U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to .
Commission File Number 0 - 14835
TRANSNATIONAL INDUSTRIES, INC.
(Exact Name of small business issuer as
specified in its charter)
Delaware 22-2328806
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
Post Office Box 198
U.S. Route 1
Chadds Ford, Pennsylvania 19317
(Address of principal executive offices)
(610) 459-5200
(Issuer's telephone number)
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (which is the period
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
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
Common stock, $0.20 par value
Outstanding at August 31, 1999: 502,470
Transitional Small Business Disclosure Format (check one):
YES NO X
<PAGE>
TRANSNATIONAL INDUSTRIES, INC.
INDEX PAGE
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed consolidated balance sheets -- July 31, 1999,
and January 31, 1999. 3-4
Condensed consolidated statements of operations -- Three
months ended July 31, 1999 and 1998; six months ended
July 31, 1999 and 1998. 5
Condensed consolidated statements of cash flows -- Six
months ended July 31, 1999 and 1998. 6
Notes to condensed consolidated financial statements --
July 31, 1999. 7-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 14
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Transnational Industries, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
July 31, January 31,
1999 1999
------------- -------------
Assets (Unaudited) (audited)
<S> <C> <C>
Current Assets:
Cash $ 79 $ 455
Accounts receivable 1,585 1,712
Inventories 1,671 1,281
Other current assets 185 85
------------ -------------
Total current assets 3,520 3,533
Machinery and equipment:
Machinery and equipment 2,855 2,784
Less accumulated depreciation 2,280 2,172
------------ -------------
Net machinery and equipment 575 612
Other assets:
Repair and maintenance inventories, less provision
for obsolescence 165 165
Computer software, less amortization 524 501
Excess of cost over net assets of business acquired,
less amortization 1,791 1,825
------------ -------------
Total other assets 2,480 2,491
============ =============
Total assets $6,575 $6,636
============ =============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
Transnational Industries, Inc.
Condensed Consolidated Balance Sheets (continued)
(Dollars in thousands)
<TABLE>
<CAPTION>
July 31, January 31,
1999 1999
------------- -------------
Liabilities and stockholders' equity (Unaudited) (Audited)
<S> <C> <C>
Current liabilities:
Accounts payable $ 661 $ 366
Deferred maintenance revenue 617 686
Accrued expenses 379 338
Billings in excess of cost and estimated earnings 1,171 1,447
Current portion of long-term debt 210 238
------------ -------------
Total current liabilities 3,038 3,075
Long-term debt, less current portion 557 731
Stockholders' equity:
Series B cumulative convertible preferred stock,
$0.01 par value - authorized 100,000 shares;
issued and outstanding 318 shares (liquidating
value $156,020) 73 73
Common stock, $0.20 par value -authorized
1,000,000 shares; issued and outstanding 502,470
shares 100 100
Additional paid-in capital 8,499 8,493
Accumulated deficit (5,692) (5,836)
------------ -------------
Total stockholders' equity 2,980 2,830
------------ -------------
Total liabilities and stockholders' equity $ 6,575 $ 6,636
============ =============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
Transnational Industries, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 31 July 31
----------------------------- ------------------------------
1999 1998 1999 1998
-------------- -------------- ---------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 2,114 $ 1,854 $ 4,664 $ 3,367
Cost of Sales 1,489 1,229 3,297 2,311
-------------- -------------- ---------------- -------------
Gross Margin 625 625 1,367 1,056
Selling expenses 217 206 396 395
Research and development 161 132 350 237
General and administrative expenses 219 214 429 401
-------------- -------------- ---------------- -------------
597 552 1,175 1,033
-------------- -------------- ---------------- -------------
Operating income 28 73 192 23
Interest expense 17 33 37 70
-------------- -------------- ---------------- -------------
Income (loss) before income tax 11 40 155 (47)
Provision for income taxes 2 - 11 -
-------------- -------------- ---------------- -------------
Net income (loss) 9 40 144 (47)
Preferred dividend requirement 2 2 4 4
-------------- -------------- ---------------- -------------
Income (loss) applicable to common shares $ 7 $ 38 $ 140 $ (51)
============== ============== ================ =============
Basic income (loss) per common share $ 0.01 $ 0.08 $ 0.28 $ (0.10)
============== ============== ================ =============
Diluted income (loss) per common share $ 0.01 $ 0.07 $ 0.28 $ (0.10)
============== ============== ================ =============
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
Transnational Industries, Inc.
Condensed Consolidated Statements
of Cash Flows
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
July 31,
--------------------
1999 1998
---------- ---------
<S> <C> <C>
Net cash provided (used) by operating activities (12) 186
Net cash provided (used) by investing activities (162) (127)
Net cash provided (used) for financing activities (202) (110)
---------- ---------
Increase (decrease) in cash (376) (51)
Cash at beginning of period 455 471
---------- ---------
Cash at end of period $ 79 $ 420
========== =========
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE>
Transnational Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
July 31, 1999
Note A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-QSB and
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. All such adjustments are
of a normal recurring nature. Operating results for the three month and six
month periods ended July 31, 1999, are not necessarily indicative of the results
to be expected for the fiscal year. For further information, refer to the
consolidated financial statements and footnotes thereto for the year ended
January 31, 1999, contained in the Registrant's Annual Report on Form 10-KSB for
the year ended January 31, 1999.
Note B - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share (dollars in thousands except per share data):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 31 July 31
--------------------------- --------------------------
1999 1998 1999 1998
-------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Numerator (same for basic and dilutive):
Net income (loss) $ 9 $ 40 $ 144 $ (47)
Preferred dividend requirement 2 2 4 4
-------------- ------------ ------------ -------------
Net income (loss) available to common stockholders $ 7 $ 38 $ 140 $ (51)
============== ============ ============ =============
Denominator:
Weighted average shares outstanding for basic earnings per
share 502,470 500,970 502,470 500,970
Dilutive effect of employee stock options 12,338 9,795 6,332 --
-------------- ------------ ------------ -------------
Weighted average shares outstanding and assumed conversions
for dilutive earnings per share 514,808 510,765 508,802 500,970
============== ============ ============ =============
Basic income (loss) per share $ .01 $ .08 $ .28 $ (.10)
============== ============ ============ =============
Dilutive income (loss) per share $ .01 $ .07 $ .28 $ (.10)
============== ============ ============ =============
</TABLE>
7
<PAGE>
Common shares potentially issuable under the contractual conversion rights of
the Preferred B shares would have an antidilutive effect on earnings per share
and therefore have not been included in the above computations. Weighted average
common shares issuable under the contractual conversion rights of the Preferred
B shares amounted to 1,871 and 1,941 in each of periods ended July 31, 1999 and
1998, respectively.
Note C -- CONTINGENCIES
In 1995, Spitz became involved in a dispute in connection with a public bid for
the supply of planetarium equipment for an expansion project at a public
community college. Spitz's subcontract bid was the lowest submitted and the
general contractor for the project allegedly used Spitz's pricing in submitting
its total contract bid to the college. After the total contract was awarded to
the general contractor, however, the college's architect alleged that Spitz's
equipment did not conform to the bid specifications. The bid for the equipment
which the architect deemed to be in conformance with the specifications was
allegedly approximately $150,000 higher than Spitz's bid. Because the Contractor
has been forced to supply the more expensive equipment, it is attempting to
recover the $150,000 price differential plus alleged related amounts due to
adverse impacts on the project schedule from various parties. At various times,
the Contractor has threatened to assert its claim against Spitz because it has
been unsuccessful in its attempts to recover its alleged damages from the
college or other involved parties. The Company believes the bid specifications,
to the extent that they excluded Spitz's equipment, constituted an improper
sole-source of equipment which violates competitive bidding laws because the
specifications appear to have been copied from a competitor's equipment. The
Company also believes that the Spitz equipment meets all of the valid functional
requirements in the bid specifications. No lawsuit has been filed against Spitz
or the Company and the parties have discussed settling the matter. The
Contractor has not communicated any threats to carry out its assertion against
Spitz since July 1996, but it has indicated to Spitz that proceedings continue
in an effort to recover damages from the other parties involved. The Company
believes that it is likely that the parties will reach an agreement to resolve
the dispute short of litigation. The Company is unable to estimate a probable
outcome and its effect, if any, on Spitz. Accordingly, no liability for the
potential claim has been recorded at July 31, 1999.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of operations
Revenues in the second quarter and first six months of the fiscal year ended
January 31, 2000 (Fiscal 2000) were $2,114,000 and $4,664,000 compared to
$1,854,000 and $3,367,000 in the comparable periods of Fiscal 1999. The increase
of $260,000 (14%) for the quarter was due to higher ImmersaVision revenues,
which were partially offset by lower dome revenues. The increase of $1,297,000
(39%) for the six-month period resulted from higher revenues from all of the
Company's products. ImmersaVision revenues were $286,000 and $760,000 in the
first quarter and first six months of Fiscal 200, respectively, compared to no
ImmersaVision revenue in Fiscal 1999. The ImmersaVision revenue in Fiscal 2000
was attributable to the two orders received at the end of Fiscal 1999. Revenue
from ImmersaVision is expected to continue at this level through Fiscal 2000 and
into the following year as work continues on the two current orders as well as
other anticipated new sales. Planetarium revenues were $813,000 and $1,553,000
in the second quarter and first six months of Fiscal 2000 compared to $814,000
and $1,184,000 in the comparable periods of Fiscal 1999, a decrease of $1,000
for the quarter and an increase of $369,000 (31%) for the six-month period. For
the quarter, planetarium revenues from the sale of systems decreased slightly
while revenue from maintenance and parts increased. The increase in planetarium
revenues for the six-month period was due to several orders for new and
refurbished systems for the educational market booked in fiscal 1999.
Planetarium revenues attributable to the sale of maintenance and parts were
$330,000 and $628,000 in the second quarter and first six months of Fiscal 2000
compared to $294,000 and $582,000 in the comparable periods of Fiscal 1999, an
increase of $36,000 (12%) and $46,000 (8%), respectively. The increase in
maintenance and parts revenues was due to higher sales to customers without
preventive maintenance agreements as well as the timing of performance on
preventive maintenance agreements. Dome revenues were $1,015,000 and $2,351,000
in the second quarter and first six months of Fiscal 2000 compared to $1,040,000
and $2,183,000 in the comparable periods of Fiscal 1999, a decrease of $25,000
(2%) for the quarter and an increase of $168,000 (8%) for the six-month period.
The lower dome revenues for the quarter were attributable to the lower revenues
from film and military simulator domes, which were partially offset by higher
revenues from planetarium and ride simulator domes.
Revenues are expected to continue at higher than historical level for the
remainder of Fiscal 2000 as work continues on sales booked through late Fiscal
1999. The backlog of unearned revenue remained healthy by historical comparison
at $6,366,000, but declined due to the low bookings of new sales in the first
six months of Fiscal 2000. Although bookings were lower than expected, it was
not a result of lost orders to competition but rather the delay of decisions by
sales prospects. Sales prospects remain strong and the Company still expects
significant revenue contributions from ImmersaVision products in future years as
the installed base grows and new applications of the product are developed.
While revenue levels are expected to continue at historically high levels over
the next year, uncertainty in the timing and delivery of sales may cause revenue
levels to continue to fluctuate in interim periods.
Gross margins decreased to 29.6% and 29.3% in the second quarter and first six
9
<PAGE>
months of Fiscal 2000 compared to 33.7% and 31.4% in the comparable periods of
Fiscal 1999. The lower margins were mostly attributable to the ImmersaVision
sales, which include many purchased components that command a lower mark-up than
the Company's manufactured products. Although the gross margins on ImmersaVision
sales are generally lower, significant profits result from the revenue volume
generated from the sale of the high cost components. Also, as the Company
develops more proprietary technology for ImmersaVision, it expects more sales of
higher margin software and integration services to the new markets that open up
for ImmersaVision. Otherwise, in Fiscal 2000, margin improvements resulted from
volume-related efficiencies and successful efforts on many dome projects. The
improved gross margins were also weighed down by expected lower margins on
subcontracted work for a special device to rotate a large film theater dome and
higher costs related to the first deliveries of a newly updated planetarium
system.
Selling expenses increased $11,000 (5%) and $1,000 in the second quarter and
first six months of Fiscal 2000 compared to the comparable periods of fiscal
1999 due to greater sales and marketing efforts through the reassignment of
personnel and a sales staff addition. The increase resulting from the new sales
and marketing activities was partially offset by the reduction of the Fiscal
1999 high use of engineering resources for selling efforts. Research and
development expenses increased $29,000 (22%) and $113,000 (48%) in the second
quarter and first six months of Fiscal 2000 compared to the comparable periods
of Fiscal 1999. The increase in research and development expenses is due to
product development efforts to meet delivery obligations for existing
ImmersaVision customers as well as continuing research and development of
proprietary programming tools for software content development for
ImmersaVision, improvements to ImmersaVision subsystems, and improvements to
optical planetarium products. General and administrative expenses increased
$5,000 (2%) and $28,000 (7%) in the second quarter and the first six months of
Fiscal 2000 compared to the comparable periods of Fiscal 1999. General and
administrative expenses increased due primarily to the use of professional
services for information system improvements and strategic planning. The effect
of the increase was less obvious due to a $25,000 charge to account for
questionable accounts receivable in fiscal 1999.
Net interest expense amounted to $17,000 and $37,000 in the second quarter and
first six months of Fiscal 2000 compared to $33,000 and $70,000 in the
comparable periods of Fiscal 1999. The decrease in interest expense was
attributable mainly to lower use of the bank line of credit. The $17,000 and
$37,000 reported in the first quarter and first six months of Fiscal 2000
consisted of $13,000 and $29,000 paid on bank debt agreements plus $5,000 and
$11,000 paid on capital lease obligations, offset by $1,000 and $3,000 of
interest income earned on cash invested. The $33,000 and $70,000 reported in the
first quarter and first six months of Fiscal 1999 consisted of $26,000 and
$54,000 paid on bank debt agreements plus $7,000 and $16,000 paid on capital
lease obligations. The Company continues to pay no federal income taxes as
federal taxable income is offset by the utilization of net operating loss
carryforwards. The provision for income taxes consists of state income taxes on
net income reported through the first six months of Fiscal 2000.
As a result of the above, the Company reported net income of $9,000 and $144,000
in the second quarter and first six months of Fiscal 2000 compared to net income
of $40,000 in the second quarter of fiscal 1999 and a net loss of $47,000 for
the first six months of Fiscal 1999.
10
<PAGE>
Liquidity and Capital Resources
Net cash used by operating activities was $12,000 in the first six months of
Fiscal 2000 compared to $186,000 provided in the first six months of Fiscal
1999. The $12,000 used by operations in the first six months of Fiscal 2000
consisted of $380,000 provided from earnings offset by $392,000 used by changes
in operating assets and liabilities. The $186,000 provided by operations in the
first six months of Fiscal 1999 consisted of $133,000 provided from earnings
plus $53,000 provided from changes in operating assets and liabilities.
In addition to the $12,000 used by operations in the first six months of Fiscal
2000, $202,000 was used for principal payments on revolving credit debt, term
debt and capital leases and $162,000 was invested in capital assets. The
$186,000 provided by operations in the first six months of Fiscal 1999 was
offset by $110,000 of scheduled principal payments on debt obligations and
$127,000 invested in capital assets. The net result was a $376,000 reduction in
cash balances during the first six months of Fiscal 2000 compared to a reduction
of $51,000 during the first six months of Fiscal 1999.
The $162,000 invested in capital assets in the first six months of Fiscal 2000
consisted of $94,000 in computer software and $68,000 of various machinery and
equipment additions. Also in the first six months of Fiscal 2000 the
installation of a new computer infrastructure began for the purpose of improving
the Company's information systems. Initial hardware installation was completed
in August 1999 at a cost of approximately $85,000. The Company is financing this
cost along with new computer software to be installed in Fiscal 2000 through a
capital lease. The $127,000 invested in capital assets in the first six months
of Fiscal 1999 consisted of $91,000 of computer software and $36,000 of various
machinery and equipment additions. In addition, $32,000 of computer hardware for
the development of ImmersaVision software was financed through a capital lease
in the first six months of Fiscal 1999.
At July 31, 1999 the balance on the revolving credit note was $75,000 compared
to $150,000 at January 31, 1999. This resulted in unused borrowing capacity of
$725,000 at July 31, 1999 compared to $650,000 at January 31, 1999. Remaining
cash balances of $79,000 at July 31, 1999 compared to $455,000 at January 31,
1999 provided additional liquidity. The next source of liquidity, trade accounts
receivable, decreased to $1,585,000 at July 31, 1999 compared to $1,712,000 at
January 31, 1999. The demand on liquidity by contracts in progress decreased as
billings exceeded revenue recorded by $185,000 at July 31, 1999 compared to
$763,000 at January 31, 1999. Contracts in progress at July 31, 1999 will use
the other sources of liquidity as performance catches up to the billings through
the completion of each project. The payment terms on new contracts remain
uncertain and will also affect liquidity.
Total debt at July 31, 1999 was $767,000, a decrease of $202,000 from the
$969,000 at January 31, 1999. The decrease resulted from $147,000 of scheduled
principal payments on debt and lease obligations and $75,000 in net payments on
revolving credit debt.
The existing debt agreements combined with current assets and cash flow from
operations, assuming reasonably consistent revenue levels, should provide the
Company with adequate liquidity for the foreseeable future.
Year 2000 Impact
The Year 2000 Issue is the result of computer programs being unable to
11
<PAGE>
distinguish between the year 1900 and 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, or engage in
similar normal business activities.
The Company currently uses a combination of mini computer applications,
microcomputer applications and manual procedures to account for and manage its
business processes. The very unique nature of the Company's business, its small
size, and the variety of activities it is involved in, along with past financial
constraints, have perpetuated the use of the current systems. The mini computer
applications are not currently Year 2000 compliant. Vendors and consultants have
proposed year 2000 corrections to the mini computer applications; however, the
Company believes that such changes could be costly and uncertain. Improvements
in the Company's financial condition, the availability of more affordable
technology solutions and anticipated increases in business volume now justify
major improvement to the Company's information systems. Therefore, the Company
has concluded that it would be better served by an alternative solution. As part
of this wider objective to improve its information systems, the Company has
evaluated its overall data processing resources and plans to make substantial
changes in the fiscal year ending January 31, 2000. In this process, the Company
has selected new products that are Year 2000 compliant. The Company has
completed an analysis of its business processes and requirements, which were
matched to the capabilities of available enterprise software products. A list of
enterprise software products best suited for the Company's business was compiled
and a determination was made on the basic computer infrastructure required to
run the list of software products. Installation of the new computer
infrastructure was completed in August 1999 at an initial cost of $82,000. An
enterprise software system has been selected after an evaluation of several
products, which will require additional computer hardware installed in September
1999 at a cost of approximately $40,000. Installation and implementation of the
enterprise software is being planned to take place in phases over the next year
with the objective of replacing critical applications which rely on date
sensitive applications of the current mini computer system by the end of 1999.
Cost of the enterprise software, installation and implementation is estimated at
$300,000. The cost will be capitalized and funded through operating cash flow
and leasing of computer hardware and software.
The Company is not integrated with and does not rely heavily on vendors',
clients' and other third parties' data processing systems. The bulk of the
Company's revenue is generated from new public or commercial projects.
Maintenance and parts revenue comes from repeat customers, mainly museums and
schools. As such, revenue is generally not dependent upon repeat sales to
commercial customers' inventory management systems or enterprise resource
planning systems the way many businesses may be. The Company uses a network of
vendors to obtain its parts and supplies. Many parts and supplies are
commodities available from numerous sources. The effect of critical vendors'
ability to continue to supply the Company though Year 2000 has not been
determined. However, the Company believes that the lack of integration with
vendors systems and numerous available sources will reduce the risk from
vendors' Year 2000 potential problems.
The Company's products rely on a number of widely used third party software
products, which claim to be Year 2000 compliant or do not perform date-oriented
tasks. Evaluation and testing of the Year 2000 impact on software used in the
Company's products is planned in conjunction with other research and development
efforts over the next year. Evaluation and any required corrections are not
expected to have a material cost impact.
As a contingency plan, in the event that all of the necessary changes are not
12
<PAGE>
completed by the Year 2000, the portions of the operations that rely on date
sensitive data can be accommodated by manual procedures and date adjustments to
selective existing software applications. The Company believes this contingency
plan could be accomplished without a material interruption to the Company's
business.
In addition to the specific anticipated costs described above, the Company will
incur additional costs as salaried personnel utilize their time to work on Year
2000 matters. The Company does not anticipate that the use of internal personnel
will have a material adverse effect upon the Company's operations or earnings;
however, the Company is not yet able to quantify such costs and, because the
Company has not reserved any amounts therefore, any amounts so expended will
reduce the Company's earnings. In addition, in the event that the economy as a
whole is materially and adversely effected by widespread interruptions, or by
failures of key infrastructure providers (such as banks and utilities), it is
likely that the Company's financial condition and results of operations would be
materially adversely effected.
Forward-Looking Information
The statements in this Quarterly Report on Form 10-QSB that are not statements
of historical fact constitute "forward-looking statements." Said forward-looking
statements involve risks and uncertainties which may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performances or achievements, expressly predicted or implied by
such forward-looking statements. These forward-looking statements are identified
by their use of forms of such terms and phrases as "expects," "intends,"
"goals," "estimates," "projects," "plans," "anticipates," "should," "future,"
"believes," and "scheduled."
The important factors which may cause actual results to differ from the
forward-looking statements contained herein include, but are not limited to, the
following: general economic and business conditions; competition; success of
operating initiatives; operating costs; advertising and promotional efforts; the
existence or absence of adverse publicity; changes in business strategy or
development plans; the ability to retain key management; availability, terms and
deployment of capital; business abilities and judgment of personnel;
availability of qualified personnel; labor and employee benefit costs;
availability and costs of raw materials and supplies; and changes in, or failure
to comply with, government regulations. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included in this filing will
prove to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and expectations of the Company will be achieved.
13
<PAGE>
II. OTHER INFORMATION
6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
No. Description of Document
27 Financial Data Schedules
(b) The Registrant did not file any reports on Form 8-K during the three months
ended July 31, 1999.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TRANSNATIONAL INDUSTRIES, INC.
/s/ Paul L. Dailey, Jr.
-------------------------
Date: September 14, 1999 Paul L. Dailey, Jr.
Secretary-Treasurer
Signing on Behalf of Registrant
and as Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated balance sheet of Transnational Industries, Inc. as of
July 31, 1999 and the related condensed consolidated statement of operations and
statement of cash flows for the six months then ended and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-END> JUL-31-1999
<CASH> 79
<SECURITIES> 0
<RECEIVABLES> 1585
<ALLOWANCES> 0
<INVENTORY> 1671
<CURRENT-ASSETS> 3520
<PP&E> 2855
<DEPRECIATION> 2280
<TOTAL-ASSETS> 6575
<CURRENT-LIABILITIES> 3038
<BONDS> 0
0
73
<COMMON> 100
<OTHER-SE> 2807
<TOTAL-LIABILITY-AND-EQUITY> 6575
<SALES> 4664
<TOTAL-REVENUES> 4664
<CGS> 3297
<TOTAL-COSTS> 3297
<OTHER-EXPENSES> 350
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37
<INCOME-PRETAX> 155
<INCOME-TAX> 11
<INCOME-CONTINUING> 144
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 144
<EPS-BASIC> 0.28
<EPS-DILUTED> 0.28
</TABLE>
