<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
for the quarterly period ended March 31, 1996
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 No. 0-9613
NUCLEAR RESEARCH CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Pennsylvania 1343870
- ---------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of organization) Identification No.)
125 Titus Avenue, Warrington, Pennsylvania 18976
- ------------------------------------------ ----------
(Address of Principal Executive Offices) (Zip Code)
(215) 343-5900
---------------------------------------------------
(Registrant's telephone number, including area code)
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
--- ---
As of May 15, 1996, the Registrant had 28,175 shares of its common
stock outstanding.
<PAGE>
<PAGE>
INDEX
Number Page
- ------ ----
PART I. Financial Information.
Item 1. Consolidated Financial Statements.
Consolidated Balance Sheets - March 31, 1996
and June 30, 1995 . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations - Three
Months Ended March 31, 1996 and 1995. . . . . . . 6
Consolidated Statements of Operations - Nine
Months Ended March 31, 1996 and 1995. . . . . . . 7
Consolidated Statements of Shareholders' Equity -
Nine Months Ended March 31, 1996 and The
Year Ended June 30, 1995 . . . . . . . . . . . . . 8
Consolidated Statements of Cash Flows - Nine
Months Ended March 31, 1996 and 1995 . . . . . . . 9
Notes to Consolidated Financial Statements. . . . . . . 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . 13
PART II. Other Information.
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . 15
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . 16
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . 16
Item 4. Submission of Matters to a Vote of Security
Holders. . . . . . . . . . . . . . . . . . . . . . 16
2<PAGE>
<PAGE>
Item 5. Other Information . . . . . . . . . . . . . . . . . . . 16
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . 16
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES A "SAFE
HARBOR" FOR FORWARD-LOOKING STATEMENTS. CERTAIN INFORMATION INCLUDED IN
THIS QUARTERLY REPORT CONTAINS INFORMATION THAT IS FORWARD LOOKING, SUCH
AS INFORMATION RELATING TO FUTURE SALES, INCOME FROM OPERATIONS, CAPITAL
EXPENDITURES, ADEQUACY OF CASH AVAILABLE FROM THE COMPANY'S OPERATIONS AND
CREDIT FACILITIES AND THE IMPACT ON THE COMPANY OF THE OUTCOME OF CERTAIN
LITIGATION DESCRIBED HEREIN. SUCH FORWARD LOOKING INFORMATION INVOLVES
IMPORTANT RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT EXPECTED
RESULTS IN THE FUTURE FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING
STATEMENTS MADE BY, OR ON BEHALF OF, THE COMPANY. THESE RISKS AND
UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, UNCERTAINTIES RELATING TO
ECONOMIC CONDITIONS, ACQUISITIONS AND DIVESTITURES, GOVERNMENT AND
REGULATORY POLICIES, THE PRICING AND AVAILABILITY OF EQUIPMENT, MATERIALS
AND PROGRAMMING, TECHNOLOGICAL DEVELOPMENTS AND CHANGES IN THE COMPETITIVE
ENVIRONMENT IN WHICH THE COMPANY OPERATES.
3<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements.
---------------------------------
<TABLE>
NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
---------------------------------------------
ASSETS
March 31, 1996 June 30, 1995
-------------- -------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 592,000 $ 66,905
Accounts receivable 4,862,041 4,126,320
Costs and estimated
earnings in excess
of billings
on uncompleted contracts
(Note 5) 3,105,695 1,733,552
Inventory (Note 3) 3,594,632 3,509,290
Prepaid expenses and
other current assets 452,067 165,715
------------ ------------
Total Current Assets 12,606,435 9,601,782
PROPERTY, PLANT AND EQUIPMENT
(net of accumulated depre-
ciation and amortization of
$2,694,336 at March 31,
1996 and $2,440,061 at
June 30, 1995) 2,047,728 1,405,459
OTHER ASSETS
Intangible assets (net of
accumulated amortization of
$14,663 at March 31,
1996) (Note 2) 399,337 -
Patents (net of accumulated
amortization of $70,212
at March 31, 1996 and
$60,987 at June 30, 1995) 149,616 136,476
Organization costs (net
of accumulated amortization
of $5,501 at March 31, 1996) 31,842 -
Other 32,551 24,951
-------------- --------------
Total Other Assets 613,346 161,427
-------------- --------------
TOTAL ASSETS $ 15,267,509 $11,168,668
============== ==============
</TABLE>
See Notes to Consolidated Financial Statements
4<PAGE>
<PAGE>
<TABLE>
NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
---------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 1996 June 30, 1995
-------------- -------------
<S> <C> <C>
CURRENT LIABILITIES
Short-term borrowings $4,025,000 $1,850,000
Current portion of
long-term debt 485,808 364,041
Accounts payable 1,742,884 1,554,882
Accrued expenses 744,498 466,015
Accrued payroll and
payroll taxes 363,798 274,803
Taxes payable on income 335,138 457,055
----------- ---------
Total Current Liabilities 7,697,126 4,966,796
LONG-TERM DEBT 233,896 379,131
DEFERRED INCOME TAXES 28,504 28,504
MINORITY INTEREST IN EQUITY OF
CONSOLIDATED SUBSIDIARY 165,959 -
COMMITMENTS AND CONTINGENCY
(Note 6)
SHAREHOLDERS' EQUITY
Common Stock
Stated value $5 per
share, with 60,000 shares
authorized, 31,873 shares
issued and 28,175 shares
outstanding 159,365 159,365
Additional paid in
capital 517,010 517,010
Retained Earnings 6,528,002 5,180,215
Less: treasury stock,
3,698 shares at cost (62,353) (62,353)
------------ ------------
Total Shareholders' Equity 7,142,024 5,794,237
------------ ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $15,267,509 $11,168,668
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
5<PAGE>
<PAGE>
<TABLE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
--------------------------------------------
Three Months Ended
March 31,
1996 1995
---- ----
<S> <C> <C>
NET SALES $8,100,045 $6,917,256
COST OF SALES 5,781,763 5,459,182
----------- ----------
GROSS PROFIT 2,318,282 1,458,074
SELLING AND ADMINISTRATIVE
EXPENSES 759,113 453,950
RESEARCH AND DEVELOPMENT
EXPENSES 254,452 211,612
INTEREST EXPENSE 103,707 92,936
---------- ----------
INCOME FROM OPERATIONS 1,201,010 699,576
OTHER INCOME 15,680 6,181
---------- ----------
INCOME BEFORE MINORITY INTEREST 1,216,690 705,757
MINORITY INTEREST IN LOSS OF
CONSOLIDATED SUBSIDIARY 78,897 --
---------- ----------
INCOME BEFORE INCOME TAXES 1,295,587 705,757
LESS: TAXES ON INCOME 524,290 290,497
---------- ----------
NET INCOME $ 771,297 $ 415,260
========== ==========
PRIMARY EARNINGS PER SHARE $ 22.11 $ 12.73
========== ==========
WEIGHTED AVERAGE COMMON SHARES 34,879 32,621
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
6<PAGE>
<PAGE>
<TABLE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
-------------------------------------------
Nine Months Ended
March 31,
1996 1995
---- ----
<S> <C> <C>
NET SALES $20,443,219 $16,600,710
COST OF SALES 15,373,636 13,205,661
------------ ------------
GROSS PROFIT 5,069,583 3,395,049
SELLING AND ADMINISTRATIVE
EXPENSES 2,079,794 1,444,871
RESEARCH AND DEVELOPMENT
EXPENSES 743,153 733,628
INTEREST EXPENSE 254,121 223,747
----------- -----------
INCOME FROM OPERATIONS 1,992,515 992,803
OTHER INCOME 22,806 11,943
----------- -----------
INCOME BEFORE MINORITY INTEREST 2,015,321 1,004,746
MINORITY INTEREST IN LOSS
OF CONSOLIDATED SUBSIDIARY 235,695 --
----------- -----------
INCOME BEFORE INCOME TAXES 2,251,016 1,004,746
LESS: TAXES ON INCOME 903,229 408,535
----------- ----------
NET INCOME $ 1,347,787 $ 596,211
=========== ==========
PRIMARY EARNINGS PER SHARE $ 38.64 $ 18.28
=========== ==========
WEIGHTED AVERAGE COMMON SHARES 34,879 32,621
=========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
7<PAGE>
<PAGE>
<TABLE>
NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED MARCH 31, 1996 AND YEAR ENDED JUNE 30, 1995
(UNAUDITED)
---------------------------------------------------------------------
Common Stock Additional Total
Paid In Retained Shareholders'
Shares Amount Capital Earnings Treasury Stock Equity
------ ------ ---------- -------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at 28,175 $159,365 $517,010 $3,901,739 $(62,353) $4,515,761
June 30, 1994
Net Income for
the year ended
June 30, 1995 -- -- -- 1,278,476 -- 1,278,476
------- -------- -------- ---------- ------------ ---------
Balance at
June 30, 1995 28,175 159,365 517,010 5,180,215 (62,353) 5,794,237
Net income for
the nine months
ended March 31,
1996 -- -- -- 1,347,787 -- 1,347,787
------- -------- -------- ---------- ------------- ---------
Balance at
March 31, 1996 28,175 $159,365 $517,010 $6,528,002 $(62,353) $7,142,024
======= ======== ======== ========== ========= ==========
</TABLE>
See Notes to Consolidated Financial Statements
8<PAGE>
<PAGE>
<TABLE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
-------------------------------------------
Nine Months Ended
March 31,
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $1,347,787 $ 596,211
Adjustments to reconcile net income to
net cash provided by (used by) operating
activities:
Depreciation and amortization 283,664 266,625
Minority interest in loss of
consolidated subsidiary (235,695) -
(Increase) Decrease in:
Accounts receivable (735,721) 379,835
Costs and estimated
earnings in excess
of billings on
uncompleted contracts (1,372,143) (908,289)
Other receivable -- 695,335
Inventory (85,342) 337,492
Prepaid expenses and other
current assets (286,352) (230,502)
Increase (decrease) in:
Accounts payable, accrued
expenses and payroll taxes 555,480 81,737
Taxes payable - on income (121,917) 53,524
NET CASH PROVIDED BY (USED BY) OPERATING
ACTIVITIES (650,239) 1,271,968
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (918,909) (258,731)
Increase in organization costs (37,343) -
----------- ----------
NET CASH USED BY INVESTING ACTIVITIES (956,252) (258,731)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds (payments) on line of credit 2,175,000 (875,000)
Net Payments on long-term debt (23,468) (281,077)
Distributions (12,346)
Increase (decrease) in other assets (7,600) 1,021
----------- ----------
NET CASH PROVIDED BY (USED BY)
FINANCING ACTIVITIES 2,131,586 (1,155,056)
----------- ----------
NET INCREASE (DECREASE) IN CASH 525,095 (141,819)
----------- ----------
CASH - beginning 66,905 163,273
----------- ----------
CASH - ending $ 592,000 $ 21,454
=========== ==========
SUPPLEMENTARY INFORMATION REGARDING
NON-CASH INVESTING ACTIVITIES
Acquisition of intangible assets $ 414,000 -
=========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
9<PAGE>
<PAGE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996 and March 31, 1995
Note 1. The Consolidated Financial Statements of Nuclear Research
Corporation have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission ("SEC"). In the
opinion of management, the accompanying Consolidated Financial Statements
contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the consolidated financial position as of
March 31, 1996 and June 30, 1995 and the consolidated results of
operations and cash flows for the three months and nine months ended March
31, 1996 and 1995. Certain information and footnote disclosures prepared
in accordance with generally accepted accounting principles have either
been condensed or omitted pursuant to SEC rules and regulations. These
financial statements should be read in conjunction with the financial
statements and the notes included in the Company's latest Annual Report on
Form 10-K.
The consolidated results of operations for the nine months ended March 31,
1996 and 1995 are not necessarily indicative of the results for the full
year.
Note 2. Principles of Consolidation.
----------------------------
The Consolidated Financial Statements include the accounts of Nuclear
Research Corporation, NRC Acquisition Corporation and Northeast Nuclear,
Ltd., wholly-owned subsidiaries hereafter referred to collectively as the
"Company." Also included in the Consolidated Financial Statements are the
accounts of Measurement Dynamics LLC ("MDLLC").
In July, 1995 the Company entered into an operating agreement to form
MDLLC, a New Jersey limited liability company, the purpose of which is to
develop, manufacture, produce and sell temperature measurement devices and
other related products or services. Pursuant to the operating agreement,
the Company contributed property, in the form of cash, inventory and other
business assets having a fair market value of $300,000, in exchange for
42% of MDLLC. The Company will produce temperature measurement devices to
be sold by MDLLC under a manufacturing agreement and will provide
administrative services to MDLLC.
In connection with the formation of MDLLC, the Company recorded an
intangible asset of $414,000 which represents certain rights, proprietary
information and intellectual property contributed by the minority interest
in MDLLC. The intangible asset is being amortized over its estimated
useful life of twenty years.
All significant inter-company accounts and transactions have been
eliminated in consolidation.
10<PAGE>
<PAGE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 3. Inventory.
---------
<TABLE>
(UNAUDITED)
March 31, June 30,
1996 1995
-------- --------
<S> <C> <C>
Inventory consists of:
Work-In-Process
United States Government
contracts $2,541,352 $4,748,683
Commercial contracts 888,343 496,603
Purchased and manufactured
parts 387,556 637,739
---------- ----------
3,817,251 5,883,025
Less: Progress payments on United
States Government contracts 222,619 2,373,735
---------- ----------
Total $3,594,632 $3,509,290
========== ==========
</TABLE>
The Company uses the last-in, first-out (LIFO) method to determine its
material inventory costs. The following information will facilitate
comparison with operating results of companies using the FIFO method. If
the Company's inventory had been determined using the FIFO method at
March 31, 1996, reported inventories would have been $890,599 higher and
reported net income would have decreased by $82,791 ($2.37 per share).
The pro forma effect relating to the use of the FIFO method would have
resulted in the following balances for the statement of operations
presentation for the nine months ended March 31, 1996:
Gross Profit $4,931,309
==========
Income from Operations $1,854,241
==========
Net Income $1,264,996
==========
Note 4. Other Receivable.
----------------
On March 15, 1993, a portion of the roof collapsed at the Company's Dover,
New Jersey division resulting in the disruption of production at this
facility. The property, inventory and business interruption losses
resulting from the partial roof collapse were insured. The other
receivable represents the final settlement as of June 30, 1994 of the
Company's insurance claim related to the partial roof collapse. The claim
was paid in the quarterly period ended September 30, 1994.
11<PAGE>
<PAGE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 5. Costs and Estimated Earnings in Excess of Billings on
-----------------------------------------------------
Uncompleted Contracts.
---------------------
The Company recognizes revenues on several fixed-price contracts using the
percentage-of-completion method, measured by the percentage of cost
incurred to date compared to the estimated total cost for the contracts.
That method is used because management considers total cost to be the best
available measure of progress on the contracts. Because of inherent
uncertainties in estimating costs, it is at least reasonably possible that
the estimates used will change within the near term.
Contract costs include all direct material, direct labor and indirect
costs related to contract performance. Provisions for estimated losses on
the uncompleted contracts are made in the period in which such losses are
determined. Changes in estimated job profitability resulting from job
performance, job conditions, claims, change orders, and settlements, are
accounted for in the period in which the changes occur.
The asset, "Costs and estimated earnings in excess of billings on
uncompleted contracts" represents revenues recognized in excess of amounts
billed.
Costs, estimated earnings, and billings on uncompleted contracts are
summarized as follows:
Costs incurred and estimated
earnings on uncompleted
contracts $4,495,045
Billings to date 1,389,350
----------
$3,105,695
==========
Included in accompanying balance sheet under
the following caption:
Costs and estimated earnings
in excess of billings on
uncompleted contracts $3,105,695
==========
12<PAGE>
<PAGE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 6. Commitments and Contingency.
---------------------------
In September 1995, the Company was notified that MDLLC, Mark A.
Sitcoske and a company controlled by Mr. Sitcoske, Measurement Dynamics,
Inc., had been named co-defendants in a suit filed by Hanna Manufacturing,
Inc. ("Hanna"), a Rhode Island Company that previously employed
Mr.Sitcoske. The suit alleges that the defendants acted in violation of
an existing employment and non-compete agreement between Hanna and
Mr. Sitcoske and seeks to enjoin Mr. Sitcoske from his continued
employment with MDLLC and to obtain damages; however, Hanna has not yet
sought a hearing to obtain injunctive relief. The matter is now in
discovery and management expects that the resolution of this matter will
have no material impact on the Company.
ITEM 2: Management's Discussion and Analysis of Financial Condition
- ------ ----------------------------------------------------------
and Results of Operations
-------------------------
Liquidity and Capital Resources
- -------------------------------
During the nine months ended March 31, 1996, increases in accounts
receivable of $735,721, costs and estimated earnings in excess of billings
on uncompleted contracts of $1,372,143 and prepaid expenses of $286,352
were the factors accounting for cash used by operating activities. The
build-up in accounts receivable occurred due to large shipments of a
particular product line during the quarter ended March 31, 1996. An
increase in accounts payable, accrued expenses and payroll taxes offset
cash used by operating activities during the nine months ended March 31,
1996.
The costs and estimated earnings in excess of billings on
uncompleted contracts resulted from the Company using the percentage-of-
completion method of income recognition for several multi-year contracts.
Additionally, during the nine months ended March 31, 1996, the Company had
capital expenditures in the aggregate amount of $429,024 to purchase
manufacturing and computer equipment and to make certain expenditures
associated with patents. The Company is presently constructing a 20,000
square foot addition to its Warrington Facility to accommodate increased
space requirements and to provide for anticipated growth. To date,
$489,885 has been expended in connection with the aforementioned
construction. Cash in the amount of $37,343 was also expended for
organization costs associated with MDLLC. Cash provided by financing
activities for the nine months ended March 31, 1996 increased by
$2,131,586 as a result of borrowings on the line of credit of $2,175,00
partially offset by payments on long-term debt of $23,468 and cash
distributions associated with MDLLC of $12,346.
13<PAGE>
<PAGE>
The Company's backlog of orders as of April 30, 1996 was
$10,078,000 as compared to $24,177,000 as of April 30, 1995. The decrease
in the backlog as of April 30, 1996 as compared to April 30, 1995 is
largely attributed to the resumption of the Company's ability to operate
at normal shipping levels as compared to prior years when the partial roof
collapse at the Company's Dover Division facility prevented the Company
from maintaining normal shipping levels.
The Company believes that funds from operations and amounts
available under its credit facilities will be sufficient to satisfy the
Company's cash requirements for the foreseeable future.
Results of Operations
- ---------------------
Sales for the three months ended March 31, 1996 were $8,100,045,
an increase of $1,182,789 over sales for the three months ended March 31,
1995. The increase in sales is primarily attributable to increased
foreign shipments as a result of more aggressive marketing abroad. The
increase in sales for the three months ended March 31, 1996 represents an
increase of 17.10% as compared to the three months ended March 31, 1995.
Income from operations increased to $1,201,010 for the three
months ended March 31, 1996 from $699,576 for the three months ended
March 31, 1995. This increase was primarily due to an increase in
shipments of a particular product line with higher gross margins which
resulted in a more favorable product mix and a higher sales volume.
Shipments of this product line have decreased and this decrease may result
in a decrease in income from operations for the quarter ended June 30,
1996. Gross profit as a percentage of sales increased to 28.62% for the
three months ended March 31, 1996 as compared to 21.08% for the three
months ended March 31, 1995.
Selling and administrative expenses increased $305,163 to $759,113
for the three months ended March 31, 1996. The increase was primarily due
to increased commission expenses and costs associates with MDLLC. As a
percentage of sales, selling and administrative expenses increased to
9.37% for the three months ended March 31, 1996 as compared to 6.56% for
the three months ended March 31, 1995.
Research and development expenses increased $42,840 to $254,452
for the three months ended March 31, 1996 as compared to $211,612 for the
three months ended March 31, 1995. As a percentage of sales, research and
development expenses remained unchanged for the three months ended March
31, 1996 as compared to the three months ended March 31, 1995.
Interest expense increased $10,771 to $103,707 for the three
months ended March 31, 1996 as compared to the three months ended
March 31, 1995.
Sales for the nine months ended March 31, 1996 increased
$3,842,509 to $20,443,219 as compared to $16,600,710 for the nine months
ended March 31, 1995. The increase in sales was primarily due to an
14<PAGE>
<PAGE>
increase in shipments of a particular product line. Shipments of this
product line have decreased and this decrease may result in a decrease in
sales for the quarter ended June 30, 1996. Foreign sales increased to
$4,328,887 for the nine months ended March 31, 1996 as compared to
$2,138,853 for the nine months ended March 31, 1995 as a result of more
aggressive marketing abroad.
Income from operations increased to $1,992,515 for the nine months
ended March 31, 1996 as compared to $992,803 for the nine months ended
March 31, 1995. This increase was primarily due to an increase in
shipments of a particular product line with higher gross margins which
resulted in a more favorable product mix and a higher sales volume.
Shipments of this product line have decreased and this decrease may result
in a decrease in income from operations for the quarter ended June 30,
1996. Gross profit as a percentage of sales increased to 24.80% for the
nine months ended March 31, 1996, as compared to 20.45% for the nine
months ended March 31, 1995.
Selling and administrative expenses increased $634,923 to
$2,079,794 for the nine months ended March 31, 1996. The increase was
primarily due to increased commission expense and costs associated with
MDLLC. As a percentage of sales, selling and administrative expenses
increased to 10.17% for the nine months ended March 31, 1996 as compared
to 8.70% for the nine months ended March 31, 1995.
Research and development expenses increased $9,525 to $743,153 for
the nine months ended March 31, 1996 as compared to $733,628 for the nine
months ended March 31, 1995. As a percentage of sales, research and
development expenses decreased to 3.64% for the nine months ended
March 31, 1996 as compared to 4.42% for the nine months ended March 31,
1995.
Interest expense increased $30,374 to $254,121 for the nine months
ended March 31, 1996 as compared to $223,747 for the nine months ended
March 31, 1995.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
In September 1995, management was notified that MDLLC, Mark A.
Sitcoske and a company controlled by Mr. Sitcoske, Measurement Dynamics,
Inc., had been named as co-defendants in a suit filed on September 7, 1995
in the Superior Court of the State of Rhode Island by Hanna Manufacturing,
Inc. ("Hanna"), a Rhode Island company that previously employed Mr.
Sitcoske. The suit alleges that the defendants acted in violation of an
existing employment and non-compete agreement between Hanna and
Mr. Sitcoske and seeks to enjoin Mr. Sitcoske from his continued
employment with MDLLC and to obtain damages; however, Hanna has not yet
sought a hearing to obtain injunctive relief. The matter is now in
discovery and management expects that the resolution of this matter will
have no material impact on the Company.
15<PAGE>
<PAGE>
Item 2. Changes in Securities.
---------------------
Not Applicable.
Item 3. Defaults upon Senior Securities.
-------------------------------
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
Not Applicable.
Item 5. Other Information.
-----------------
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits.
27. Financial Data Schedules
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter
ended March 31, 1996.
16<PAGE>
<PAGE>
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.
NUCLEAR RESEARCH CORPORATION
By: /s/ Earl M. Pollock
----------------------------
Earl M. Pollock
President
By:: /s/ Mark S. Pollock
----------------------------
Mark S. Pollock
Treasurer
Dated: May 15, 1996
17<PAGE>
<PAGE>
Exhibit Index
Exhibit Method of Filing
- ------- ----------------
27. Financial Data Schedules . . . . . . Filed Herewith Electronically
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOUND IN THE ACCOMPANYING QUARTERLY REPORT
ON FORM 10-Q OF NUCLEAR RESEARCH CORPORATION FOR THE QUARTER ENDED
MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS. THIS EXHIBIT SHALL NOT BE DEEMED FILED FOR PURPOSES
OF SECTION 11 OF THE SECURITIES ACT OF 1933 AND SECTION 18 OF THE SECURITIES
ACT OF 1934, OR OTHERWISE SUBJECT TO THE LIABILITIES OF SUCH SECTIONS, NOR
SHALL IT BE DEEMED PART OF ANY OTHER FILING THAT INCORPORATES THIS REPORT BY
REFERENCE, UNLESS SUCH OTHER FILING EXPRESSLY INCORPORATES THIS EXHIBIT BY
REFERENCE.
</LEGEND>
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<NAME> NUCLEAR RESEARCH CORPORATION
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