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 March 31, 1997
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, 1997 was 11,543,934 shares.
LARCAN-TTC INC.
CONTENTS
PART I. FINANCIAL INFORMATION
Page
Item 1 Balance Sheets -- March 31, 1997 and June 30, 1996S 3
Statements of Operations -- Three months ended March 31,
1997 and 1996 and the Nine months ended March 31, 1997
and 1996 4
Statement of Cash Flows -- Nine months ended March 31,
1997 and 1996 5
Notes to Financial Statements 6
Item 2 Management's Discussion and Analysis of Results of
Operations and Financial Condition 7-8
PART II. OTHER INFORMATION
Item 1 Legal Proceedings 9
Item 2 Changes in Securities 9
Item 3 Defaults on Senior Securities 9
Item 4 Submission of Matters to a Vote of Security Holders 9
Item 5 Other Information 9
Item 6 Exhibits and Reports on Form 8-K 9
Signature Page 10
LARCAN-TTC INC.
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, June 30,
1997 1996
CURRENT ASSETS
Cash and cash equivalents $ 59,000 $ 98,000
Trade accounts receivable less allowance
for doubtful accounts of $155,000 (March)
and $154,000 (June) 235,000 363,000
Accounts Receivable - related party 151,000 792,000
Inventories 1,633,000 1,797,000
Other 63,000 23,000
TOTAL CURRENT ASSETS 2,141,000 3,073,000
Equipment and Improvements 2,011,000 1,923,000
Less accumulated depreciation and
amortization (1,748,000) (1,695,000)
Net equipment and Improvements 263,000 228,000
Note Receivable 14,000 19,000
Other Assets 20,000 19,000
TOTAL ASSETS 2,438,000 3,339,000
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Line of Credit $ 150,000 $ 200,000
Note Payable 13,000 ---
Accounts Payable-Trade 744,000 1,410,000
Accounts Payable - related party 409,000 698,000
Salaries, wages and employee benefits 119,000 181,000
Accrued expenses and other liabilities 101,000 142,000
Accrued warranty and other reserves 98,000 32,000
Customer Advances 172,000 302,000
TOTAL CURRENT LIABILITIES 1,806,000 2,965,000
ADVANCES FROM STOCKHOLDER 5,625,000 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 (10,689,000) (9,147,000)
Common stock held in treasury, at cost;
1,796 shares (10,000) (10,000)
TOTAL STOCKHOLDERS' DEFICIT (4,993,000) (3,451,000)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 2,438,000 3,339,000
See note to financial statements
LARCAN-TTC INC.
STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
March 31, March 31, March 31, March 31,
1997 1996 1997 1996
NET SALES $1,315,000 $ 2,305,000 $ 4,479,000 $ 5,357,000
COST OF GOODS SOLD 1,221,000 2,277,000 4,298,000 4,894,000
OPERATING EXPENSES:
Selling, general and
administrative 406,000 371,000 1,118,000 1,131,000
Research and development 169,000 218,000 596,000 676,000
TOTAL EXPENSES 1,796,000 2,866,000 6,012,000 6,701,000
INCOME (LOSS) FROM
OPERATIONS (481,000) (561,000) (1,533,000) (1,344,000)
OTHER INCOME (EXPENSE)
Interest expense (2,000) (3,000) (10,000) (16,000)
Other income/(expense) 6,000 (4,000) 1,000 (16,000)
TOTAL OTHER 4,000 (7,000) (9,000) (32,000)
NET INCOME (LOSS) $ (477,000) $ (568,000) $(1,542,000) $(1,376,000)
NET INCOME (LOSS)
PER COMMON SHARE $ (0.04) $ (0.05) $ (0.13) $ (0.14)
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 11,543,934 11,543,934 11,543,934 9,877,267
See note to financial statements
LARCAN-TTC INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED
March 31, March 31,
1997 1996
OPERATING ACTIVITIES
Net Income (Loss) $(1,542,000) $(1,376,000)
Adjustments to reconcile net income to net
cash provided by (used in)operating activities:
Depreciation & Amortization 53,000 67,000
Provision for losses on A/R 1,000 14,000
Provision for losses on inventory 74,000 29,000
Change in operating assets and liabilities:
Trade A/R 768,000 (101,000)
Inventories 90,000 (550,000)
Other Current Assets (40,000) (30,000)
Trade A/P (955,000) 391,000
Salaries, Wages & Benefits (62,000) (35,000)
Accrued Expenses & Other Liabilities (41,000) (50,000)
Accrued Warranty & Other Reserves 66,000 (2,000)
Customer Advances (130,000) 272,000
Other (1,000) ---
Total adjustments (177,000) 5,000
Net Cash used in operating activities (1,719,000) (1,371,000)
INVESTMENT ACTIVITIES:
Purchase. of Equip. & Improvements (88,000) (99,000)
Notes Receivable 5,000 ---
Net Cash used in invest activities (83,000) (99,000)
FINANCING ACTIVITIES:
Advances from affiliates 1,800,000 1,825,000
Net Change in Notes Payable and Line of Credit (37,000) (263,000)
Proceeds from contributed capital --- 1,000
Net Cash provided by Financing Activities 1,763,000 1,563,000
Increase/Decrease in Cash (39,000) 93,000
Cash and cash equivalents at the beginning of
the fiscal year 98,000 118,000
Cash and cash equivalents at the end of nine months 59,000 211,000
Supplemental Disclosures of Cash Flow Information:
Cash Paid during the nine months for interest 10,000 16,000
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 to be expected for the full
year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Operating Results
While net revenues for the third quarter of fiscal year 1997 decreased 20%
($323,000) from the prior quarter, the decrease was attributable to general
market conditions for high power equipment. There were no high power shipments
in the current quarter as customers waited for the digital broadcasting
allocations to be issued. High power sales also declined $733,000 from the
third quarter of the prior year. In addition FM sales were down $597,000
from the comparable prior year time period due to a large international shipment
in January 1996. As a result total revenues declined 43% ($990,000) from the
third quarter 1996. Low power television shipments continue to exhibit solid
growth increasing 88% ($533,000) from the second quarter of the year and
increasing 36% ($301,000) from the third quarter of the prior year.
Year to date low power television sales have jumped 19% (408,000) over
prior year.
At March 31, 1997, sales booked but not yet shipped were $781,000. This is
down $557,000 from the backlog at year end June 30,1996 due to the decline
in high power bookings. The backlog at March 31, 1996 was $2,324,000.
Margins reflecting the efforts of our productivity improvements increased to
7% in the quarter. This compares to 3% in the second quarter, 2% in the first
quarter, and 1% in the prior year third quarter. Smoothing out the production
flow and price concessions from vendors were major factors.
Operating expenses during the quarter were $575,000 comparable to the level
a year ago ($589,000). Year to date operating expenses have decreased $93,000
(5%) from prior year.
As a result of margin improvement and fixed cost containment the quarterly
loss was the smallest of any in the preceding four quarters.
Capital Resources
Operating losses in the quarter of $477,000 and a reduction of trade payables
during the quarter of $277,000 were funded by $850,000 in advances from LARCAN.
The decrease in payables generated a working capital increase of $369,000
in the quarter.
Reflecting the renegotiation of the Company's short term bank borrowings, the
revolving line of credit was reduced to $150,000 from the June 30, 1996 balance
of $200,000 with $50,000 being converted to a term note payable. During the
quarter the balance on the term note payable was reduced to $13,000.
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.
The company is presently pursuing a dispute with a customer concerning the
non-payment of an accounts receivable.
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: June 2, 1997 /s/ G. James Wilson
G. James Wilson
Director/President
Date: June 2, 1997 /s/ Ronald M. Eve
Ronald M. Eve
Controller / Corporate Secretary
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