<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 31,1999
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 ___.
---
260,918 Common Shares, $.02 par value were issued and outstanding at October 31,
1999.
<PAGE>
TNR TECHNICAL, INC.
Index
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
October 31, 1999 (Unaudited)
and July 31, 1999 1
Statements of Operations
Three months ended
October 31, 1999 (Unaudited) and
October 31, 1998 (Unaudited) 2
Statements of Cash Flows
Three months ended
October 31, 1999 (Unaudited) and
October 31, 1998 (Unaudited) 3
Notes to Financial Statements (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, 1999
July 31, 1999 (Unaudited)
-------------- ----------------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 1,075,161 1,238,991
Accounts receivable - trade, less allowance for doubtful
accounts of $34,529 and $25,882 693,032 861,362
Inventories 1,062,043 1,015,553
Prepaid expenses and other current assets 7,410 18,153
Deferred income taxes 35,000 35,000
----------- -----------
Total current assets 2,872,646 3,169,059
Property and equipment, at cost, net of accumulated
depreciation and amortization 148,157 140,450
Deposits 13,612 13,612
----------- -----------
Total assets $ 3,034,415 3,323,121
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 211,346 320,013
Accrued expenses 108,714 119,094
Income taxes payable 110,000 105,000
Current installments of note payable 12,249 12,488
----------- -----------
Total current liabilities 442,309 556,595
----------- -----------
Note payable, excluding current installments 5,390 2,177
----------- -----------
Total liabilities 447,699 558,772
----------- -----------
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 142,956 321,239
Treasury stock - 40,663 and 40,793 shares, respectively (202,273) (202,923)
----------- -----------
Total shareholders' equity 2,586,716 2,764,349
----------- -----------
$ 3,034,415 3,323,121
=========== ===========
See accompanying notes to financial statements.
</TABLE>
1
<PAGE>
TNR TECHNICAL, INC.
Statements of Operations
Three Months Ended
October 31,
1999 1998
(Unaudited) (Unaudited)
----------- -----------
Revenues: $ 2,136,001 $ 1,395,257
----------- -----------
Net sales
Costs and expenses:
Cost of goods sold 1,541,215 1,010,430
Selling, general and administrative 320,389 280,300
----------- -----------
1,861,604 1,290,730
----------- -----------
Operating income 274,397 104,527
Non-operating revenue (expense):
Interest income 13,886 7,199
Net unrealized losses on short term investments -- (14,149)
----------- -----------
Income before income taxes 288,283 97,577
Provision for income taxes 110,000 33,000
----------- -----------
Net income $ 178,283 $ 64,577
=========== ===========
Net income per share $ 0.68 $ 0.25
=========== ===========
Weighted average number of shares outstanding 260,879 261,907
=========== ===========
See accompanying notes to financial statements.
2
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TNR TECHNICAL, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended
October 31,
1999 1998
(Unaudited) (Unaudited)
----------- -----------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 178,283 $ 64,577
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 10,118 13,095
Deferred income taxes -- 27,000
Provision for bad debt 2,100 2,100
Net unrealized loss on short term investments -- 14,149
Changes in operating assets and liabilities:
Accounts receivable (170,430) (22,039)
Purchases of short term investments -- (50,033)
Deposits -- 144
Inventories 46,490 22,607
Prepaid expenses and other assets (10,743) (11,243)
Income taxes receivable/payable (5,000) (12,183)
Accounts payable and accrued expenses 119,047 72,391
----------- -----------
Net cash provided by (used in) operating activities 169,865 120,565
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (2,411) (6,281)
----------- -----------
Net cash used in investing activities (2,411) (6,281)
----------- -----------
Cash flows from financing activities:
Purchase of treasury stock (650) (556)
Principal payments on note payable (2,974) (2,753)
----------- -----------
Net cash used in financing activities (3,624) (3,309)
----------- -----------
Increase (decrease) in cash and cash equivalents 163,830 110,975
Cash and cash equivalents beginning of period 1,075,161 597,683
----------- -----------
Cash and cash equivalents - end of period $ 1,238,991 $ 708,658
=========== ===========
</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,
1999, and results of operations and cash flows for the three month period ended
October 31, 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 three months ended October 31, 1999 and 1998, no customer accounted
for more than 10% of total revenue.
(3) Inventories
Inventories consist of the following:
October 31, 1999
July 31, 1999 (Unaudited)
------------- ----------------
Finished goods $1,031,244 986,102
Purchased parts and materials 30,799 29,451
---------- ---------
$1,062,043 1,015,553
========== =========
4
<PAGE>
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
Working capital amounted to $2,612,464 at October 31, 1999 as compared
to $2,430,337 at July 31, 1999. Cash and short term investments amounted to
$1,238,991 at October 31, 1999 as compared to $1,075,161 at July 31, 1999. As
more fully described under the Company's statements of cash flows in the
accompanying financial statements, net cash was provided by operating activities
for the three months ended October 31, 1999. For this period, cash was provided
primarily due to the Company's net income and increases in accounts payable and
accrued expenses as well as decreases in inventories partially offset by
increases in accounts receivable. For the three months ended October 31, 1998,
cash was provided by operating activities as a result of the Company's net
income plus decreases in inventories and increases in accounts payable and
accrued expenses partially offset by an increase in accounts receivable and
short-term investments. During the three months ended October 31, 1999 and 1998,
cash was used in investing activities to purchase property and equipment. During
the three months ended October 31, 1999 and 1998, cash was used in financing
activities to make principal payments on a note payable and to purchase treasury
stock.
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 2000
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, 1999.
Results of Operations
Net sales for the three months ended October 31,1999 were $2,136,001,
an increase of $740,744 or approximately 53% from the comparable period of the
prior year. The increase in sales for the three months ended October 31,1999 was
primarily due to increases in sales to existing and new customers. During the
three months ended October 31, 1999 and 1998, no customer accounted for more
than 10% of total revenues. The Company's gross margin for the three months
ended October 31, 1999 and October 31, 1998 remained relatively unchanged.
Operating (selling, general and administrative) expenses when expressed
as a percentage of net sales for the three months ended October 31, 1999 was 15%
as compared to 20% for the comparable period of the prior year. 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, 1999 was $178,283 as
compared to $64,577 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, 1999, the Company did not
have any meeting of stockholders. However, on December 10, 1999, the Registrant
held its annual meeting of stockholders at which time the stockholders reelected
the incumbent directors, namely, Jerrold Lazarus, Norman Thaw, Wayne Thaw,
Kathie Thaw, Mitchell Thaw and Patrick Hoscoe for a period of one year and until
their successors are elected and shall qualify.
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, 1999, 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 14, 1999
By /s/ Jerrold Lazarus
----------------------------------------
Jerrold Lazarus (Chairman of the Board,
Chief Executive Officer, Chief Accounting
and Financial Officer and Treasurer)
8
<TABLE> <S> <C>
<ARTICLE> 5
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> AUG-01-1999
<PERIOD-END> OCT-31-1999
<EXCHANGE-RATE> 1
<CASH> 1,238,991
<SECURITIES> 0
<RECEIVABLES> 887,244
<ALLOWANCES> 25,882
<INVENTORY> 1,015,553
<CURRENT-ASSETS> 3,169,059
<PP&E> 312,723
<DEPRECIATION> 172,323
<TOTAL-ASSETS> 3,034,415
<CURRENT-LIABILITIES> 442,309
<BONDS> 0
0
0
<COMMON> 6,032
<OTHER-SE> 2,580,684
<TOTAL-LIABILITY-AND-EQUITY> 3,034,415
<SALES> 2,136,001
<TOTAL-REVENUES> 2,149,887
<CGS> 1,541,215
<TOTAL-COSTS> 1,859,504
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,100
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 288,283
<INCOME-TAX> 110,000
<INCOME-CONTINUING> 178,283
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 178,283
<EPS-BASIC> 0.68
<EPS-DILUTED> 0.68
</TABLE>
