<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 April 30, 1997
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
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TNR TECHNICAL, INC.
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(Exact name of Registrant as specified in its charter)
New York 11-2565202
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(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
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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 [ ]
262,026 Common Shares, $.0001 par value were issued and outstanding at April 30,
1997.
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TNR TECHNICAL, INC.
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INDEX
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Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
April 30, 1997 (Unaudited) 3
and July 31, 1996
Statements of Operations
Three and Nine Months ended
April 30, 1997 (Unaudited) and
April 30, 1996 (Unaudited) 4
Statements of Cash Flows
Nine Months ended April 30, 1997 (Unaudited)
and April 30, 1996 (Unaudited) 5
Notes to Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-8
PART II. OTHER INFORMATION 9
SIGNATURES 9
2
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TNR TECBNICAL, INC.
Balance Sheets
Assets
<TABLE>
<CAPTION>
July 31,1996 April 30, 1997
(Unaudited)
----------- ---------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 426,320 663,542
Short-term investments 348,250 24,317
Accounts receivable - trade, less allowance for doubtful
accounts 442,181 545,942
Income taxes receivable 1,685 1,147
Inventories 440,586 556,895
Prepaid expenses and other current assets 5,198 32,924
Deferred income taxes 13,000 13,000
----------- ---------
Total current assets 1,677,220 1,837,767
Deferred income taxes 197,000 172,000
Property and equipment, at cost, net of accumulated
depreciation and amortization 109,796 114,490
Deposits 13,383 12,713
----------- ---------
Total assets $ 1,997,399 2,136,970
=========== =========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 61,077 146,240
Accrued expenses 46,508 23,506
----------- ---------
Total current liabilities 107,585 169,746
----------- ---------
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) (482,891)
Treasury stock - 39,159 and 39,571 shares at July 31,
1996 and April 30, 1997, respectively (194,270) (195,918)
----------- ---------
Total shareholders' equity 1,889,814 1,967,224
----------- ---------
$ 1,997,399 2,136,970
=========== =========
</TABLE>
See accompanying notes to financial statements.
3
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TNR TECHNICAL, INC.
Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
April 30, April 30,
1997 1996 1997 1996
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------------------------------------------------------------
Revenues:
<S> <C> <C> <C> <C>
Net sales $ 1,179,161 942,930 3,021,316 2,825,678
----------- -------- --------- ---------
Costs and expenses:
Cost of goods sold 882,176 685,587 2,249,304 2,058,048
Selling, general and administrative 236,638 193,358 684,798 600,300
----------- -------- --------- ---------
1,118,814 878,945 2,934,102 2,658,348
----------- -------- --------- ---------
Operating income 60,347 63,985 87,214 167,330
Non-operating revenue (expense):
Interest income 6,845 6,721 22,844 21,666
----------- -------- --------- ---------
Income before income taxes 67,192 70,706 110,058 188,996
Provision for income taxes 21,500 27,600 31,000 60,900
----------- -------- --------- ---------
Net income $ 45,692 43,106 79,058 128,096
=========== ======== ========= =========
Net income per share $ .17 .16 .30 .49
=========== ======== ========= =========
Weighted average number of shares
outstanding 262,094 262,422 262,267 262,422
=========== ======== ========= =========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
TNR TECHNICAL, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Months Ended
April 30,
1997 1996
(Unaudited) (Unaudited)
----------- -----------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 79,058 128,096
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 23,855 16,395
Deferred income taxes 25,000 51,000
Changes in operating assets and liabilities:
Accounts receivable (103,761) (25,819)
Deposits 670 --
Inventories (116,309) 207,291
Prepaid expenses and other assets (27,726) (14,924)
Income taxes receivable 538 --
Accounts payable and accrued expenses, 62,161 (173,586)
--------- ----------
Net cash provided by (used in) operating activities (56,514) 188,453
--------- ----------
Cash flows from investing activities :
Purchases of short term investments (1,007,817) (1,047,306)
Maturities of short term investments 1,331,750 1,211,294
Purchase of property and equipment (28,549) (11,704)
Purchase of treasury stock (1,648) -
--------- ----------
Net cash provided by investing activities 293,736 152,284
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Increase in cash and cash equivalents 237,222 340,737
Cash and cash equivalents - beginning of period 426,320 100,298
--------- ----------
Cash and cash equivalents - end of period $ 663,542 441,035
========= ==========
</TABLE>
See accompanying notes to financial statements.
5
<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 April 30, 1997, and results of operations and cash flows for
the three and nine month periods ended April 30, 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 nine months ended April 30, 1997 and 1996, no customer accounted
for more than 10% of total revenue.
(3) Inventories
-----------
Inventories consist of the following:
April 30, 1997
July 31, 1996 (Unaudited)
---------------------------------
Finished goods $430,061 533,895
Work in process - 9,500
Purchased parts and materials 10,525 13,500
-------- -------
$440,586 556,895
======== =======
6
<PAGE>
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
- -------------------------------
Working capital amounted to $1,668,021 at April 30, 1997 as compared to
$1,569,635 at July 31, 1996. Cash and short term investments amounted to
$687,859 at April 30, 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 nine months ended April 30, 1997 and 1996 was $(56,514) and $188,453,
respectively. For the nine months ended April 30, 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 nine months ended April 30, 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 nine months ended April 30, 1997 and
1996, cash was provided by maturities of short term investments 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 April 30,1997 were $1,179,161 an
increase of $236,231 or approximately 25% from the comparable period of the
prior year. The increase in sales for the three months ended April 30,1997 was
primarily due to increases in sales to existing and new customers. During the
nine months ended April 30,1997, net sales were $3,021,316, an increase of
$195,638 or approximately 7% from the comparable period of the prior year. The
increase in sales for the nine months ended April 30, 1997 resulted primarily
from increases in sales to existing and new customers. During the three months
ended April 30,1997 and April 30,1996, no customer accounted for more than 10%
of total revenues. The Company's gross margin for the three and nine months
ended April 30,1997 decreased by approximately 2% as compared to the comparable
periods of the prior year primarily due to changes in the mix of product sales.
The Company closed its retail store in order to concentrate its resources on
value added battery packs and wholesale customers.
7
<PAGE>
Operating (selling, general and administrative) expenses when expressed
as a percentage of net sales remained relatively constant for the three months
ended April 30, 1997 as compared to the comparable period of the prior year.
Operating expenses, when expressed as a percentage of net sales increased
approximately 2% for the nine months ended April 30, 1997 from the comparable
period of the prior year. The increase was due primarily to increases in rent,
advertising and administrative office expenses. 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 April 30, 1997 was $45,692 as
compared to $43,106 for the comparable period of the prior year. Net income for
the nine months ended April 30, 1997 was $79,058 as compared to $128,096 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 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.
8
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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 April 30, 1997 no report on
Form 8-K was filed or required to be filed.
TNR TECHNICAL, INC.
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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: June 13, 1997
/s/ Jerrold Lazarus
-----------------------------------------
Jerrold Lazarus (Chairman of the Board,
Chief Executive Officer, Chief Accounting
and Financial Officer and Treasurer)
9
<TABLE> <S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> FEB-1-1997
<PERIOD-END> APR-30-1997
<CASH> 663,542
<SECURITIES> 24,317
<RECEIVABLES> 558,606
<ALLOWANCES> 12,664
<INVENTORY> 556,895
<CURRENT-ASSETS> 1,837,767
<PP&E> 207,341
<DEPRECIATION> 92,851
<TOTAL-ASSETS> 2,136,970
<CURRENT-LIABILITIES> 169,746
<BONDS> 0
0
0
<COMMON> 6,032
<OTHER-SE> 1,961,192
<TOTAL-LIABILITY-AND-EQUITY> 2,136,970
<SALES> 1,179,161
<TOTAL-REVENUES> 1,186,006
<CGS> 882,176
<TOTAL-COSTS> 1,116,714
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,100
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 67,192
<INCOME-TAX> 21,500
<INCOME-CONTINUING> 45,692
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 45,692
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
