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 December 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 December 31, 1996 was 11,543,934 shares.
LARCAN-TTC INC.
CONTENTS
PART I. FINANCIAL INFORMATION
Page
Item 1 Balance Sheets -- December 31, 1996 and June 30, 1996 3
Statements of Operations -- Three months ended
December 31,1996 and 1995 and the Six months ended
December 31, 1996 and 1995 4
Statement of Cash Flows -- Six months ended
December 31, 1996 and 1995 5
Notes to Financial Statements 6
Item 2 Management's Discussion and Analysis of Results 7-8
of Operations and Financial Condition
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
December 31, June 30,
1996 1996
CURRENT ASSETS
Cash and cash equivalents $111,000 $ 98,000
Trade accounts receivable less allowance
for doubtful accounts of $138,000 (December)
and $154,000 (June) 299,000 363,000
Accounts Receivable - related party 221,000 792,000
Inventories 1,670,000 1,797,000
Other 44,000 23,000
TOTAL CURRENT ASSETS 2,345,000 3,073,000
Equipment and Improvements 1,982,000 1,923,000
Less accumulated depreciation and
amortization (1,724,000) (1,695,000)
Net equipment and Improvements 258,000 228,000
Note Receivable 16,000 19,000
Other Assets 19,000 19,000
TOTAL ASSETS 2,638,000 3,339,000
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Line of Credit $150,000 $200,000
Note Payable 25,000 ---
Accounts Payable-Trade 789,000 1,410,000
Accounts Payable - related party 641,000 698,000
Salaries, wages and employee benefits 147,000 181,000
Accrued expenses and other liabilities 165,000 142,000
Accrued warranty and other reserves 119,000 32,000
Customer Advances 343,000 302,000
TOTAL CURRENT LIABILITIES 2,379,000 2,965,000
ADVANCES FROM STOCKHOLDER 4,775,000 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 (10,212,000) (9,147,000)
Common stock held in treasury,
at cost; 1,796 shares (10,000) (10,000)
TOTAL STOCKHOLDERS' DEFICIT (4,516,000) (3,451,000)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 2,638,000 3,339,000
See note to financial statements
LARCAN-TTC INC.
STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
December 31,December 31, December 31,December 31,
1996 1995 1996 1995
NET SALES $ 1,638,000 $ 2,022,000 $ 3,164,000 $ 3,052,000
COST OF GOODS SOLD 1,585,000 1,689,000 3,077,000 2,617,000
OPERATING EXPENSES:
Selling, general and
administrative 353,000 397,000 712,000 760,000
Research and development 176,000 193,000 427,000 458,000
TOTAL EXPENSES 2,114,000 2,279,000 4,216,000 3,835,000
INCOME (LOSS) FROM
OPERATIONS (476,000) (257,000) (1,052,000) (783,000)
OTHER INCOME (EXPENSE)
Interest expense (3,000) (7,000) (8,000) (13,000)
Other income/(expense) (2,000) (9,000) (5,000) (12,000)
TOTAL OTHER (5,000) (16,000) (13,000) (25,000)
NET INCOME (LOSS) $ (481,000) $ (273,000) $(1,065,000) $(808,000)
NET INCOME (LOSS) PER
COMMON SHARE $(0.04) $(0.02) $(0.09) $(0.09)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 11,543,934 11,543,934 11,543,934 9,043,934
See note to financial statements
LARCAN-TTC INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
SIX MONTHS ENDED
December 31, December 31,
1996 1995
OPERATING ACTIVITIES
Net Income (Loss) $ (1,065,000) $ (808,000)
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation & Amortization 40,000 43,000
Provision for losses on A/R (16,000) 7,000
Provision for losses on inventory 41,000 22,000
Change in operating assets and liabilities:
Trade A/R 651,000 (116,000)
Inventories 86,000 (881,000)
Other Current Assets (21,000) 6,000
Trade A/P (678,000) 576,000
Salaries, Wages & Benefits (34,000) 15,000
Accrued Expenses & Other Liabilities 23,000 12,000
Accrued Warranty & Other Reserves 87,000 (2,000)
Customer Advances 41,000 261,000
Other --- 1,000
Total adjustments 220,000 (56,000)
Net Cash used in operating activities (845,000) (864,000)
INVESTMENT ACTIVITIES:
Purchase. of Equip. & Improvements (70,000) (91,000)
Notes Receivable 3,000 ---
Net Cash used in invest activities (67,000) (91,000)
FINANCING ACTIVITIES:
Advances from affiliates 950,000 975,000
Net Change in Notes Payable and Line of Credit (25,000) (41,000)
Net Cash provided by Financing Activities 925,000 934,000
Increase/Decrease in Cash 13,000 (21,000)
Cash and cash equivalents at the
beginning of the fiscal year 98,000 118,000
Cash and cash equivalents at the
end of six months 111,000 97,000
Supplemental Disclosures of
Cash Flow Information:
Cash Paid during the six months for interest 8,000 13,000
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
Net revenues for the second quarter of fiscal year 1997 increased 7%
($112,000) over the first quarter of the fiscal year. In comparison to
the second quarter of the prior fiscal year net revenues were down
$384,000 (19%). Year to date revenues through six months are up 4%
($112,000) versus prior year. High power television shipments have
increased 20% over the prior year. Low power television sales benefiting
from the RMS series of products have increased 8% (107,000) from last
year. Radio sales have declined by $280,000 (56%) from prior year due
to softness in the international market.
At December 31, 1996, sales booked but not yet shipped were $1,192,000.
This is down from the backlog at year end June 30,1996 ($1,348,000) which
is attributable to the increased high power shipments.
Margins increased slightly in the second quarter to 3% as compared to 2%
in the first quarter. Margins are expected to remain tight due to the
increased competition in the market place.
Operating expenses during the quarter were $529,000 a decrease of 10%
($61,000) from the second quarter of last year. Year to date operating
expenses have decreased $79,000 from prior year to 36% of revenues versus
40% at December 1995.
Capital Resources
Operating losses in the quarter of $481,000 were funded by $300,000 in
advances from LARCAN along with collections from trade receivables.
Working capital decreased to ($34,000) 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 $25,000.
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.
The company's annual shareholders' meeting was held on November 5, 1996.
The election of the board of directors was held with the following
directors being elected:
Paul A. Dickie G. James Wilson Dirk B. Freeman
Nancy McGee James D. Adamson Byron W. StClair
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: February 10, 1997 /s/ G. James Wilson
G. James Wilson
Director/President
Date: February 10, 1997 /s/ Ronald M. Eve
Ronald M. Eve
Controller / Corporate Secretary
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