<PAGE> 1
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDING DECEMBER 31, 1995
Commission File Number: 0-15692
TOTAL RESEARCH CORPORATION
--------------------------
(Exact name of Registrant as specified in Charter)
DELAWARE 22-2072212
-------- ----------
(State of Incorporation) (IRS Employer Identification No.)
Princeton Corporate Center, 5 Independence Way
Princeton, New Jersey 08543-5305
--------------------- --------------
(Address of principal executive offices) (Zip Code)
(609) 520-9100
(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 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
----------- -----------
Common Stock, $.001 Par Value - 9,880,708 as of February 13, 1996
<PAGE> 2
TOTAL RESEARCH CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995
---- ----
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 46,837 $ 128,071
Accounts receivable, less allowance for doubtful accounts
of $58,625 at December 31, 1995 and $58,625 at June 30, 1995 4,554,623 3,578,493
Costs and estimated earnings in excess of billings on
uncompleted contracts 1,969,728 1,685,041
Deferred Taxes 270,478 270,478
Other current assets 483,886 375,209
----------- -----------
Total current assets 7,325,552 6,037,292
----------- -----------
Fixed assets, less accumulated depreciation of $2,431,770
at December 31, 1995 and $2,237,727 at June 30, 1995 2,338,959 2,101,383
Capitalized market research products, less accumulated
amortization of $486,402 at September 30, 1995 and
$436,402 at June 30, 1995 479,404 357,458
Deferred data accumulation costs, net of accumulated depreciation of
$988,939 at December 31, 1995 and $770,300 at June 30, 1995 850,046 858,223
Goodwill, net of accumulated amortization of $106,830 at
December 31, 1995 and $71,220 at June 30, 1995 1,811,123 1,734,233
Deferred taxes 439,043 433,082
Other assets 175,353 220,920
----------- -----------
Total assets $13,419,480 $11,742,591
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of notes payable $ 1,032,688 $ 1,666,056
Accounts payable 1,492,324 1,686,193
Accrued expenses 1,515,973 1,277,492
Billings in excess of earnings 2,219,304 1,068,280
Income taxes payable 31,968 128,496
----------- -----------
Total current liabilities 6,292,257 5,826,517
----------- -----------
Long-term liabilities
Capital lease obligations 88,174 44,350
Notes payable 2,379,973 1,361,258
Other long-term liabilities 104,802 187,780
----------- -----------
Total liabilities 8,865,206 7,419,905
Shareholders' equity
Common stock-authorized 20,000,000 shares $.001 par value, 9,870,708 shares
issued and outstanding at December 31, 1995 and
9,822,708 shares issued and outstanding at June 30, 1995 9,871 9,823
Additional paid-in capital 3,501,781 3,470,429
Cumulative translation adjustment (18,612) (36,799)
Retained earnings 1,061,234 879,233
----------- -----------
Total shareholders' equity 4,554,274 4,322,686
Total liabilities and shareholders' equity $13,419,480 $11,742,591
=========== ===========
</TABLE>
See notes to Consolidated Financial Statements
<PAGE> 3
TOTAL RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
December 31, December 31, December 31, December 31,
1995 1994* 1995 1994*
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 5,741,807 $ 5,098,469 $11,046,934 $9,417,719
Direct costs 2,574,202 2,365,780 5,060,327 4,194,155
----------- ----------- ----------- ----------
Gross profit 3,167,605 2,732,689 5,986,607 5,223,564
Operating expenses 3,033,347 2,179,540 5,467,474 4,361,221
----------- ----------- ----------- ----------
Income from operations 134,258 553,149 519,133 862,343
Interest expense (102,121) (54,755) (184,178) (79,155)
Other income (expense), net (15,241) - (45,241) 1,965
------------ ----------- ----------- ----------
Income before taxes 16,896 498,394 289,714 785,153
Provision (benefit) for income taxes 9,993 213,686 107,713 319,965
----------- ----------- ----------- ----------
Net income $ 6,903 $ 284,708 $ 182,001 $ 465,188
----------- ----------- ----------- ----------
Weighted average common shares
outstanding 10,396,715 10,019,447 10,410,916 9,939,009
Net Income per Weighted
average common share $ - $ 0.03 $ 0.02 $ 0.05
</TABLE>
* - Restated
See notes to the consolidated financial statements
<PAGE> 4
TOTAL RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
----------------
December 31, December 31,
1995 1994*
---- -----
<S> <C> <C>
Cash flows from operating activities:
Net income 182,001 465,188
Adjustments to reconcile net income to cash
provided by operating activities
Depreciation 421,686 394,929
Amortization 85,900 65,488
Changes in assets and liabilities
Accretion of warrants 8,000 8,000
Adjustment for foreign currency translation 18,187 45,991
(Increase) decrease in assets
Accounts receivable (755,431) 245,576
Cost and estimated earnings in
excess of billings on uncompleted contracts (190,020) (246,370)
Other assets (69,071) 5,957
Increase (decrease) in liabilities
Accounts payable (193,869) 52,231
Accrued expenses 202,871 (83,796)
Billings in excess of earnings 1,043,480 355,310
Income taxes payable 96,528 (30,863)
Other liabilities (190,425) (25,225)
----------- -----------
Net cash provided by operating activities 659,837 1,252,416
Cash flows from investing activities:
Purchases of equipment (453,431) (367,226)
Cash expended for capitalized market
research products (140,030) (35,375)
Acquisition of certain assets of BMS and Carlson,
net of cash acquired (286,965) (1,654,858)
Deferred data accumulation costs (221,645) (169,500)
----------- -----------
Net cash used by investing activities (1,102,071) (2,226,959)
Cash flows from financing activities:
Repayment of debt (4,428,262) (2,898,379)
Proceeds from long-term debt 4,748,012 3,355,000
Payment under capital lease obligations, net 9,850 5,593
Proceeds from issuance of common stock 31,400 80,355
----------- -----------
Net cash provided by (used in) financing
activities 361,000 542,569
Net increase (decrease) in cash and cash
equivalents (81,234) (431,974)
Cash and cash equivalents at beginning of period 128,071 671,646
----------- -----------
Cash and cash equivalents at end of period $ 46,837 $ 239,672
----------- -----------
</TABLE>
* - Restated
See notes to the consolidated financial statements
<PAGE> 5
TOTAL RESEARCH CORPORATION
Notes to Financial Statements
December 31, 1995 and 1994
Note 1 - Basis of Presentation
The accompanying unaudited financial statements 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 of 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. Operating results for the three months ended December 31, 1995
are not necessarily indicative of the results that may be expected for the year
ended June 30, 1996.
Note 2 - Presentation of European Subsidiary - TR-Europe
The summary of financial information, set forth below should be read in
conjunction with the consolidated financial statements as of and for the period
ended December 31, 1995 and December 31, 1994. The following summarizes
information on TR-Europe's Statement of Income, converted to U.S. Dollars using
a weighted average exchange rate of $1.56 and $1.55, for the six month periods
ended December 31, 1995 and 1994, respectively and a weighted average exchange
rate of $1.54 and $1.55 for the three month periods ended December 31, 1995
and 1994, respectively.
<TABLE>
<CAPTION>
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues 1,344,463 862,140 3,066,084 1,594,435
Direct Costs 647,106 422,245 1,570,285 780,896
--------- ------- --------- ---------
Gross Profit 697,357 439,895 1,495,799 813,539
Operating Expenses 673,805 404,456 1,323,597 698,065
--------- ------- --------- ---------
Income from Operations 23,552 35,439 172,202 115,474
Income Taxes 16,927 8,675 58,549 28,866
--------- ------- --------- ---------
Net Income 6,625 26,764 113,653 86,608
</TABLE>
<PAGE> 6
Note 3 - Measurement of Goodwill
Goodwill has been recorded in relation to the excess of the purchase price over
the fair values of the identified assets acquired. The Company amortizes
goodwill over twenty-five years. The carrying value of goodwill is evaluated
periodically in relation to the operating performance and future undiscounted
net cash flows of the underlying business. Adjustments are recorded if the sum
of the expected future net cash flows is less than the book value of the
goodwill.
Note 4 - Acquisition of Carlson Research Company
On November 27, 1995, the Company closed a transaction to acquire the assets of
the Carlson Research Company ("CRC"), a division of Carlson Marketing Group.
CRC provides market research services to a variety of companies, including
Carlson Marketing Group. The purchase price was approximately $287,000, paid
at closing, and the terms of the acquisition also provide for contingent
payments to be made for periods through December 31, 1999 dependent upon the
achievement of certain sales volumes in connection with the alliance between
the Company and the Carlson Marketing Group.
The Company funded the acquisition with term debt secured through United Jersey
Bank.
<PAGE> 7
PART II - MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Result of Operations - Second Quarter Fiscal 1996 as Compared to Second Quarter
Fiscal 1995.
<TABLE>
<CAPTION>
Statement of Income Data:
- -------------------------
(Expressed as a percentage of revenues)
Three Months Ended
---------------------
December 31,
---------------------
1995 1994
---- ----
<S> <C> <C>
Revenues 100.0% 100.0%
Direct costs 44.8% 46.4%
----- -----
Gross profit 55.2% 53.6%
Operating expenses 52.8% 42.7%
----- -----
Income from operations 2.4% 10.9%
Interest expense 1.8% 1.1%
Other income (expense), net (0.3%) 0.0%
----- -----
Income before income taxes .3% 9.8%
Provision for income taxes .2% 4.2%
----- -----
Net income .1% 5.6%
</TABLE>
Revenues for the second quarter of fiscal 1996 increased 12.6% or $643,338
versus the same quarter in the prior year, to $5,741,807. This increase in
revenue is the result of a significant increase in revenues from its European
division as well as increasing revenues in its Quality Management and Health
Care divisions. The Company's Consumer Research and Information Technologies
divisions revenues were below last year's level. The decline in revenues in the
Consumer Research Services division during the second quarter of fiscal 1996
can be attributed to the management focus in the division on the development of
new products. This division, which markets the Company's EQUITREND product,
invested heavily in the second half of fiscal 1995 and the first half of fiscal
1996 in developing new products using the EQUITREND database that it introduced
in the first quarter of fiscal 1996.
The Company's outlook for the remainder of fiscal year 1996 is for improvement
in operating results based on increasing revenues due to increasing clients and
capabilities (including its recent acquisition of Carlson Research Company),
its commitment to its internal total quality management program (which includes
a focus on re-engineering its research processes to improve profitability and
customer satisfaction on projects), its commitment to develop cutting-edge
predictive market research products and its efforts to reduce its general and
administrative expenses as a percentage of total revenues.
The Company defines backlog as the unearned portions of its existing contracts
at each balance sheet date. The Company's backlog at December 31, 1995 was
approximately $8,000,000 as compared to a backlog of approximately $7,300,000
at June 30, 1995 and approximately $5,600,000 at December 31, 1994. The amount
of backlog at any time may not be indicative of intermediate or long-term
trends in the Company's operations.
Direct costs for the second quarter of fiscal 1996 totaled $2,574,202, an
increase of 8.8% or $208,422 versus the prior year's total of $2,365,780. As
such, they were 44.8% of revenues, as compared to 46.4% of revenues in the
prior year. This decrease in direct costs as a percentage of revenues is the
result of the Company's overall change in the mix of work it performed during
the second quarter of fiscal 1996 versus the second quarter of fiscal 1995. In
the second quarter of fiscal 1996 the Company delivered a greater percentage of
qualitative business, which is typically more labor intensive and, therefore,
generates higher gross margins as compared to the equivalent quarter in fiscal
1995.
<PAGE> 8
Operating expenses for the second quarter of fiscal 1996 totaled $3,033,347, an
increase of 39.2% or $853,807 over the same quarter in the prior year. The
increase can be attributed to costs associated with the negotiation and
integration of the acquisition of Carlson Research Company, the payroll costs
associated with the investment in staffing for new levels of business the
Company is experiencing, especially in the European division., corporate
development costs, additional sales costs, costs associated with automation of
the management information systems as well as additional fringe benefits costs.
Expressed as a percent of revenue, operating expenses increased to 52.8% of
revenue in the second quarter of fiscal 1996, versus 42.8% in the second
quarter of fiscal 1995. Expressed as a percentage of gross profit, operating
expenses increased to 95.8% of gross profit in the second quarter of fiscal
1996, versus 79.8% in the first quarter of fiscal 1995.
Income from operations decreased $418,891 to $134,258 during the second quarter
of fiscal 1996, as compared to $553,149 during the second quarter of fiscal
1995, for all the reasons set forth herein.
The Company's interest expenses increased $47,366 in the second quarter of
fiscal 1996 to $102,121, as compared to $54,755 in the second quarter of fiscal
1995, as a result of the funding of the acquisitions of TR - Europe and
Carlson Research Company and the funding of additional working capital related
to the Company's growth.
Other income (expense) totaled ($15,241) for the second quarter of fiscal
1996, a decrease of $15,246 versus income of $5 during the second quarter of
fiscal 1995, due primarily to the reserve for non-recurring professional
expenses. Also included is licensing income of approximately $10,000 earned by
the Company as the result of its licensing arrangement with TRCA in Argentina.
Income before taxes totaled $16,896 for the second quarter of fiscal 1996
versus $498,399 in the second quarter of fiscal 1995 for the reasons set forth
above. The income tax provision for the second quarter of fiscal 1996 was
$9,993, versus $213,686 for the second quarter of fiscal 1995 due to the
decreased earnings of the Company.
Net income for the second quarter of fiscal 1996 was $6,903, or $.00 per share,
versus earnings of $284,713, or $.03 per share for the second quarter of fiscal
1995.
Result of Operations - Six Months Year to Date Fiscal 1996 as compared to Six
Months Year to Date Fiscal 1995
Statement of Income Data:
(Expressed as a percentage of revenues)
<TABLE>
<CAPTION>
Six Months Ended
----------------
December 31,
------------
1995 1994
---- ----
<S> <C> <C>
Revenues 100.0% 100.0%
Direct costs 45.8% 44.5%
----- -----
Gross profit 54.2% 55.5%
Operating expenses 49.5% 46.4%
----- -----
Income from operations 4.7% 9.1%
Interest expense 1.7% 0.8%
Other income (expense), net (0.4%) 0.0%
----- -----
Income before income taxes 2.6% 8.3%
Provision for income taxes 1.0% 3.4%
----- -----
Net income 1.6% 4.9%
</TABLE>
<PAGE> 9
Revenues for the first six months of fiscal 1996 increased 17% or $1,629,215
versus the same six months in the prior year, to $11,046,934. This increase in
revenue is the result of a significant increase in revenues from its European
division as well as increasing revenues in its Quality Management and Health
Care. The Company's Consumer Research and Information Technologies divisions
revenues were below last year's level. The decline in revenues in the Consumer
Research Services division during the first quarter of fiscal 1996 can be
attributed to the management focus in the division on the development of new
products. This division, which markets the Company's EQUITREND product,
invested heavily in the second half of fiscal 1995 in developing new products
using the EQUITREND database that it has introduced in the first quarter of
fiscal 1996.
The Company defines backlog as the unearned portions of its existing contracts
at each balance sheet date. The Company's backlog at December 31, 1995 was
approximately $8,000,000 as compared to a backlog of approximately $7,400,000
at September 30, 1995, $7,300,000 at June 30, 1995 and approximately
$5,600,000 at December 31, 1994. The amount of backlog at any time may not be
indicative of intermediate or long-term trends in the Company's operations.
Direct costs increased 21% or $866,172 for the first six months of fiscal 1996
to $5,060,327 versus the prior year's six month total of $4,194,155. As such,
they were 45.8% of revenues, as compared to 44.5% of revenues in the prior
year. This increase in direct costs as a percentage of revenues is the result
of the Company's overall change in the mix of work it performed during the
first six months of fiscal 1996 versus the first six months of fiscal 1995.
The Company delivered a much greater percentage of quantitative business during
the first quarter, which typically includes substantial out-of-pocket expenses
for data collection versus qualitative business, which is typically more labor
intensive and, therefore, generates higher gross margins. In the second
quarter of fiscal 1996, the mix shifted to increased qualitative business, and
the gross profit margins improved correspondingly.
Operating expenses for the first six months of fiscal 1996 totaled $5,467,474,
an increase of 25% or $1,106,253 over the first six months of fiscal 1995.
The increase can be attributed to the payroll costs associated with the
investment in staffing for new levels of business, especially in the European
division, the costs associated with the negotiation and integration of Carlson
Research Company, corporate development costs, additional sales costs, costs
associated with the automation of the management information systems, and
additional fringe benefit costs. Expressed as a percent of revenue, operating
expenses increased to 49.5% of revenue in the first six months of fiscal 1996,
versus 46.3% in the first six months of fiscal 1995. Expressed as a percentage
of gross profit, operating expenses increased to 91.3% of gross profit in the
first six months of fiscal 1996, versus 83.5% in the first six months of fiscal
1995.
Income from operations decreased $343,210 to $519,133 during the first six
months of fiscal 1996, as compared to $862,343 during the first six months of
fiscal 1995, for all the reasons set forth herein.
The Company's interest expense increased $105,023 in the first six months of
fiscal 1996 to $184,178, as compared to $79,155 in the first six months of
fiscal 1995, as a result of the funding of the acquisition of TR - Europe and
Carlson Research Company and the funding of additional working capital related
to the Company's growth.
Other income (expense) totaled ($45,241) for the first six months of fiscal
1996, a decrease of $47,206 versus income of $1,965 during the first six months
of fiscal 1995, due primarily to the reserve for non-recurring professional
services. Also included is licensing income of approximately $30,000 earned by
the Company as the result of its licensing arrangement with TRCA in Argentina.
Income before taxes totaled $289,714 for the first six months of fiscal 1996
versus $785,153 in the first six months of fiscal 1995 for the reasons set
forth above.
The income tax provision for the first six months of fiscal 1996 was $107,713,
versus $319,965 for the first six months of fiscal 1995 due to the decreased
earnings of the Company.
Net income for the first six months of fiscal 1996 was $182,001, or $.02 per
share, versus earnings of $465,188 or $.05 per share for the first six months
of fiscal 1995.
<PAGE> 10
Liquidity and Capital Resources
Working capital increased to $1,033,295, at December 31, 1995 from $(5,198) at
September 30, 1995, and $210,775 at June 30, 1995, and the current ratio
increased to 1.16 from 1.00 at September 30, 1995 and 1.04 at June 30, 1995.
The increase in working capital is attributable to a restructuring of the
Company's financing, as discussed below, which had the effect of decreasing the
current portion of the Company's debt by approximately $630,000 as compared to
the levels of June 30, 1995, and by the acceleration of billings of the
Company's clients which has resulted in higher receivables and improved cash
generation during the second quarter of fiscal 1996.
The Company's Notes Payable (both short term and long term) were approximately
$3.4 at December 31, 1995, compared to $3.6 million at September 30, 1995 and
$3.0 million at June 30, 1995, The reduction of working capital financing was
approximately $.05 million, net of the funding of the acquisition of Carlson
Research Company for approximately $287,000.
The structure of the Company's Notes payable was $2.38 million long-term and
$1.03 million short-term. The Company reached an agreement with United Jersey
Bank (UJB) of Princeton, NJ on a $4.75 million financing package to improve the
structure of its debt such that the long term debt reflects the Company's
investment in long-term assets, including its acquisitions of TR - Europe and
Carlson Research Company as well as its Capitalized Market Research Products.
Inflation had no material effect on the financial performance of the Company
during the periods reported.
In December 1995, and pursuant to restructuring of its debt with UJB the
Company revised its existing line of credit with UJB as follows:
A $1.25 million revolving line of credit capped at 50% of eligible
receivables (including standby letters of credit of approximately
$125,000). The interest rate is based on certain financial covenants
and is currently 1/2% above the prime rate. At December 31, 1995,
the Company had borrowed $0 against the revolving line of credit. The
Company is obligated to pay United Jersey Bank a commitment fee of
1/4% on the average unused amount of the revolving line of credit,
paid quarterly.
A three-year $3,000,000 term loan with equal principal payments of
$50,000 each month with a balloon payment on December 31, 1998. The
interest rate on this loan is fixed at 8.6% per annum.
A $500,000 term loan is available to the Company to finance the
purchase of certain fixed assets. This loan has not been drawn down.
The agreement with UJB executed in 1991 contained a provision that the Company
grant to UJB five-year warrants for 232,514 shares of the Company's common
stock at an exercise price of $1.75 per share. UJB continues to hold these
warrants.
The agreement with UJB executed on December 28, 1995 also contains
restrictions, one of which requires the Company to maintain certain financial
ratios. As of December 31, 1995, the Company has met these minimum ratios.
The Company also has a bank overdraft facility of L.300,000 with Coutts & Co in
London, England. This facility is charged at a rate of 3% above the UK Base
Rate. At December 31, 1995, the bank borrowings were at L.284,663
(approximately US$ 430,000) and the UK Base Rate was 6.75%.
Cash totaled $46,837 at December 31, 1995 versus $128,071 at June 30, 1995,
Net Accounts Receivable totaled $4,554,623 at December 31, 1995, compared to
$3,578,493 at the June 30, 1995, for a net increase of $976,130. The increase
in receivables is the result of an acceleration in the billing of clients in
the second quarter of fiscal 1995.
<PAGE> 11
Costs and estimated earnings in excess of billings on uncompleted contracts
totaled $1,969,728 at December 31, 1995, compared to $1,685,041 at June
30,1995, for a net increase of $284,687. The normal fluctuations in the billing
cycle of work-in-progress accounted for this increase.
Fixed assets at cost, less accumulated depreciation and amortization increased
by $237,576 at December 31, 1995 to $2,221,544, compared to $2,101,383 at June
30, 1995, due primarily to the expansion of the Company's London operations.
Capitalized Market Research Products, net increased by $121,946 at December 31,
1995 to $479,404, compared to $357,458 at June 30, 1995. The increase is the
result of several new products the Company is currently developing, notably the
Continuous EquiTrend product. The Company plans to introduce these products
during fiscal year 1996
Deferred Data Accumulation Costs decreased by $(8,177) at December 31, 1995 to
$850,046, compared to $858,223 at June 30, 1995. The relatively small
fluctuation represents the fact the Company is amortizing the historical costs
at approximately the same rate as data accumulation costs are incurred with
current product offerings.
Current portion of notes payable decreased by $633,368 at December 31, 1995 to
$1,032,688, compared to $1,666,056 at June 30, 1995. The decrease is due to
the restructuring of the Company's debt with UJB, as discussed above.
Accounts payable and accrued expenses increased by $44,612 at December 31, 1995
to $3,008,297, compared to $2,963,685 at June 30, 1995. The usual fluctuations
in the Company's business accounted for the change.
Billings in excess of earnings increased $1,151,024 at December 31, 1995 to
$2,219,304, compared to $1,068,280 at June 30, 1995. The acceleration of
billings to clients in the second quarter of fiscal 1996 accounted for this
increase.
Federal and state income taxes payable decreased $96,528 at December 31, 1995
to $31,968, compared to $128,496 at June 30, 1995, as a result of the reduced
earnings of the Company in the second quarter of fiscal 1996.
The long-term portion of lease obligations increased $43,824 at December 31
1995 to $88,174, compared to $44,350 at June 30, 1995. Leases assumed by TR -
Europe accounted for this increase.
Notes payable increased $1,018,715 at December 31, 1995 to $2,379,973, compared
to $1,361,258 at June 30, 1995. The increase is due to the restructuring of
the Company's financing with UJB, as discussed above.
<PAGE> 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal actions, proceedings or litigations pending or
threatened to the knowledge of the Company.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other information
None.
Item 6. Exhibits and Reports on Form 8-K:
A. None.
B. Form 8-K for the earliest event reported on October 13, 1995 concerning
the discussion of certain accounting principles.
As a subsequent event, Form 8-K for earliest report on February 7, 1996
pertaining to the change in accountants.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
undersigned has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOTAL RESEARCH CORPORATION
(Registrant)
/s/Lorin Zissman
---------------------------------------
BY: LORIN ZISSMAN,
CHIEF EXECUTIVE OFFICER
/s/John Parsons
---------------------------------------
BY: JOHN PARSONS,
CHIEF FINANCIAL OFFICER
Dated: February 13, 1996
<PAGE> 13
EXHIBIT INDEX
Exhibit 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 46,837
<SECURITIES> 0
<RECEIVABLES> 4,613,248
<ALLOWANCES> 58,625
<INVENTORY> 0
<CURRENT-ASSETS> 7,325,552
<PP&E> 4,770,729
<DEPRECIATION> 2,431,770
<TOTAL-ASSETS> 13,419,480
<CURRENT-LIABILITIES> 6,292,257
<BONDS> 0
0
0
<COMMON> 9,871
<OTHER-SE> 4,544,403
<TOTAL-LIABILITY-AND-EQUITY> 13,419,480
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<TOTAL-REVENUES> 11,046,934
<CGS> 0
<TOTAL-COSTS> 10,527,801
<OTHER-EXPENSES> 45,241
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 184,178
<INCOME-PRETAX> 289,714
<INCOME-TAX> 107,713
<INCOME-CONTINUING> 182,001
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 182,001
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
