SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For Quarterly Period Ended March 31, 1996
Commission File Number 1-11046
TOP SOURCE TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 84-1027821
(State or other jurisdiction of (I.R.S. Employer
inorporation or organization) Identification Number)
7108 Fairway Drive, Suite 200, Palm Beach Gardens, Florida 33418
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407)775-5756
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 ___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 1, 1996
Common stock: $.001 par value 28,206,477 shares
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TOP SOURCE TECHNOLOGIES, INC.
FORM 10-Q
INDEX
Page
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1996
(Unaudited) and September 30, 1995......................1
Consolidated Statements of Operations for the
Three and Six Months Ended March 31, 1996 and 1995
(Unaudited)..............................................2-3
Consolidated Statements of Cash Flows for the Six
Months Ended March 31, 1996 and 1995 (Unaudited).........4
Notes to Unaudited Interim Consolidated
Financial Statements.....................................5-6
ITEM 2. Management's Discussion and Analysis of Interim
Financial Condition and Results of Operations.............6-10
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings...............................................10
ITEM 4. Submission of Matters to a Vote of Security Holders.............11
ITEM 6. Exhibits and Reports on Form 8-K................................12
i
<PAGE>
TOP SOURCE TECHNOLOGIES, INC
CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 1996 AND SEPTEMBER 30, 1995
(UNAUDITED)
March 31, Sept.30,
ASSETS 1996 1995
Current Assets:
Cash and cash equivalents ............................ 912,727 1,154,137
Accounts receivable trade (net of allowance of
$83,650 and $145,703 at March 31 and
September 30, respectfully) ....................... 3,537,912 3,489,791
Inventories ........................................ 1,058,306 468,169
Prepaid expenses ................................... 362,262 436,738
Other .............................................. 173,226 82,258
---------- ---------
Total current assets ................................. 6,044,433 5,631,093
Property and equipment, net .......................... 2,800,696 3,244,723
Manufacturing and distribution rights and patents, net 367,131 366,765
Capitalized database, net ............................ 2,600,277 2,705,693
Intangible assets relating to businesses acquired, net 4,705,537 4,768,470
Deferred income tax assets, net ...................... 1,570,000 1,720,000
Other assets, net .................................... 786,967 808,695
----------- ----------
TOTAL ASSETS ......................................... 18,875,041 19,245,439
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable ................................... 1,063,674 1,279,761
Accrued salaries ................................... 69,442 318,621
Accrued liabilities ................................ 251,305 681,961
Deferred service revenue ........................... 518,620 499,998
----------- -----------
Total current liabilities ............................ 1,903,041 2,780,341
Senior convertible notes ........................... 3,020,000 2,060,000
----------- -----------
Total liabilities .................................... 4,923,041 4,840,341
Commitments and contingencies
Stockholders' equity:
Preferred stock - $.10 par value, 5,000,000 shares
authorized; none outstanding .................... -- --
Common stock-$.001 par value, 50,000,000 shares
authorized; 28,192,477 and 27,731,477 shares issued
March 31 and September 30, respectively ........... 28,192 27,731
Additional paid-in capital ......................... 28,358,334 27,514,154
Accumulated deficit ................................ (14,302,741)(13,005,002)
Treasury stock-at cost; 87,534 shares .............. (131,785) (131,785)
----------- -----------
Total stockholders' equity ........................... 13,952,000 14,405,098
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........... 18,875,041 19,245,439
=========== ===========
See accompanying notes to unaudited interim consolidated financial statements
1
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TOP SOURCE TECHNOLOGIES, INC
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1995 (UNAUDITED)
1996 1995
Revenue: ---- ----
Product sales .................................... 3,294,201 3,836,156
Service revenue .................................. 1,154,010 1,461,523
--------- -----------
Net sales ...................................... 4,448,211 5,297,679
Cost of sales:
Cost of product sales............................. 2,224,288 2,399,276
Cost of services ................................. 925,968 1,133,980
----------- -----------
Cost of sales .................................. 3,150,256 3,533,256
----------- -----------
Gross profit ..................................... 1,297,955 1,764,423
Expenses:
General and administrative ..................... 1,510,073 1,536,819
Selling and marketing .......................... 546,565 528,281
Depreciation and amortization .................. 269,867 223,627
Research and development ....................... 20,890 9,130
----------- -----------
Total expenses ................................... 2,347,395 2,297,857
----------- -----------
Loss from operations ............................. (1,049,440) (533,434)
Other income (expense):
Interest income ................................ 25,339 9,535
Interest expense ............................... (68,263) (2,427)
Other income (expense), net .................... 11,854 (12,416)
--------- -----------
Net other expense ................................ (31,070) (5,308)
---------- -----------
Net loss before income taxes ..................... (1,080,510) (538,742)
Income tax expense ............................... (167,500) --
----------- -----------
Net loss ......................................... (1,248,010) (538,742)
=========== ===========
Net loss per weighted average common share
outstanding ................................... (0.04) (0.02)
=========== ===========
Weighted average common shares outstanding ....... 27,937,624 27,231,190
=========== ===========
See accompanying notes to unaudited interim consolidated financial statements
2
<PAGE>
TOP SOURCE TECHNOLOGIES, INC
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED
MARCH 31, 1996 AND 1995 (UNAUDITED)
1996 1995
Revenue: -- --
Product sales ............................... 6,723,997 6,962,295
Service revenue ............................. 2,305,893 2,831,216
----------- -----------
Net sales ................................. 9,029,890 9,793,511
Cost of sales:
Cost of product sales ....................... 4,317,823 4,309,734
Cost of services ............................ 1,815,645 2,268,039
----------- -----------
Cost of sales ............................. 6,133,468 6,577,773
----------- -----------
Gross profit ................................ 2,896,422 3,215,738
Expenses:
General and administrative ................. 2,490,963 2,834,796
Selling and marketing ...................... 929,077 801,029
Depreciation and amortization .............. 535,567 427,411
Research and development ................... 34,097 19,978
----------- -----------
Total expenses ............................... 3,989,704 4,083,214
----------- -----------
Loss from operations ........................ (1,093,282) (867,476)
Other income (expense):
Interest income ........................... 66,113 27,657
Interest expense .......................... (134,577) (2,427)
Other income (expense), net ............... 46,507 (16,047)
----------- -----------
Net other income (expense) ................. (21,957) 9,183
----------- -----------
Net loss before income taxes ................ (1,115,239) (858,293)
Income tax expense .......................... (182,500) --
----------- -----------
Net loss .................................... (1,297,739) (858,293)
=========== ===========
Net loss per weighted average common share
outstanding .............................. (0.05) (0.03)
=========== ===========
Weighted average common shares outstanding .. 27,828,500 27,163,209
=========== ===========
See accompanying notes to unaudited interim consolidated financial statements.
3
<PAGE>
TOP SOURCE TECHNOLOGIES, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED
MARCH 31, 1996 AND 1995 (UNAUDITED)
1996 1995
OPERATING ACTIVITIES: ---- ----
Net loss ................................ (1,297,739) (858,293)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation ............................ 664,756 414,589
Amortization ............................ 201,193 173,420
Disposal of equipment ................... 16,627 29,233
Decrease in deferred income tax assets, net 150,000 --
Advance to officer ...................... -- (45,765)
Repayment from officer .................. -- 40,000
Decrease (increase) in accounts receivable, net (48,121) 899,208
Increase in inventories ................. (590,137) (320,383)
Decrease (increase) in prepaid expenses .. 74,476 (145,845)
Decrease (increase) in other assets ...... (71,184) 132,966
Increase (decrease) in accounts payable .. (216,087) 735,703
Increase (decrease) in accrued salaries .. (249,179) 11,956
Decrease in accrued liabilities and
deferred revenue ........................ (412,034) (503,008)
---------- ----------
Net cash provided by (used in)
operating activities (1,777,429) 563,781
INVESTING ACTIVITIES:
Purchases of property and equipment, net . (702,578) (1,196,864)
Reimbursement of tooling costs ........... 465,222 --
Increase in other assets ................. -- (650,000)
Additions to patent costs ................ (31,266) (28,970)
---------- ----------
Net cash used in investing activities ........ (268,622) (1,875,834)
FINANCING ACTIVITIES:
Proceeds from sale of common stock, net ... 844,641 798,860
Proceeds from borrowings .................. 960,000 1,300,000
Repayments of borrowings .................. -- (888,042)
---------- ----------
Net cash provided by financing activities ..... 1,804,641 1,210,818
---------- ----------
Net increase (decrease) in cash and
cash equivalents (241,410) (101,235)
Cash and cash equivalents at beginning of period 1,154,137 1,429,362
--------- ----------
Cash and cash equivalents at end of period ..... 912,727 1,328,127
========== ==========
See accompanying notes to unaudited interim consolidated financial statements..
4
<PAGE>
TOP SOURCE TECHNOLOGIES, INC.
FORM 10-Q
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1.......BASIS OF PRESENTATION
The accompanying financial statements of Top Source Technologies,
Inc. (the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included in the accompanying
financial statements. The consolidated financial statements include the accounts
of the Company and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated. The results of operations of any interim
period are not necessarily indicative of the results of operations for the
fiscal year. For further information, refer to the financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended September 30, 1995. Certain fiscal year 1995 amounts have been
reclassified to conform to current year presentation.
2........INVENTORIES
Inventories consisted of the following:
March 31 September 30
1996 1995
---- ----
Raw materials $ 795,671 $395,999
Finished goods 262,635 72,170
------- ------
$1,058,306 $468,169
========= =======
3........INCOME TAXES
In February 1992, the Financial Accounting Standards Board adopted
Statement of Financial Accounting Standards ("SFAS") No. 109 "Accounting for
Income Taxes". The Company implemented SFAS No. 109 in fiscal 1994 by accounting
for the cumulative effect of the change in the period of adoption. The
cumulative effect upon adoption was not material. SFAS No. 109 changed the
method of computing deferred income taxes from a deferred method to a liability
method. Under the liability method, deferred income taxes are determined based
on temporary differences between the financial statement and tax bases of assets
and liabilities, using enacted tax rates in effect during the years in which the
differences are expected to reverse, and on available tax carryforwards.
5
<PAGE>
TOP SOURCE TECHNOLOGIES, INC.
FORM 10-Q
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
3. INCOME TAXES - Continued
The Company has recorded a deferred income tax benefit and related deferred
income tax asset based on the pre-tax loss for the six months ended March 31,
1996, and recorded a full valuation allowance in the same amount.
At March 31, 1996, the Company's balance sheet contains a deferred income
tax asset of $1,570,000, which includes an additional $150,000 valuation
allowance recorded during the three months ended March 31, 1996. The additional
valuation allowance is a result of the Company not meeting expectations of
taxable income for the six months ended March 31, 1996. At March 31, 1996, the
Company has net tax basis Federal operating loss carryforwards of approximately
$20,000,000 which may be used to offset future taxable income, if any. The
Company has determined, based on projected future taxable income, that it is
more likely than not that the deferred tax assets at March 31, 1996 will be
realized before the expiration of the underlying net operating loss
carryforwards which will begin expiring in 2001.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF INTERIM FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Total revenues for the three and six month periods ended March 31, 1996
were $4,448,211 and $9,029,890, respectively, compared to $5,297,679 and
$9,793,511, respectively, for the same periods in 1995. The $849,468 and
$763,621 decrease in revenues for the three and six month periods ended March
31, 1996 is primarily attributable to a decrease in product sales at the
Company's Top Source Automotive subsidiary ("TSA") for the three months ended
March 31, 1996 compared to the same period in 1995. In addition there was a
decrease in oil analysis sales at the Company's oil analysis subsidiary, United
Testing Group ("UTG"), for both the three month period ended December 31, 1995
and the three month period ended March 31, 1996 compared to the same periods in
1995.
The decrease in product sales at TSA for the three months ended March 31,
1996 compared to the same period in 1995 is attributable to the planned
changeover over and slower than anticipated production ramp-up of the completely
new Jeep Wrangler program that utilizes TSA's overhead speaker systems ("OHSS").
During the month of April 1996, Chrysler accelerated its ramp-up of the Wrangler
program. This in conjunction with other OHSS sales enabled TSA to achieve record
sales of $1,494,800 in April 1996. The Company anticipates the accelerated
ramp-up will continue through the end of June 1996.
The decrease in comparable sales volume for oil analysis services at UTG is
primarily attributable to the loss of several major oil analysis customers
during fiscal 1995; however, the current sales level is consistent with the
fourth quarter of fiscal 1995 and the first quarter of fiscal 1996.
The gross profit margin for three months ended March 31, 1996 was 29.2%
compared to 33.3% for the same period in 1995. The gross profit margin for the
six months ended March 31, 1996 decreased slightly to 32.1% from 32.8% compared
to the same period in 1995. The decrease in margins below comparable levels in
the prior year is primarily attributable to increased labor and overhead costs
relating to product sales.
6
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TOP SOURCE TECHNOLOGIES, INC.
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF INTERIM FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued
General and administrative expenses decreased $26,746 and $343,833,
respectively, for the three and six month periods ended March 31, 1996 compared
to the same periods in 1995. These decreases are attributable to personnel
reductions and efficiency improvements at UTG and the Company's corporate
office, offset by higher levels of expense at the Company's subsidiary, On-Site
Analysis, Inc. ("OSA, Inc.") for the comparable periods.
Selling and marketing increased 16.0% for the six months ended March 31,
1996 compared to the same period ended in 1995. The increase was a result of the
continued marketing and promotional activities in support of the On-Site Oil
Analyzer (" OSA").
Depreciation and amortization increased 20.7% and 25.3% for the three and
six month periods ended March 31, 1996 compared to the same periods in 1995. The
increase is primarily due to purchases of $702,578 in capital assets which
consists of additional OSA units and capital equipment expenditures at TSA in
the six months ended March 31, 1996. Depreciation and amortization of $330,382
was allocated to cost of sales as it directly relates to the products and
services sold during the six months ended March 31, 1996 compared to $303,271
for the same period ended in 1995.
Interest income increased $15,804 and $38,456 for the three and six months
ended March 31, 1996 compared to the same periods ended in 1995. The increase is
due to the interest earned on the increased funds invested in the current fiscal
period.
Interest expense increased $65,836 and $132,150 for the three and six
months ended March 31, 1996 compared to the same periods ended in 1995. This
increase is due to the interest expense on the Company's $3,020,000 nine percent
(9%) Senior Subordinated Convertible Notes which were issued in June and October
1995.
Other income increased $24,270 and $62,554 for the three and six months
ended March 31, 1996 compared to the same periods ended in 1995. This increase
is due to $56,367 received in October 1995 from Professional Services
Industries, Inc. ("PSI") in connection with the lawsuit against PSI. (See Part
II - Other Information, Item 1. Legal Proceedings)
The increase in the net loss for the three months ended March 31, 1996
compared to the same period ended in 1995 is attributable to the lower level of
product sales at TSA and higher level of expenses incurred to increase
infrastructure at OSA, Inc. to support the rollout of the OSA units, offset by a
decrease in losses at UTG due to cost reductions. In order to improve the
results of operations, in May 1996, the Company began implementing cost
reductions at all locations.
7
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TOP SOURCE TECHNOLOGIES, INC.
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF INTERIM FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued
In January 1996, the Company began generating minimal revenue from two
equipment maintenance ("EM") OSAs at two customer sites, an oil distributor and
an automobile dealership. In March 1996, the Company added a city municipality
in Florida that also began generating minimal revenue from an EM OSA. During
this period, and the subsequent period through the present time, the Company has
continued discussions with a group interested in acquiring world-wide franchise
rights to market EM OSAs in certain industries. These discussions have recently
intensified and the Company believes a letter of intent embodying agreements on
major business issues will be executed in the near future.
Based on the continuing reliable performance of the EM units and interest
expressed in the OSA units in new markets, the Company began discussions in
March 1996 with several major corporations about the possibility of marketing EM
OSAs in segments not included in the franchise market noted above.
Although there can be no assurances that present discussions will be
successful with companies in either the franchise or other OSA markets, the
Company has made the commitment to pursue strategic alliances with established
companies in order to accelerate and maximize EM OSA market potential because
it anticipates signing marketing agreements with these or other partners. The
Company believes thereafter that it will sign numerous OSA leases and generate
an increasing quarterly revenue stream. In May 1996, the Company began
implementing a reduction of the OSA, Inc. internal sales and marketing staff
servicing certain EM OSA markets. The Company will continue to market OSAs with
its internal staff to specialized markets and to the refinery industry.
In addition to the EM OSAs, the Company is generating a nominal amount of
revenue from its three refinery units located in Baton Rouge, Louisiana. The
Company believes that since January 1996, it has met refinery requirements for
instrument reliability and repeatability and that it has successfully
developed a prototype refinery unit.
Based on favorable test results from the ongoing and rigorous testing
procedures being currently performed by the refinery, as well as recently
installed instrument and software enhancements, the Company believes that it
will receive additional purchase orders for refinery OSA units from one or more
oil refineries.
8
<PAGE>
TOP SOURCE TECHNOLOGIES, INC.
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF INTERIM FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued
Liquidity and Capital Resources
Net cash used in operating activities was ($1,777,429) for the six months
ended March 31, 1996. This usage of cash was attributable to a net operating
loss excluding depreciation and amortization of $431,790, an increase in
inventories of $590,137 due to the model year changeover on the Chrysler Jeep
Wrangler, a decrease in accounts payable and accrued liabilities of $877,300,
and an increase in accounts receivable and other assets of $119,305. This was
partially offset by a decrease in prepaid expenses of $74,476 and an increase in
the tax valuation allowance of $150,000.
Net cash used in investing activities was ($268,622) of which $702,578 was
expended for capital assets and $465,222 related to the reimbursement of tooling
costs. Net cash provided by financing activities was $1,804,641 which consisted
of net proceeds from sales of common stock through exercise of stock options of
$844,641 and net proceeds of $960,000 from the remaining senior subordinated
convertible notes.
The Company has bank financing with First Union National Bank of Florida
("the Bank"). On October 12, 1995, the Company increased its line of credit with
the Bank to $6,000,000 with $1,500,000 being available for short term working
capital and $4,500,000 to be used exclusively for the purchase of OSAs. The
entire facility bears interest at .85% over the prime rate, is governed by
specific financial covenants and ratios limiting accessibility, and is secured
by substantially all of the assets of the Company. On January 31, 1996, the
working capital line of credit of 1,500,000 was renewed until January 31, 1997.
The $4,500,000 line expires on December 31, 1997. The Company has expanded its
credit facility with the Bank in order to be able to finance the roll-out of the
OSAs and purchase OSAs from Thermo Jarrell Ash ("TJA") based on anticipated
orders from customers. As of the date of this report, no amounts are
outstanding on either line.
On April 23, 1996, the Company signed a purchase commitment with TJA for
the shipment of 16 additional OSA units. These OSA units are scheduled to be
delivered on a monthly basis through September 1996.
Based on current cash balances, current bank lines and company-wide cost
reductions that began in May 1996, the Company believes it has sufficient cash
flow to fund its current operations and finance the deployment of a substantial
number of OSA units.
9
<PAGE>
TOP SOURCE TECHNOLOGIES, INC.
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF INTERIM FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued
Forward-Looking Statements
The statements discussed above under Results of Operations and Liquidity
and Capital Resources relating to the Company's expectations that it anticipates
(1) the continued accelerated ramp-up of Chrysler's production of Jeep Wrangler
units, (2) increased TSA sales, (3) signing numerous OSA leases and generating
increasing revenue from OSAs and receiving additional purchase orders for
refinery OSA units, (4) entering into strategic relationships, and (5)
improvements in the Company's liquidity are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934.
As the text above discusses, the results expected by any or all of these
forward-looking statements may not occur. Important factors that could cause
actual results to differ materially from the forward-looking statements include
the following: (1 ) the continuation of current production levels at Chrysler
for vehicles installing OHSS, (2) the continued reliability of the OSA
technology over an extended period of time, (3) the Company's ability to market
OSAs to both refineries and third parties that use oil analysis for equipment
maintenance, (4) the acceptance of the OSA technology by the marketplace, (5)
the general tendency of large corporations to slowly change from known
technology to emerging new technology, (6) the Company's reliance on a third
party to manufacture OSAs, (7) potential future competition from third parties
that may develop proprietary technology which either does not violate the
Company's proprietary rights or is claimed not to violate the Company's
proprietary rights, and (8) and unanticipated business or legal disagreements
which impede entry into one or more strategic alliances.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In April 1994, the Company filed an action against Professional Services
Industries, Inc. ("PSI") in federal court alleging breach of contract in
connection with the Company's acquisition of assets from PSI in 1993. On June
26, 1995, PSI paid the Company $229,500 without any conditions attached, in
anticipation of the Company dismissing the lawsuit against PSI. After a trial on
the merits, the Court ruled in favor of the Company and awarded it additional
damages of $56,367 after crediting PSI for the voluntary payment of $229,500
made to the Company prior to the trial. The amount of $56,367 has been
classified in the Company's financial statements for the six months ended March
31, 1996 as "Other Income." Due to the nature and length of time of the appeals
process, the Company has not recorded any receivables or income related to the
potential recovery of additional amounts in the suit.
The Company and its counsel believe it should have been awarded an
additional $378,000 plus interest and legal fees and has filed an appeal in the
United States Court of Appeals in Atlanta, Georgia. In addition to any
out-of-pocket costs incurred by its attorneys (located in Atlanta), the
Company's maximum exposure for legal fees is $7,500. The balance of any legal
fees owed will be recovered by the Company's counsel on a contingency fee basis
in the event the Company is successful in its appeal.
10
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TOP SOURCE TECHNOLOGIES, INC.
FORM 10-Q
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On March 15, 1996 the shareholder's approved the following proposals at the
Annual Shareholder's Meeting:
BROKER
FOR AGAINST ABSTENTIONS NON-VOTES
Elected nominees to the
Board of Directors of
the Company to serve until
the Company's next annual
meeting
Nominees:
Ronald P. Burd 23,099,103 152,350 202,997 0
Clinton D. Lauer 23,123,628 127,825 202,997 0
Paul F. Moore 23,231,753 19,700 202,997 0
The following
directors' terms
will continue until
their applicable terms
expire:
Carlton Joyce
Arthur S. Kirsch
Stuart Landow
David Natan
Christer Rosen
Mani A. Sadeghi
Ratified the appointment
of Arthur Anderson LLP as
independent auditors for
the fiscal year ended
Sept. 30, 1996 23,329,269 49,676 75,505 0
Approved the transaction
of other lawful business
that may properly come
before the meeting 22,231,201 940,837 282,412 0
Total shares voted: 23,454,450
Total shares eligible: 27,891,943
11
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TOP SOURCE TECHNOLOGIES, INC.
FORM 10-Q
ITEM 6...EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
27.0 Financial Data Schedule
b. Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended March 31,1996.
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.
TOP SOURCE TECHNOLOGIES, INC.
/s/DAVID NATAN
By: _____________________________
David Natan
Vice President and Chief Financial Officer
Dated: May 15, 1996
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Sep-30-1996
<PERIOD-END> Mar-31-1996
<CASH> $ 912,727
<SECURITIES> 0
<RECEIVABLES> 3,537,912
<ALLOWANCES> 83,650
<INVENTORY> 1,058,306
<CURRENT-ASSETS> 6,044,433
<PP&E> 2,800,696
<DEPRECIATION> 2,289,604
<TOTAL-ASSETS> 18,875,041
<CURRENT-LIABILITIES> 1,903,041
<BONDS> 0
0
0
<COMMON> 28,192
<OTHER-SE> 13,923,808
<TOTAL-LIABILITY-AND-EQUITY> 18,875,041
<SALES> 9,029,890
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<INCOME-TAX> (182,500)
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<EPS-PRIMARY> (0.05)
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</TABLE>
