INC.(the Company) annual report on Form 10-K for the year ended June 30, 1996,
which describes the accounting policies of the Company 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. The results of the interm period are not necessarily indicative
of results expected for the full year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Operating Results
First quarter revenues were 48% higher than prior year. High power
television revenues generated the majority of the increase. Radio revenues
fell from prior year but low power television sales registered an increase.
As of September 30, 1996, sales booked but not yet shipped were $1,448,000.
This compares favorably to the backlog at year end June 30,1996 of
$1,348,000. The improvement is due primarily to high power television orders.
Margins declined to 2% from 10% in the prior year as the Company continues to
develop its cost structure for high power products. The fiscal quarter
margins were however, higher than either of the two preceding quarterly
reporting periods.
The Company was able to reduce its operating expenses to 41% of revenues in
the first fiscal quarter from 61% for the same period in the prior year. In
addition to higher revenues the Company was able to reduce its operating
expenses from the prior year. R & D expenditures will continue to be
invested in new generation high power products as well as the 1kW RMS series
product.
Capital Resources
Operating losses in the quarter of $584,000 were funded by $650,000 in
advances from LARCAN. Working capital increased to $180,000 from $108,000 at
June 30, 1996.
Reflecting the renegotiation of the Company's short term bank borrowings, the
revolving line of credit was reduced to $150,000 from $200,000 at June 30,
1996 with $50,000 being converted to a term note payable. During the quarter
the balance on the term note payable was reduced to $38,000.
This forgoing discussion contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act which are intended to be covered by the safe harbors created
thereby. These statements include the plans and objectives of management for
future operations based on current expectations that involve numerous risks
and uncertainties. These plans involve judgments with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company.
Although the Company believes that the assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could be
inaccurate and, therefore, there can be no assurance that any forward-looking
statements included in this 10-QSB will prove to be accurate. In light of
the significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be regarded as
a representation by the Company or any other person that the objectives and
plans of the Company will be achieved.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
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.
SIGNATURES
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.
LARCAN - TTC INC.
____________________________________________
(Registrant)
Date: November 12, 1996 /s/ G. James Wilson
G. James Wilson
Director/President
Date: November 12, 1996 /s/ Ronald M. Eve
Ronald M. Eve
Controller / Corporate Secretary
8
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