<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, 1999
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)
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
----- -----
261,849 Common Shares, $.0001 par value were issued
and outstanding at April 30, 1999.
---------------------------------------------------
<PAGE>
TNR TECHNICAL, INC.
Index
Page
Number
------
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
April 30, 1999 (Unaudited)
and July 31, 1998 3-4
Statements of Operations
Three and nine months ended
April 30, 1999 (Unaudited) and
April 30, 1998 (Unaudited) 5
Statements of Cash Flows
Nine months ended
April 30, 1999 (Unaudited) and
April 30, 1998 (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
<PAGE>
TNR TECHNICAL, INC.
Balance Sheets
Assets
<TABLE>
<CAPTION>
April 30, 1999
July 31, 1998 (Unaudited)
-------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 597,683 1,163,707
Short-term investments 167,181 --
Accounts receivable - trade, less allowance for doubtful
accounts of $19,300 and $26,424 599,504 617,816
Income taxes receivable -- --
Inventories 814,605 894,312
Prepaid expenses and other current assets 18,614 10,839
Deferred income taxes 23,000 25,000
---------- ---------
Total current assets 2,220,587 2,711,674
Deferred income taxes 69,000 --
Property and equipment, at cost, net of accumulated
depreciation and amortization 185,361 152,358
Deposits 13,845 13,701
---------- ---------
Total assets $2,488,793 2,877,733
========== =========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
TNR TECHNICAL, INC.
Balance Sheets
Liabilities and Shareholders' Equity
<TABLE>
<CAPTION>
April 30, 1999
July 31, 1998 (Unaudited)
--------------- --------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 88,964 165,730
Accrued expenses 75,220 79,047
Income taxes payable 23,989 80,952
Current installments of note payable 11,338 12,015
----------- ---------
Total current liabilities 199,511 337,744
----------- ---------
Note payable, excluding current installments 17,639 8,540
----------- ---------
Total liabilities 217,150 346,284
----------- ---------
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 (178,236) 86,939
Treasury stock - 39,630 and 39,859 shares (196,154) (201,523)
----------- ---------
Total shareholders' equity 2,271,643 2,531,449
----------- ---------
$ 2,488,793 2,877,733
=========== =========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
TNR TECHNICAL, INC.
Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
April 30, April 30,
1999 1998 1999 1998
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 1,623,471 1,504,369 4,452,327 4,324,826
----------- --------- --------- ---------
Cost and expenses:
Cost of goods sold 1,160,397 1,068,027 3,218,581 3,177,078
Selling, general and administrative 286,550 259,030 824,984 790,306
----------- --------- --------- ---------
1,446,947 1,327,057 4,043,565 3,967,384
----------- --------- --------- ---------
Operating income 176,524 177,312 408,762 357,442
Non-operating revenue (expense):
Interest income 10,942 15,315 28,680 24,042
Net unrealized gain (loss) on
short-term investments (3,031) -- (8,267) --
----------- --------- --------- ---------
Income before income taxes 184,435 192,627 429,175 381,484
Provision for income taxes 73,000 60,000 164,000 118,600
----------- --------- --------- ---------
Net income $ 111,435 132,627 265,175 262,884
=========== ========= ========= =========
Net income per share $ 0.43 0.51 1.01 1.00
=========== ========= ========= =========
Weighted average number of shares
outstanding 261,288 261,981 261,647 261,981
=========== ========= ========= =========
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
TNR TECHNICAL, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Months Ended
April 30,
1999 1998
(Unaudited) (Unaudited)
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income 265,175 262,884
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 39,284 32,324
Deferred income taxes 67,000 95,910
Changes in operating assets and liabilities:
Sale of short term investments 217,214 --
Purchases of short term investments (50,033) (88,788)
Accounts receivables (18,312) (59,040)
Deposits 144 700
Inventories (79,707) (56,171)
Prepaid expenses and other assets 7,775 (6,229)
Income taxes receivable -- 1,360
Accounts payable and accrued expenses 80,593 (94,811)
Income taxes payable 56,963 16,079
--------- -------
Net cash provided by (used in) operating activities 586,096 104,218
--------- -------
Cash flows from investing activities:
Purchase of treasury stock (5,369) --
Purchase of property and equipment (6,281) (81,436)
--------- -------
Net cash provided by (used in) investing activities (11,650) (81,436)
--------- -------
Cash flows from financing activities:
Payment of principal on note payable (8,422) (3,520)
Proceeds from issuance of note payable -- 35,198
--------- -------
Net cash provided by financing activities (8,422) 31,678
--------- -------
Increase in cash and cash equivalents 566,024 54,460
Cash and cash equivalents - beginning of period 597,683 528,436
--------- -------
Cash and cash equivalents - end of period 1,163,707 582,896
========= =======
</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 April 30, 1999, and results of operations and cash flows for
the three and nine month periods ended April 30, 1999 and 1998. The results
of operations are 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, 1999 and 1998, no customer accounted
for more than 10% of total revenue.
(3) Inventories
-----------
Inventories consist of the following:
April 30, 1999
July 31, 1998 (Unaudited)
------------- --------------
Finished goods $790,982 851,386
Purchased parts and materials 23,623 42,926
-------- -------
$814,605 894,312
======== =======
7
<PAGE>
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
- -------------------------------
Working capital amounted to $2,373,930 at April 30, 1999 as compared to
$2,021,076 at July 31, 1998. Cash and short term investments amounted to
$1,163,707 at April 30, 1999 as compared to $764,864 at July 31, 1998. As more
fully described under the Company's statements of cash flows in the accompanying
financial statements, net cash provided by operating activities for the nine
months ended April 30, 1999 and 1998 was $586,096 and $104,218, respectively.
For the nine months ended April 30, 1999, cash was provided by operating
activities as a result of the Company's net income, sale of short-term
investments and increases in accounts payable partially offset by increases in
inventories and accounts receivable. For the nine months ended April 30, 1998,
cash was provided by operating activities due to the Company's net income and
deferred income taxes partially offset by increases in inventories and
receivables and decreases in payables and accrued expenses. The increases in
accounts receivable and in inventories were due primarily to increased sales of
the Company's products during the aforesaid periods. During the nine months
ended April 30, 1999 and April 30, 1998, cash was used primarily 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 1999
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 April 30, 1999.
Results of Operations
- ---------------------
Net sales for the three months ended April 30,1999 were $1,623,471, an
increase of $119,102 or approximately 7.9% from the comparable period of the
prior year. Net sales for the nine months ended April 30, 1999 were $4,452,327,
an increase of $127,501 or approximately 2.9% from the comparable period of the
prior year. These changes in sales for the three and nine months ended April
30,1999 were primarily due to increased sales and changes in sales of product
mix. During the nine months ended April 30, 1999 and 1998, no customer accounted
for more than 10% of total revenues. The Company's gross margin for the three
months ended April 30, 1999 decreased by approximately .5% as compared to the
comparable period of the prior year. The Company's gross margin for the nine
months ended April 30, 1999 increased by approximately 1.2% as compared to the
comparable period of the prior year. The fluctuations in margins discussed
herein resulted primarily from the implementation of an aggressive pricing
strategy beginning in the second quarter of fiscal 1998 and, to a lesser degree,
from changes in product mix.
Operating (selling, general and administrative) expenses when expressed
as a percentage of net sales remained relatively unchanged for the three months
and nine months ended April 30, 1999 as compared to the comparable periods of
the prior year. During the past three years, the Company did not charge its
operations with any research and development costs.
8
<PAGE>
Net income for the three months ended April 30, 1999 was $111,435 as
compared to $132,627 for the comparable period of the prior year. Net income for
nine months ended April 30, 1999 was $265,175 as compared to $262,884 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 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.
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 April 30, 1999 no report on
Form 8-K was filed or required to be filed.
10
<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: June 11, 1999
/s/ Jerrold Lazarus
-----------------------------------------
Jerrold Lazarus (Chairman of the Board,
Chief Executive Officer, Chief Accounting
and Financial Officer and Treasurer)
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> FEB-01-1999
<PERIOD-END> APR-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,163,707
<SECURITIES> 0
<RECEIVABLES> 644,240
<ALLOWANCES> 26,424
<INVENTORY> 894,312
<CURRENT-ASSETS> 2,711,674
<PP&E> 300,280
<DEPRECIATION> 147,922
<TOTAL-ASSETS> 2,877,733
<CURRENT-LIABILITIES> 337,744
<BONDS> 0
0
0
<COMMON> 6,032
<OTHER-SE> 2,525,417
<TOTAL-LIABILITY-AND-EQUITY> 2,531,449
<SALES> 1,623,471
<TOTAL-REVENUES> 1,631,382
<CGS> 1,160,397
<TOTAL-COSTS> 1,440,647
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 6,300
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 184,435
<INCOME-TAX> 73,000
<INCOME-CONTINUING> 111,435
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111,435
<EPS-BASIC> 0.43
<EPS-DILUTED> 0.43
</TABLE>
