<PAGE> 1
UNITED STATES
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, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER
1-9812
TENERA, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 94-3022241
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2001 Center Street, Berkeley, California 94704
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (510) 845-5200
_________________________
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Depositary Units Representing Limited Partners' Interests
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
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 .
------- -------
The number of Depositary Units outstanding on March 31, 1995, was 9,351,284.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 6
PART II OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . *
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
__________________________________
* None.
i
<PAGE> 3
TENERA, L.P.
COMBINED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per unit amounts)
<TABLE>
<CAPTION>
______________________________________________________________________________________________________
Three Months Ended March 31,
-----------------------------
1995 1994
______________________________________________________________________________________________________
<S> <C> <C>
Revenue .............................................................. $ 5,344 $ 7,079
Direct Costs ......................................................... 3,199 4,312
General and Administrative Expenses .................................. 1,956 2,636
Other Income ......................................................... 7 1
-------- ---------
Operating Income ................................................... 196 132
Interest Income ...................................................... -- 13
-------- ---------
Net Earnings ......................................................... $196 $ 145
======== =========
Net Earnings per Unit ................................................ $ 0.02 $ 0.02
======== =========
Weighted Average Number of Equivalent Units Outstanding .............. 9,541 9,588
======== =========
______________________________________________________________________________________________________
</TABLE>
See accompanying notes.
1
<PAGE> 4
TENERA, L.P.
COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
(In thousands, except unit amounts)
_________________________________________________________________________________________________________
March 31, December 31,
1995 1994
(Unaudited)
_________________________________________________________________________________________________________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 1,439 $ 1,943
Receivables, less allowances of $2,897 (1994 - $2,897)
Billed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,641 3,448
Unbilled . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,506 2,021
Other current assets . . . . . . . . . . . . . . . . . . . . . . . 758 681
------- -------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . 8,344 8,093
Property and Equipment, Net . . . . . . . . . . . . . . . . . . . . . 419 476
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 47
------- -------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,810 $ 8,616
======= =======
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
Bank loan payable, agreement in default . . . . . . . . . . . . . . $ 750 $ 750
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . 1,439 1,665
Accrued compensation and related expenses . . . . . . . . . . . . . 1,878 1,654
------- -------
Total Current Liabilities . . . . . . . . . . . . . . . . . . . 4,067 4,069
Partners' Capital
General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . 316 312
Limited Partners' Units issued and outstanding - 9,351,284
(1994 - 9,351,284) . . . . . . . . . . . . . . . . . . . . . . . . . 5,568 5,376
Treasury Units - 425,636 (1994 - 425,636) . . . . . . . . . . . . . (1,141) (1,141)
------- -------
Total Partners' Capital . . . . . . . . . . . . . . . . . . . 4,743 4,547
------- -------
Total Liabilities and Partners' Capital . . . . . . . . . . . . $ 8,810 $ 8,616
======= =======
_______________________________________________________________________________________________________
See accompanying notes.
</TABLE>
2
<PAGE> 5
TENERA, L.P.
COMBINED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(UNAUDITED)
<TABLE>
<CAPTION>
(In thousands, except unit amounts)
_________________________________________________________________________________________________________
General Limited Treasury
Partner Partners Units Total
_________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
December 31, 1994 . . . . . . . . $ 312 $ 5,376 $ (1,141) $ 4,547
Net Earnings . . . . . . . . . . . 4 192 -- 196
------- -------- --------- ---------
March 31, 1995 . . . . . . . . . . $ 316 $ 5,568 $ (1,141) $ 4,743
======= ========= ========= =========
_________________________________________________________________________________________________________
See accompanying notes.
</TABLE>
3
<PAGE> 6
TENERA, L.P.
COMBINED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(In thousands)
_______________________________________________________________________________________________________
Three Months Ended March 31,
----------------------------
1995 1994
______________________________________________________________________________________________________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 196 $ 145
Adjustments to reconcile net earnings to cash provided (used) by
operating activities
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 78 100
Gain on sale of equipment . . . . . . . . . . . . . . . . . . . (7) --
Decrease in allowance for sales adjustments . . . . . . . . . . -- (368)
Amortization of Limited Partners' notes . . . . . . . . . . . . -- 4
Changes in assets and liabilities:
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . (678) (265)
Other current assets . . . . . . . . . . . . . . . . . . . . (77) 26
Other assets . . . . . . . . . . . . . . . . . . . . . . . . -- (7)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . (226) 579
Accrued compensation and related expenses . . . . . . . . . . 224 (48)
------- -------
Net Cash (Used) Provided by Operating Activities . . . . . (490) 166
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of equipment . . . . . . . . . . . . . . . . . . . . . (21) (112)
Proceeds from sale of equipment . . . . . . . . . . . . . . . . . 7 --
------- -------
Net Cash Used in Investing Activities . . . . . . . . . . . (14) (112)
CASH FLOWS FROM FINANCING ACTIVITIES
Net repurchase of Units . . . . . . . . . . . . . . . . . . . . . -- (73)
------- -------
Net Cash Used by Financing Activities . . . . . . . . . . . -- (73)
------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . (504) (19)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . . . . . . . . . 1,943 1,580
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . . . . . . $ 1,439 $ 1,561
======= =======
_____________________________________________________________________________________________________
See accompanying notes.
</TABLE>
4
<PAGE> 7
TENERA, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS
MARCH 31, 1995 AND 1994
(UNAUDITED)
NOTE 1. ORGANIZATION
TENERA, L.P. (the Partnership), a Delaware limited partnership, operates its
business through TENERA Operating Company, L.P. (the Operating Partnership), a
Delaware limited partnership. Teknekron Technology MLP I Corporation, a
Delaware corporation (the General Partner) holds a 1% general partners'
ownership interest in the Partnership and the Operating Partnership,
representing a 1.99% interest in the profits, losses, and distributions of such
partnerships on a combined basis.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation. The combined balance sheet as of March 31, 1995, and
the combined statements of operations, changes in partners' capital, and cash
flows for the three-month periods ended March 31, 1995 and 1994, have been
prepared by the Partnership without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position at March 31, 1995, and the results of
operations and cash flows at March 31, 1995 and 1994, have been made. The
accompanying financial statements should be read in conjunction with the
financial statements and notes thereto contained in the Form 10-K of the
Partnership for the year ended December 31, 1994.
Earnings per Unit. Earnings per unit are computed on the basis of the
weighted average number of equivalent units outstanding during each period.
Limited partner units total 9,351,284 units at March 31, 1995, and represent
98.01% of the partnership interest, with the remaining 1.99% being represented
by the General Partners' interest. Average equivalent units of 9,541,153 units
at March 31, 1995, were used to calculate net earnings per unit, representing
both the General and Limited Partners' interest in earnings and unit
equivalents of dilutive unit options.
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
TENERA, L.P.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
_______________________________________________________________________________________________________________
Percent
Increase
(Decrease)
from
Percent of Revenue Prior Year
----------------------- ---------
Quarter Ended March 31,
-----------------------
1995 1994
______________________________________________________________________________________________________________
<S> <C> <C> <C>
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% 100.0% (24.5)%
Direct Costs . . . . . . . . . . . . . . . . . . . . . . . . . 59.9 60.9 (25.8)
General and Administrative Expenses . . . . . . . . . . . . . . 36.6 37.2 (25.8)
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 -- (600.0)
------ ------ ------
Operating Income . . . . . . . . . . . . . . . . . . . . . . 3.7 1.9 48.5
Interest Income . . . . . . . . . . . . . . . . . . . . . . . -- 0.2 (100.0)
------ ------ ------
Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . 3.7% 2.1% 35.2%
====== ====== ======
______________________________________________________________________________________________________________
</TABLE>
RESULTS OF OPERATIONS
Lower revenue in the first quarter of 1995 was offset by lower direct costs
and general and administrative expenses, resulting in an increase in net
earnings to $196,000 in 1995 from $145,000 in 1994.
The revenue decrease is primarily a result of significantly reduced overall
technical services sales and staffing throughout the Company compared to 1994.
The number of clients served during the respective quarters, however, remained
relatively constant at 53 in 1995 compared to 50 in 1994. Concentration of
revenue from the government sector rose only slightly to 34% of total revenue
in 1995 from 32% in 1994, while software revenue remained level at 17% of total
revenue for the respective quarters.
Direct costs were lower overall reflecting the reduced revenue levels.
Gross margin contribution from overall project activity increased slightly to
approximately 40% in 1995 from 39% in 1994, primarily reflecting improved
pricing and percentage of completion efforts in software services slightly
offset by lower pricing rate structures in the government sector.
General and administrative expenses decreased by $680,000 versus 1994,
primarily due to overall reduced staff size, professional services, travel, and
office equipment costs in 1995. The pace of these cost reductions exceeded the
revenue decline resulting in a slight drop in general and administrative
expenses as a percentage of revenue to 36.6% from 37.2% in 1994.
Other income includes a gain on the sale of assets related to facility
downsizing ($7,000).
Net interest income represents earnings from the investment of cash balances
in short-term, high quality, corporate debt instruments, offset by interest
charges on borrowing under the Partnership's line of credit. The Partnership
had outstanding borrowing of $750,000 under its line of credit at the end of
the period in 1995 and no outstanding borrowing at the end of the period in
1994.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $504,000 during the first quarter of
1995. The decrease was due to cash used by operations ($490,000) and net
acquisition of equipment ($14,000).
6
<PAGE> 9
Receivables increased by $678,000 from December 31, 1994, primarily due
to an increase in revenue of $1,198,000 during the first quarter of 1995
compared to the fourth quarter of 1994. The allowance for sales adjustments
remained unchanged from December 31, 1994.
Accounts payable and accrued compensation and related expenses remained
essentially unchanged from December 31, 1994.
Partners' capital increased by $196,000 in the period from the net
earnings.
No cash distribution was declared in 1995.
The impact of inflation on revenue and projects of the Partnership was
minimal.
At March 31, 1995, the Partnership had a $5,000,000 revolving loan facility
which expires in May 1995. The Partnership has outstanding borrowing against
the line totaling $750,000; and in addition, $175,000 was assigned to support
standby letters of credit. Under the agreement, the Partnership is obligated
to comply with certain covenants related to equity, current ratio, debt/equity
ratio, and profits. At December 31, 1994 and March 31, 1995, the Partnership
was unable to obtain waivers from the lender with respect to certain financial
covenants in the loan agreement concerning annual profitability and partner's
capital, which the Partnership did not satisfy as of these dates. The lender
has notified the Partnership that no further advances under the agreement will
be made without their approval.
Management believes that cash expected to be generated by operations, and
the Partnership's working capital, are adequate to meet its anticipated
liquidity needs through December 31, 1995. The Partnership has received a
commitment from a new lender to provide a loan facility upon expiration of the
current facility.
7
<PAGE> 10
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
11.0 Statement regarding computation of per unit earnings: See Notes
to Combined Financial Statements.
(B) REPORTS ON FORM 8-K
None.
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.
Dated: May 10, 1995
TENERA, L.P.
By JEFFREY R. HAZARIAN
----------------------------------------
Jeffrey R. Hazarian
Chief Financial Officer,
Corporate Secretary of the General Partner, and
Vice President, Finance of
Teknekron Technology MLP I Corporation, General Partner
8
<PAGE> 11
Exhibit Index
Ex. 27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,439
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 2,897
<INVENTORY> 0
<CURRENT-ASSETS> 8,344
<PP&E> 419
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,810
<CURRENT-LIABILITIES> 4,067
<BONDS> 0
<COMMON> 4,743
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 8,810
<SALES> 0
<TOTAL-REVENUES> 5,344
<CGS> 0
<TOTAL-COSTS> 3,199
<OTHER-EXPENSES> 1,949
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 196
<INCOME-TAX> 0
<INCOME-CONTINUING> 196
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 196
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
