<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 October 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 ____________________
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 11-25652Q2
- --------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
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 _____
261,998 Common Shares, $.0001 par value were issued and outstanding at October
31, 1997.
<PAGE>
TNR TECHNICAL, INC.
Index
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
October 31, 1997 (Unaudited)
and July 31, 1997 1
Statements of Operations
Three months ended
October 31, 1997 (Unaudited) and
October 31, 1996 (Unaudited) 2
Statements of Cash Flows
Three months ended
October 31, 1997 (Unaudited) and
October 31, 1996 (Unaudited) 3
Notes to Financial Statement (Unaudited) 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II. OTHER INFORMATION 7
SIGNATURES 8
<PAGE>
TNR TECHNICAL, INC.
Balance Sheets
<TABLE>
<CAPTION>
Assets
October 31, 1997
July 31,1997 (Unaudited)
------------ -----------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 528,436 379,037
Short-term investments 28,032 51,266
Accounts receivable - trade, less allowance for doubtful
accounts of $14,860 and $18,027 574,939 626,182
Income taxes receivable 1,360 --
Inventories 782,389 969,817
Prepaid expenses and other current assets 33,717 37,324
Deferred income taxes 17,000 23,000
----------- -----------
Total current assets 1,965,873 2,086,626
Deferred income taxes 162,000 148,500
Property and equipment, at cost, net of accumulated depreciation and
amortization 122,856 126,172
Deposits 14,394 18,394
----------- -----------
Total assets $ 2,265,123 2,379,692
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 196,114 292,917
Accrued expenses 92,258 84,494
Income taxes payable -- 1,240
----------- -----------
Total current liabilities 288,372 378,651
----------- -----------
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 (473,248) (448,958)
Treasury stock - 39,600 shares (196,034) (196,034)
----------- -----------
Total shareholders' equity 1,976,751 2,001,041
----------- -----------
$ 2,265,123 2,379,692
=========== ===========
</TABLE>
See accompanying notes to financial statements
1
<PAGE>
TNR TECHNICAL, INC.
Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended
October 31,
1997 1996
(Unaudited) (Unaudited)
---------- ----------
<S> <C> <C>
Revenues:
Net sales $1,347,403 869,364
---------- ----------
Costs and expenses:
Cost of goods sold 1,048,621 644,995
Selling, general and administrative 268,174 231,185
---------- ----------
1,316,795 876,180
---------- ----------
Operating income 30,608 (6,816)
Non-operating revenue (expense):
Interest income 3,782 8,141
---------- ----------
Income before income taxes 34,390 1,325
Provision for income taxes 10,100 --
---------- ----------
Net income $ 24,290 1,325
========== ==========
Net income per share $ .09 .005
========== ==========
Weighted average number of shares outstanding 261,981 262,422
========== ==========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
TNR TECHNICAL, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended
October 31,
1997 1996
(Unaudited) (Unaudited)
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 24,290 1,325
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 8,526 7,951
Deferred income taxes 7,500 --
Provision for bad debt 2,100 --
Net unrealized loss on short term investments 1,758 --
Changes in operating assets and liabilities:
Accounts receivable (53,343) 53,193
Purchases of short term investments (24,992) --
Deposits (4,000) 1,148
Inventories (187,428) (164,446)
Prepaid expenses and other assets (3,607) (26,824)
Income taxes receivable/payable 2,600 --
Accounts payable and accrued expenses 89,039 24,544
--------- ---------
Net cash used in operating activities (137,557) (103,109)
--------- ---------
Cash flows from investing activities :
Purchase of property and equipment (11,842) (13,351)
--------- ---------
Net cash used in investing activities (11,842) (13,351)
--------- ---------
Decrease in cash and cash equivalents (149,399) (116,460)
Cash and cash equivalents - beginning of period 528,436 426,320
--------- ---------
Cash and cash equivalents - end of period $ 379,037 309,860
========= =========
</TABLE>
See accompanying notes to financial statements.
3
<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 October 31, 1997, and results of operations and cash flows
for the three month periods ended October 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 three months ended October 31, 1997 and 1996, no customer
accounted for more than 10% of total revenue.
(3) Inventories
Inventories consist of the following:
October 31, 1997
July 31, 1997 (Unaudited)
------------- ---------------
Finished goods $763,313 921,326
Purchased parts and materials 18,776 48,491
-------- --------
$782,389 969,817
======== ========
4
<PAGE>
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
Working capital amounted to $1,707,975 at October 31, 1997 as compared to
$1,677,501 at July 31, 1997. Cash and short term investments amounted to
$430,303 at October 31, 1997 as compared to $556,468 at July 31, 1997. 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, 1997 and 1996 was $(137,557) and $(103,109),
respectively. For the three months ended October 31, 1997, cash was used in
operating activities as a result of increases in inventories, accounts
receivable, purchase of short term investments and prepaid expenses partially
offset by the Company's net income and increases in payables and accrued
expenses. For the three months ended October 31, 1996, cash was used in
operating activities as a result of increases in inventories and prepaid
expenses partially offset by a decrease in accounts receivable and an increase
in accounts payable and accrued expenses. During the three months ended October
31, 1997 and 1996, cash was used in investing activities to purchase 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 1998
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 as of October 31, 1997.
Results of Operations
Net sales for the three months ended October 31, 1997 were $1,347,403 an
increase of $478,039 or approximately 55% from the comparable period of the
prior year. The increase in sales for the three months ended October 31,1997
was primarily due to increases in sales to existing and new customers. During
the three months ended October 31, 1997 and 1996, no customer accounted for
more than 10% of total revenues. The Company's gross margin for the three
months ended October 31, 1997 decreased by approximately 3.6% as compared to the
comparable period of the prior year primarily due to changes in the mix of
product sales. The Company closed its retail store in April 1997 in order to
concentrate its resources on value added battery packs and wholesale customers.
Operating (selling, general and administrative) expenses when expressed
as a percentage of net sales decreased for the three months ended October 31,
1997 as compared to the comparable period of the prior year due primarily to
increased sales. 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 October 31, 1997 was $24,290 as
compared to $1,325 for the comparable period of the prior year.
5
<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 Common Stock from odd lot holders (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.
6
<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:
During the quarter ended October 31, 1997, the Company did not
have any meeting of stockholders. However, on December 9, 1997, the Registrant
held its annual meeting of stockholders at which time the stockholders reelected
the incumbent directors, namely, Jerrold Lazarus, Norman Thaw, Wayne Thaw and
Kathie Thaw for a period of one year and until their successors are elected and
shall qualify. Jerrold Lazarus received 189,361 votes in favor and 3,285
votes against. Norman Thaw received 192,419 votes in favor and 735 votes
against. Wayne Thaw received 192,569 votes in favor and 585 votes against.
Kathie Thaw received 136,258 votes in favor and 56,866 against.
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 October 31, 1997 no report on
Form 8-K was filed or required to be filed.
7
<PAGE>
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 15, 1997
/s/ Jerrold Lazarus
---------------------------------------------
Jerrold Lazarus (Chairman of the Board,
Chief Executive Officer, Chief Accounting
and Financial Officer and Treasurer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> AUG-01-1997
<PERIOD-END> OCT-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 430,303
<SECURITIES> 0
<RECEIVABLES> 644,209
<ALLOWANCES> 18,027
<INVENTORY> 969,817
<CURRENT-ASSETS> 2,086,626
<PP&E> 241,357
<DEPRECIATION> 115,185
<TOTAL-ASSETS> 2,379,692
<CURRENT-LIABILITIES> 378,651
<BONDS> 0
0
0
<COMMON> 6,032
<OTHER-SE> 1,995,009
<TOTAL-LIABILITY-AND-EQUITY> 2,379,692
<SALES> 1,347,403
<TOTAL-REVENUES> 1,351,185
<CGS> 1,048,621
<TOTAL-COSTS> 1,316,795
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,100
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 34,390
<INCOME-TAX> 10,100
<INCOME-CONTINUING> 24,290
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,290
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0.09
</TABLE>
