<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, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-13011
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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)
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
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(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 .
----- -----
262,092 Common Shares, $.0001 par value were issued and outstanding at March
7, 1997.
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<PAGE>
TNR TECHNICAL, INC.
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
January 31, 1997 (Unaudited)
and July 31, 1996 3-4
Statements of Operations
Three and Six Months ended
January 31, 1997 and
January 31, 1996 (Unaudited) 5
Statements of Cash Flows
Six Months ended January 31, 1997
and January 31, 1996 (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 10
SIGNATURES 10
2
<PAGE>
TNR TECHNICAL, INC.
Balance Sheets
ASSETS
<TABLE>
<CAPTION>
July 31, January 31,
1996 1997
(Unaudited)
--------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 426,320 11,625
Short-term investments 348,250 632,936
Accounts receivable - trade, less allowance
for doubtful accounts 442,181 476,034
Income taxes receivable 1,685 2,307
Inventories 440,586 669,673
Prepaid expenses and other current assets 5,198 39,440
Deferred income taxes 13,000 6,000
---------- ----------
Total current assets 1,677,220 1,838,015
Deferred income taxes 197,000 197,000
Property and equipment, at cost, net of accumulated
depreciation and amortization 109,796 116,875
Deposits 13,383 12,714
---------- ----------
$1,997,399 2,164,604
========== ==========
</TABLE>
(Continued)
3
<PAGE>
TNR TECHNICAL, INC.
Balance Sheets, Continued
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
July 31, January 31,
1996 1997
(Unaudited)
----------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 61,077 178,897
Accrued expenses and taxes 46,508 63,462
----------- ----------
Total current liabilities 107,585 242,360
----------- ----------
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) (528,583)
Treasury stock; 39,393 shares at cost (194,270) (195,206)
----------- ----------
Total shareholders' equity 1,889,814 1,922,244
----------- ----------
$ 1,997,399 2,164,604
=========== ==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
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TNR TECHNICAL, INC.
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Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31, January 31,
1996 1997 1996 1997
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 972,791 951,003 1,842,155 1,882,748
--------- ------- --------- ---------
Costs and expenses:
Cost of goods sold 722,133 701,488 1,367,128 1,372,461
Selling, general and administrative 216,975 214,029 448,160 406,942
--------- ------- --------- ---------
939,108 915,517 1,815,288 1,779,403
--------- ------- --------- ---------
Operating income 33,683 35,486 26,867 103,345
Non-operating revenue (expense)
Interest income 7,858 7,570 15,999 14,945
--------- ------- --------- ---------
Income before income taxes 41,541 43,056 42,866 118,290
Provision for income taxes 9,500 15,800 9,500 33,300
--------- ------- --------- ---------
Net income $ 32,041 27,256 33,366 84,990
========= ======= ========= =========
Net income per common share $ .12 .10 .13 .32
========= ======= ========= =========
Weighted average number of shares outstanding 262,422 262,305 262,422 262,355
========= ======= ========= =========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
TNR TECHNICAL, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended
January 31,
1997 1996
(Unaudited) (Unaudited)
--------------------------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 33,366 84,990
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 15,903 9,600
Deferred income taxes 7,000 27,000
Changes in operating assets and liabilities:
Accounts receivable (33,853) (92,569)
Income taxes receivable (622) -
Inventories (229,087) 69,187
Prepaid expenses and other assets (33,573) (20,921)
Accounts payable and accrued expenses 134,775 (34,257)
--------- --------
Net cash provided by (used in)
operating activities (106,091) 43,030
--------- --------
Cash flows from investing activities
Purchases of short-term investments (982,822) (705,685)
Maturities of short-term investments 698,136 700,835
Purchase of property and equipment (22,982) (1,760)
Purchase of treasury stock (936) --
--------- --------
Net cash used in investing activities (308,604) (6,610)
--------- --------
Increase (decrease) in cash and cash equivalents (414,695) 36,420
Cash and cash equivalents - Beginning of period 426,320 100,298
--------- --------
Cash and cash equivalents - End of period $ 11,625 136,718
========= ========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
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, 1997, and results of operations and cash flows for the three and
six month periods ended January 31, 1997 and 1996. 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, 1997 and 1996, no customer accounted
for more than 10% of total revenues.
(3) Inventories
Inventories consist of the following:
July 31, January 31,
1996 1997
(Unaudited)
---------------------------
Finished goods $430,061 645,719
Work in process -- 12,500
Purchased parts and materials 10,525 11,454
-------- -------
$440,586 669,673
======== =======
7
<PAGE>
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
Working capital amounted to $1,595,655 at January 31, 1997 as compared
to $1,569,635 at July 31, 1996. Cash and short term investments amounted to
$644,561 at January 31, 1997 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 provided by (used in) operating activities for
the six months ended January 31, 1997 and 1996 was ($106,091) and $43,030,
respectively. For the six months ended January 31, 1997, cash was used in
operating activities as a result of increases in inventories, accounts
receivable and prepaid expenses partially offset by the Company's net income and
increases in payables and accrued expenses. The substantial increase in
inventory is primarily due to low inventory levels at July 31, 1996 in
anticipation of the Company's move to its new facilities in Sanford, Florida in
the summer of 1996. Accounts payable and accrued expenses increased
substantially during this period as a result of increased inventory purchases.
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. The increase in accounts receivable and
decrease in inventories was due primarily to increased sales of the Company's
products during this period. During the six months ended January 31, 1997 and
1996, cash was used in investing activities to fund purchases of property and
equipment and to increase its investment in short term investment vehicles.
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 January 31, 1997 were $972,791, an
increase of $21,788 or approximately 2% from the comparable period of the prior
year. The increase in sales for the three months ended January 31, 1997 was
primarily due to increases in sales to existing and new customers. During the
six months ended January 31, 1997, net sales were $1,842,155, a decrease of
$40,593 or approximately 21% from the comparable period of the prior year. The
decrease in sales for the six months ended January 31, 1997 resulted primarily
from the Company's move to Sanford, Florida and a reduction in sales from
existing customers. During the three months ended January 31, 1997 and January
31, 1996, no customer accounted for more than 10% of total revenues. The
Company's gross margin for the three months ended January 31, 1997 remained
relatively unchanged from the comparable period of the prior year. The Company's
gross margin for the six months ended January 31, 1997 decreased by
approximately 1% as compared to the comparable period of the prior year
primarily due to changes in the mix of product sales.
Operating (selling, general and administrative) expenses when expressed
as a percentage of net sales remained relatively constant for the three months
ended January 31, 1997 as compared to the comparable period of the prior year.
Operating expenses, when expressed as a percentage of net sales increased
approximately 2.5% for the six months ended January 31, 1997 from the comparable
period of the prior year. The increase was due primarily to a reduction in sales
and an increase in administrative office costs. During the past three years, the
Company did not charge its operations with any research and development costs.
Net income for the three months ended January 31, 1997 was $32,041 as
compared to $27,256 for the comparable period of the prior year. Net income for
the six months ended January 31, 1997 was $33,366 as compared to $84,990 for the
comparable period of the prior year.
8
<PAGE>
Management of TNR Technical, Inc. has received a number of comments
from its odd lot stockholders regarding the costs associated with the 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.
9
<PAGE>
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
(b) During the quarter ended January 31, 1997 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 13, 1997
/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
<CIK> 0000723615
<NAME> TNR TECHNICAL, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> NOV-01-1996
<PERIOD-END> JAN-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 644,561
<SECURITIES> 0
<RECEIVABLES> 487,116
<ALLOWANCES> 11,082
<INVENTORY> 669,673
<CURRENT-ASSETS> 1,838,015
<PP&E> 201,774
<DEPRECIATION> 84,899
<TOTAL-ASSETS> 2,164,604
<CURRENT-LIABILITIES> 242,360
<BONDS> 0
0
0
<COMMON> 6,032
<OTHER-SE> 1,916,212
<TOTAL-LIABILITY-AND-EQUITY> 2,164,604
<SALES> 972,791
<TOTAL-REVENUES> 980,649
<CGS> 722,133
<TOTAL-COSTS> 937,008
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,100
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 41,541
<INCOME-TAX> 9,500
<INCOME-CONTINUING> 32,041
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,041
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
