<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, 2000
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.
------------------------------------------
(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 .
--- ---
259,905 Common Shares, $.02 par value were issued and outstanding at January 31,
2000.
<PAGE>
TNR TECHNICAL, INC.
Index
Page
Number
------
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
January 31, 2000 (Unaudited)
and July 31, 1999 3-4
Statements of Operations
Three and six months ended
January 31, 2000 (Unaudited) and
January 31, 1999 (Unaudited) 5
Statements of Cash Flows
Six months ended
January 31, 2000 (Unaudited) and
January 31, 1999 (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
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TNR TECHNICAL, INC.
Balance Sheets
Assets
<TABLE>
<CAPTION>
January 31, 2000
July 31, 1999 (Unaudited)
------------- ----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $1,075,161 244,592
Short-term investments -- 962,725
Accounts receivable - trade, less allowance for doubtful
accounts of $34,529 and $28,765 693,032 929,701
Income taxes receivable -- --
Inventories 1,062,043 1,306,672
Prepaid expenses and other current assets 7,410 14,668
Deferred income taxes 35,000 40,000
---------- ----------
Total current assets 2,872,646 3,498,358
Property and equipment, at cost, net of accumulated
depreciation and amortization 148,157 110,814
Deposits 13,612 13,428
---------- ----------
Total assets $3,034,415 3,622,600
========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
TNR TECHNICAL, INC.
Balance Sheets
Liabilities and Shareholders' Equity
<TABLE>
<CAPTION>
January 31, 2000
July 31, 1999 (Unaudited)
------------- ----------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 211,346 447,778
Accrued expenses 108,714 142,674
Income taxes payable 110,000 121,000
Current installments of note payable 12,249 11,633
----------- -----------
Total current liabilities 442,309 723,085
----------- -----------
Note payable, excluding current installments 5,390 --
----------- -----------
Total liabilities 447,699 723,085
----------- -----------
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 142,956 461,213
Treasury stock - 40,663 and 41,676 shares (202,273) (207,731)
----------- -----------
Total shareholders' equity 2,586,716 2,899,515
----------- -----------
$ 3,034,415 3,622,600
=========== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
TNR TECHNICAL, INC.
Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31, January 31,
1999 2000 1999 2000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------------------------- --------------------------------
<S> <C> <C> <C> <C>
Revenues: $1,433,599 2,058,093 2,828,856 4,194,094
---------- ---------- ---------- ----------
Net sales
Costs and expenses:
Cost of goods sold 1,047,754 1,515,477 2,058,184 3,056,692
Selling, general and administrative 258,134 325,380 538,434 645,769
---------- ---------- ---------- ----------
1,305,888 1,840,857 2,596,618 3,702,461
---------- ---------- ---------- ----------
Operating income 127,711 217,236 232,238 491,633
Non-operating revenue (expense):
Interest income 10,539 15,738 17,738 29,624
Net unrealized gain (loss) on
short-term investments 8,913 -- (5,236) --
---------- ---------- ---------- ----------
Income before income taxes 147,163 232,974 244,740 521,257
Provision for income taxes 58,000 93,000 91,000 203,000
---------- ---------- ---------- ----------
Net income $ 89,163 139,974 153,740 318,257
========== ========== ========== ==========
Net income per share $ 0.34 0.54 0.59 1.22
========== ========== ========== ==========
Weighted average number of shares outstanding 261,817 260,352 261,864 260,591
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
TNR TECHNICAL, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended
January 31,
1999 2000
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 153,740 318,257
Adjustments to reconcile net income to net cash
provide by operating activities:
Depreciation and amortization 26,189 17,811
Deferred income taxes 72,000 (5,000)
Loss on disposition of property and equipment -- 21,943
Net unrealized loss on short term investments 5,236 --
Changes in operating assets and liabilities:
Purchases of short term investments (50,033) (962,725)
Sale of short term investments 129,414 --
Accounts receivable (2,777) (236,669)
Income taxes receivable/payable (14,037) 11,000
Inventories (23,436) (244,629)
Prepaid expenses and other assets (2,885) (7,074)
Accounts payable and accrued expenses 140,334 270,392
----------- -----------
Net cash provided by (used in)
operating activities 433,745 (816,694)
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (6,281) (2,411)
----------- -----------
Net cash used in investing activities (6,281) (2,411)
----------- -----------
Cash flows from financing activities:
Purchase of treasury stock (1,317) (5,458)
Payment of principal on note payable (5,559) (6,006)
----------- -----------
Net cash used in financing activities (6,876) (11,464)
----------- -----------
(Decrease) increase in cash and cash equivalents 420,588 (830,569)
Cash and cash equivalents - beginning of period 597,683 1,075,161
----------- -----------
Cash and cash equivalents - end of period $ 1,018,271 244,592
=========== ===========
</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, 2000, and results of operations and cash flows
for the three and six month periods ended January 31, 2000 and 1999. 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 six months ended January 31, 2000 and 1999, no customer
accounted for more than 10% of total revenue.
(3) Inventories
Inventories consist of the following:
January 31, 2000
July 31, 1999 (Unaudited)
------------- ----------------
Finished goods $1,031,244 1,268,779
Purchased parts and materials 30,799 37,893
------------- ----------------
$1,062,043 1,306,672
============= ================
7
<PAGE>
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
Working capital amounted to $2,775,273 at January 31, 2000 as compared
to $2,430,337 at July 31, 1999. Cash and short term investments amounted to
$1,207,317 at January 31, 2000 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 provided by operating activities for
the six months ended January 31, 2000 and 1999 was $(816,694) and $433,745,
respectively. For the six months ended January 31, 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 and accrued expenses, partially
offset by purchases of short-term investments and increases in inventories. For
the six months ended January 31, 2000, cash was used in operating activities as
a result of the Company's purchase of short-term investments of $962,725 and
increases in inventories and accounts receivable partially offset by the
Company's net income and increases in accounts payable and accrued expenses.
During the six months ended January 31, 2000 and 1999, cash was used in
investing activities to acquire additional 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 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 January 31, 2000.
Results of Operations
Net sales for the three months ended January 31, 2000 were $2,058,093,
an increase of $624,494 or approximately 44% from the comparable period of the
prior year. Net sales for the six months ended January 31, 2000 were $4,194,094,
an increase of $1,365,238 or approximately 48% from the comparable period of the
prior year. The increases in sales for the three and nine months ended January
31,2000 was primarily due to increases in sales to existing and new customers.
During the three months ended January 31, 2000 and January 31, 1999, no customer
accounted for more than 10% of total revenues. The Company's gross margin for
the three months and six months ended January 31, 2000 and January 31, 1999
remained relatively unchanged.
Operating (selling, general and administrative) expenses when expressed
as a percentage of net sales for the three months ended January 31, 2000 was 16%
as compared to 18% for the comparable period of the prior year. Operating
(selling, general and administrative) expenses when expressed as a percentage of
net sales for the six months ended January 31, 2000 was 15% as compared to 19%
for the comparable period
8
<PAGE>
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 January 31, 2000 was $139,974 as
compared to $89,163 for the comparable period of the prior year. Net income for
the six months ended January 31, 2000 was $318,257 as compared to $153,740 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:
----------------------------------------------------
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. The Company also approved a new stock option plan covering
30,000 shares by a vote of 161,838 shares in favor of the Plan, 16,008 shares
were against the Plan, 867 shares abstained and 53,111 shares were unvoted.
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 31,2000, 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: March 9, 2000
By /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-31-2000
<PERIOD-START> NOV-01-1999
<PERIOD-END> JAN-31-2000
<EXCHANGE-RATE> 1
<CASH> 224,592
<SECURITIES> 962,725
<RECEIVABLES> 958,466
<ALLOWANCES> 28,765
<INVENTORY> 1,306,672
<CURRENT-ASSETS> 3,498,358
<PP&E> 224,146
<DEPRECIATION> 113,332
<TOTAL-ASSETS> 3,622,600
<CURRENT-LIABILITIES> 723,085
<BONDS> 0
0
0
<COMMON> 6,032
<OTHER-SE> 2,893,483
<TOTAL-LIABILITY-AND-EQUITY> 3,622,600
<SALES> 2,058,093
<TOTAL-REVENUES> 2,073,831
<CGS> 1,515,477
<TOTAL-COSTS> 1,836,657
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 4,200
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 232,974
<INCOME-TAX> 93,000
<INCOME-CONTINUING> 139,974
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 139,974
<EPS-BASIC> 0.54
<EPS-DILUTED> 0.54
</TABLE>
