<PAGE> 1
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 October 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.
- --------------------------------------------------------------------------------
(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)
301 Central Park Drive
Sanford, Florida 32771
- ---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (407) 321-3011
----------------
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
-----. -----.
262,427 Common Shares, $.0001 par value were issued and outstanding at October
31, 1996.
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TNR TECHNICAL, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
October 31, 1996 (Unaudited)
and July 31, 1996 3-4
Statements of Operations
Three Months ended
October 31, 1996 and
October 31, 1995 (Unaudited) 5
Statements of Cash Flows
Three Months ended October 31, 1996
and October 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
</TABLE>
2
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TNR TECHNICAL, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
July 31, October 31,
1996 1996
(Unaudited)
-----------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 426,320 309,860
Short-term investments 348,250 348,250
Accounts receivable - trade, less allowance
for doubtful accounts 442,181 388,988
Income taxes receivable 1,685 1,685
Inventories 440,586 605,032
Prepaid expenses and other current assets 5,198 32,022
Deferred income taxes 13,000 13,000
------------ -----------
Total current assets 1,677,220 1,698,837
Deferred income taxes 197,000 197,000
Property and equipment, at cost, net of accumulated
depreciation and amortization 109,796 115,196
Deposits 13,383 12,235
------------ ------------
$ 1,997,399 2,023,268
============ ============
</TABLE>
(Continued)
3
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TNR TECHNICAL, INC.
BALANCE SHEETS, CONTINUED
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
July 31, October 31,
1996 1996
(Unaudited)
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<S> <C> <C>
Current liabilities:
Accounts payable $ 61,077 76,857
Accrued expenses and taxes 46,508 55,272
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Total current liabilities 107,585 132,129
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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 (561,949) (560,624)
Treasury stock; 39,159 shares at cost (194,270) (194,270)
--------------- -------------
Total shareholders' equity 1,889,814 1,891,139
--------------- -------------
$ 1,997,399 2,023,268
=============== =============
</TABLE>
See accompanying notes to financial statements.
4
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TNR TECHNICAL, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
October 31,
1996 1995
(Unaudited) (Unaudited)
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<S> <C> <C>
Revenues:
Net sales $ 869,364 931,745
Interest 8,141 7,375
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877,505 939,120
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Costs and expenses:
Cost of goods sold 644,995 670,973
Selling, general and administrative 231,185 192,913
-------------- --------------
876,180 863,886
-------------- --------------
Income before income taxes 1,325 75,234
Provision for income taxes - 17,500
-------------- --------------
Net income $ 1,325 57,734
============== ==============
Net income per common share $ .005 .22
============== ==============
Weighted average number of shares outstanding 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>
Three Months Ended
October 31,
1996 1995
(Unaudited) (Unaudited)
---------------- ------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 1,325 57,734
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 7,951 4,800
Deferred income taxes - 13,500
Changes in operating assets and liabilities:
Accounts receivable 53,193 (43,817)
Inventories (164,446) (87,282)
Prepaid expenses and other assets (26,824) 2,160
Deposits 1,148 -
Accounts payable and accrued expenses 24,544 63,572
---------------- ------------
Net cash provided by operating activities (103,109) 10,667
---------------- ------------
Cash flows from investing activities
Increase in short-term investments - (4,413)
Purchase of property and equipment (13,351) (885)
---------------- ------------
Net cash used in investing activities (13,351) (5,298)
---------------- ------------
Increase (decrease) in cash and cash equivalents (116,460) 5,369
Cash and cash equivalents - Beginning of period 426,320 100,298
---------------- ------------
Cash and cash equivalents - End of period $ 309,860 105,667
================ ============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
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, results of operations and cash
flows for the three-month periods ended October 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.
(1) SALES TO MAJOR CUSTOMERS
During the three months ended October 31, 1996 and 1995, no
customer accounted for more than 10% of total revenues.
7
<PAGE> 8
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
Working capital amounted to $1,566,708 at October 31, 1996 as compared
to $1,569,635 at July 31, 1996. Cash and short term investments amounted to
$658,110 at October 31, 1996 as compared to $774,570 at July 31, 1996. As more
fully described under the Company's Statements of Cash Flows" in the
accompanying financial statements, net cash was used in operating activities
for the three months ended October 31, 1996 and net cash was provided by
operating activities for the three months ended October 31, 1995. For the
three months ended October 31, 1996, net cash was used in operating activities
primarily due to a substantial increase in inventories partially offset by a
reduction in accounts receivable. For the three months ended October 31, 1995,
the cash flow from operating activities was primarily due to the Company's net
income and increases in accounts payable and accrued expenses and deferred
income taxes partially offset by increases in accounts receivable and
inventories. During the three months ended October 31, 1996 and 1995, net cash
was used in investing activities due to the purchase of short term investments
and/or property and equipment.
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 1997
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 October 31, 1996 were $869,364, a
decrease of $62,381 or approximately 7% from the comparable period of the prior
year. During the three months ended October 31, 1996 and October 31, 1995, no
customer accounted for more than 10% of total revenues. The decrease in sales
for the three months ended October 31, 1996 was primarily due to the Company's
move to its new facility in Sanford, Florida and a reduction in sales from
existing customers. The Company's gross margin for the three months ended
October 31, 1996 decreased by approximately 2% as compared to the comparable
period of the prior year due to changes in the mix of product sales and
increased product costs.
Operating (selling, general and administrative) expenses, when
expressed as a percentage of net sales increased from 20.7% for the three
months ended October 31, 1995 to 26.6% for the three months ended October 31,
1995. This increase was primarily due to the 7% reduction in the Company's
sales and a small increase in certain administrative costs. During the past
three years and the three months ended October 31, 1996, the Company did not
charge its operations with any research and development costs.
Net income for the three months ended October 31, 1996 and 1995 was
$1,325 and $57,734, respectively. In order to increase
8
<PAGE> 9
sales and net income, the Company intends to do additional direct mailing,
advertising and promotion of its products.
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 of Operations
27 Financial Data Schedule (For SEC use only)
(b) During the quarter ended October 31, 1996 no report
on Form 8-K was filed or required to be filed.
9
<PAGE> 10
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: December 12, 1996
/s/ Jerrold Lazarus
---------------------------------
Jerrold Lazarus
(Chairman of the Board, Chief
Executive Officer, Chief Accounting
and Financial Officer and Treasurer)
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 658,110
<SECURITIES> 0
<RECEIVABLES> 410,994
<ALLOWANCES> 22,006
<INVENTORY> 605,032
<CURRENT-ASSETS> 1,698,837
<PP&E> 201,269
<DEPRECIATION> 86,073
<TOTAL-ASSETS> 2,023,268
<CURRENT-LIABILITIES> 132,129
<BONDS> 0
0
0
<COMMON> 6,032
<OTHER-SE> 1,885,107
<TOTAL-LIABILITY-AND-EQUITY> 2,023,268
<SALES> 869,364
<TOTAL-REVENUES> 877,505
<CGS> 644,995
<TOTAL-COSTS> 874,080
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,100
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,325
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,325
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,325
<EPS-PRIMARY> .005
<EPS-DILUTED> .005
</TABLE>
