<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended January 31, 1996
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: 0-13011
- --------------------------------
TNR TECHNICAL, INC.
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(Exact name of Registrant as specified in its charter)
New York 11-2565202
- --------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
279 Douglas Avenue
Suite 1112
Altamonte Springs, Florida 32714
- --------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (407) 682-4311
--------------
None
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 .
--- ---
262,422 COMMON SHARES, $.0001 PAR VALUE WERE ISSUED AND OUTSTANDING AT
JANUARY 31, 1996.
1
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TNR TECHNICAL, INC.
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
January 31, 1996 (Unaudited) 3-4
and July 31, 1995
Statements of Operations
Three and Six Months ended
January 31, 1996 and
January 31, 1995 (Unaudited) 5
Statements of Cash Flows
Six Months ended January 31, 1996
and January 31, 1995 (Unaudited) 6
Notes to Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-9
PART II. OTHER INFORMATION 9
SIGNATURES 10
2
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TNR TECHNICAL, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
July 31, January 31,
1995 1996
(Unaudited)
---------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 100,298 136,718
Short-term investments 507,863 512,713
Accounts receivable - trade, less allowance
for doubtful accounts 380,302 472,871
Inventories 715,438 646,251
Prepaid expenses and other current assets 5,842 26,763
------------ ---------
Total current assets 1,709,743 1,795,316
Deferred income taxes 250,000 223,000
Property and equipment, at cost, net of accumulated
depreciation and amortization 56,877 49,037
Deposits 5,991 5,991
------------ ---------
$ 2,022,611 2,073,344
------------ ----------
------------ ----------
</TABLE>
(Continued)
3
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TNR TECHNICAL, INC.
BALANCE SHEETS, CONTINUED
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
July 31, January 31,
1995 1996
(Unaudited)
-------------------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 220,038 177,691
Accrued expenses and taxes 48,157 56,247
----------- ---------
Total current liabilities 268,195 233,938
----------- ---------
Shareholders' equity:
Common stock - $.02 par value, authorized 500,000
shares; issued 301,581 shares 6,032 6,032
Additional paid in capital 2,640,001 2,640,001
Retained earnings (697,347) (612,357)
Treasury stock; 39,159 shares at cost (194,270) (194,270)
----------- ---------
Total shareholders' equity 1,754,416 1,839,406
----------- ---------
$ 2,022,611 2,073,344
----------- ----------
----------- ----------
</TABLE>
See accompanying notes to financial statements.
4
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TNR TECHNICAL, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31, January 31,
1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 951,003 888,053 1,882,748 1,704,373
Interest 7,570 9,409 14,945 15,504
--------- --------- --------- ----------
958,573 897,462 1,897,693 1,719,877
--------- --------- --------- ----------
Costs and expenses:
Cost of goods sold 701,488 667,823 1,372,461 1,280,431
Selling, general and administrative 214,029 221,480 406,942 407,243
--------- --------- --------- ----------
915,517 889,303 1,779,403 1,687,674
--------- --------- --------- ----------
Income before income taxes 43,056 8,159 118,290 32,203
Provision for income taxes 15,800 - 33,300 -
--------- --------- --------- ----------
Net income $ 27,256 8,159 84,990 32,203
--------- --------- --------- ----------
--------- --------- --------- ----------
Net income per common share $ .10 .03 .32 .12
--------- --------- --------- ----------
--------- --------- --------- ----------
Weighted average number of shares outstanding 262,422 262,422 262,422 262,422
--------- --------- --------- ----------
--------- --------- --------- ----------
</TABLE>
See accompanying notes to financial statements.
5
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TNR TECHNICAL, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
January 31,
1996 1995
(Unaudited) (Unaudited)
----------------------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 84,990 32,203
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 9,600 6,516
Deferred income taxes 27,000 -
Changes in operating assets and liabilities:
Accounts receivable (92,569) (41,141)
Inventories 69,187 (53,815)
Prepaid expenses and other assets (20,921) (12,025)
Accounts payable and accrued expenses (34,257) 54,602
--------- ----------
Net cash provided by (used in)
operating activities 43,030 (13,660)
--------- ----------
Cash flows from investing activities
Increase in short-term investments (4,850) (297,056)
Purchase of property and equipment (1,760) (19,197)
--------- ----------
Net cash used in investing activities (6,610) (316,253)
--------- ----------
Increase (decrease) in cash and cash equivalents 36,420 (329,913)
Cash and cash equivalents - Beginning of period 100,298 353,804
--------- ----------
Cash and cash equivalents - End of period $ 136,718 23,891
--------- ----------
--------- ----------
</TABLE>
See accompanying notes to financial statements.
6
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TNR TECHNICAL, INC.
NOTES TO FINANCIAL STATEMENTS
(1) PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS
The unaudited financial statements have been prepared in accordance with
rules of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows, in conformity
with generally accepted accounting principles. The information furnished,
in the opinion of management, reflects all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the financial
position as of January 31, 1996, and results of operations and cash flows
for the three and six month periods ended January 31, 1996 and 1995. The
results of operations are not necessarily indicative of results which may
be expected for any other interim period or for the year as a whole.
(2) SALES TO MAJOR CUSTOMERS
During the six months ended January 31, 1996 and 1995, no customer
accounted for more than 10% of total revenues.
7
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Management's Discussion and Analysis of Financial Condition
and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
Working capital amounted to $1,561,378 at January 31, 1996 as compared to
$1,441,548 at July 31, 1995. Cash and short term investments amounted to
$649,431 at January 31, 1996 as compared to $608,161 at July 31, 1995. As more
fully described under the Company's statements of cash flows in the accompanying
financial statements, net cash provided by (used in) operating activities for
the six months ended January 31, 1996 and 1995 was $43,030 and ($13,660),
respectively. For the six months ended January 31, 1996, cash was provided by
operating activities due to the Company's net income and decreases in
inventories partially offset by increases in receivables and prepaid expenses
and decreases in payables and accrued expenses. For the six months ended
January 31, 1995, cash was used in operating activities as a result of increases
in inventories, accounts receivables and prepaid expenses partially offset by
the Company's net income and increases in payables and accrued expenses. During
the six months ended January 31, 1996 and 1995, net cash was used in investing
activities due to purchases of property and equipment and increases in short
term investments.
The Company's short term and long term liquidity needs have been satisfied
from internal sources including cash from operations and amounts available from
the Company's working capital. During the balance of fiscal 1996 and on a long
term basis, management expects this trend to continue. There are no material
commitments for capital expenditures or any long term credit arrangements.
RESULTS OF OPERATIONS
Net sales for the three months ended January 31, 1996 were $951,003, an
increase of $62,950 or approximately 7% from the comparable period of the prior
year. During the six months ended January 31, 1996, net sales were $1,882,748,
an increase of $178,375 or approximately 10% from the comparable period of the
prior year. During the three months ended January 31, 1996 and January 31,
1995, no customer accounted for more than 10% of total revenues. The increase in
sales for the three and six months ended January 31, 1996 was primarily due to
increases in sales to existing and new customers. The Company's gross margin
for the three and six months ended January 31, 1996 increased by approximately
1.4% and 2.2%, respectively, as compared to the comparable periods of the prior
year due to changes in the mix of product sales, increased prices and improved
purchasing.
Operating (selling, general and administrative) expenses, when expressed as
a percentage of net sales decreased approximately 2% for the three and six
months ended January 31, 1996 from the comparable periods of the prior year.
The decrease was due primarily to a reduction in advertising costs from that of
the comparable prior period. During the past three years and the three
8
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months ended January 31, 1996, the Company did not charge its operations with
any research and development costs.
Net income for the three months ended January 31, 1996 was $27,256 as
compared to $8,159 for the comparable period of the prior year. Net income for
the six months ended January 31, 1996 was $84,990 as compared to $32,203 for the
comparable period of the prior year.
Management of TNR Technical, Inc. has received a number of comments from
its odd lot stockholders regarding the costs associated with any sale of their
odd lots. Further, Management would like to reduce TNR's expense of maintaining
mailings to odd lot holders. Accordingly, TNR will from time-to-time privately
purchase from odd lot holders of its common stock, such odd lots (i.e. 99 shares
or less) from its stockholders of record on December 15, 1995 so long as such
purchases would not have the effect of reducing TNR's record holders to 500 or
less. The purchase price to be paid will be based upon the closing asked price
on the NASD electronic bulletin board of TNR's Common Stock for the preceding
trading day. Stockholders will not be permitted to breakup their stockholdings
into odd lots and stockholders or their legal representatives must affirm to TNR
that the odd lot shares submitted for payment represent the stockholder's entire
holdings and that such holdings do not exceed 99 shares. (This offer shall be
open to all odd lot beneficial holders even those held in street or nominee name
so long as the proper representations can be obtained satisfactory to TNR that
the shares are odd lot shares, were owned by the beneficial stockholder as of
December 15, 1995 and represent such stockholder's entire holdings of TNR).
This offer will not be valid in those states or jurisdictions where such offer
or sale would be unlawful.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS: None
Item 2. CHANGES IN SECURITIES: None
Item 3. DEFAULTS UPON 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:
(a) Exhibits
11 Earnings per share - included in the Statements
9
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of Operations
27 Financial Data Schedule
(b) During the quarter ended January 31, 1996 no report
on Form 8-K was filed or required to be filed.
TNR TECHNICAL, INC.
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.
TNR TECHNICAL, INC.
---------------------------------------
(Registrant)
Dated: March 11, 1996
/s/ Jerrold Lazarus
---------------------------------------
Jerrold Lazarus (Chairman of the
Board, Chief Executive Officer,
Chief Accounting and Financial
Officer and Treasurer)
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JAN-31-1996
<CASH> 644,431
<SECURITIES> 0
<RECEIVABLES> 487,253
<ALLOWANCES> 14,382
<INVENTORY> 646,251
<CURRENT-ASSETS> 1,795,316
<PP&E> 120,068
<DEPRECIATION> 90,489
<TOTAL-ASSETS> 2,073,344
<CURRENT-LIABILITIES> 233,938
<BONDS> 0
0
0
<COMMON> 6,032
<OTHER-SE> 1,833,374
<TOTAL-LIABILITY-AND-EQUITY> 1,839,406
<SALES> 1,882,748
<TOTAL-REVENUES> 1,897,693
<CGS> 1,372,461
<TOTAL-COSTS> 1,779,403
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 118,290
<INCOME-TAX> 33,300
<INCOME-CONTINUING> 84,990
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 84,990
<EPS-PRIMARY> .32
<EPS-DILUTED> .32
</TABLE>
