<PAGE>
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 JUNE 30, 1997
[ ] 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, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 94-3213541
(STATE OF OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
One Market, Spear Tower, Suite 1850, San Francisco, California 94105-1018
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (415) 536-4744
_________________________________
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Common Stock
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 shares outstanding on June 30, 1997, was 10,123,153.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
PAGE
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) ............................. 1
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition ........................... 7
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings ............................................ 10
Item 2. Changes in Securities ........................................ *
Item 3. Defaults Upon Senior Securities .............................. *
Item 4. Submission of Matters to a Vote of Security Holders .......... 11
Item 5. Other Information ............................................ *
Item 6. Exhibits and Reports on Form 8-K ............................. 11
</TABLE>
- --------------------
* None.
i
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TENERA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
(In thousands, except per share amounts)
_____________________________________________________________________________________
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
1997 1996 1997 1996
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
Revenue ................................ $ 4,692 $ 6,036 $ 10,092 $ 13,292
Direct Costs ........................... 2,946 3,678 6,164 8,579
General and Administrative Expenses .... 2,391 2,502 4,371 4,612
Software Development Costs ............. 416 161 653 256
Other Income ........................... 20 17 21 21
Special Item ........................... -- 250 -- 250
--------- --------- --------- ---------
Operating (Loss) Income .............. (1,041) (38) (1,075) 116
Interest Income Net..................... 34 43 73 75
--------- --------- --------- ---------
Net (Loss) Earnings Before
Income Tax (Benefit) Expense ......... (1,007) 5 (1,002) 191
Income Tax (Benefit) Expense ........... (141) 2 (139) 76
--------- --------- --------- ---------
Net (Loss) Earnings .................... $ (866) $ 3 $ (863) $ 115
========= ========= ========= ========
Net (Loss) Earnings per Share .......... $ (0.09) $ 0.00 $ (0.09) $ 0.01
========= ========= ========= ========
Weighted Average Number of
Shares Outstanding ..................... 10,123 10,282 10,124 10,304
========= ========= ========= =========
_____________________________________________________________________________________
See accompanying notes.
</TABLE>
1
<PAGE>
TENERA, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
(In thousands, except share amounts)
__________________________________________________________________________________________
June 30, December 31,
1997 1996
__________________________________________________________________________________________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents .............................. $ 2,712 $ 3,964
Receivables, less allowance of $1,471 (1996 - $1,626):
Billed ............................................... 1,371 1,087
Unbilled ............................................. 1,516 2,032
Other current assets ................................... 677 534
---------- ----------
Total Current Assets ............................... 6,276 7,617
Property and Equipment, Net .............................. 366 323
---------- ----------
Total Assets ................................... $ 6,642 $ 7,940
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable ....................................... $ 1,019 $ 1,026
Accrued compensation and related expenses .............. 1,609 2,036
---------- ----------
Total Current Liabilities .......................... 2,628 3,062
Commitments and Contingencies
Shareholders' Equity
Common Stock, $0.01 par value, 25,000,000 authorized,
10,417,345 issued and outstanding
(1996 - 10,417,345 shares) ............................. 104 104
Paid in capital, in excess of par ...................... 5,698 5,698
Retained deficit ....................................... (1,482) (619)
Treasury stock - 294,192 shares
(1996 - 292,498 shares) ................................ (306) (305)
---------- ----------
Total Shareholders' Equity ....................... 4,014 4,878
---------- ----------
Total Liabilities and Shareholders' Equity ..... $ 6,642 $ 7,940
========== ==========
__________________________________________________________________________________________
See accompanying notes.
</TABLE>
2
<PAGE>
TENERA, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
(In thousands, except share amounts)
____________________________________________________________________________________
Paid In
Capital
In
Common Excess Retained Treasury
Stock of Par Earnings Stock Total
____________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
December 31, 1996 ................ $ 104 $ 5,698 $ (619) $ (305) $ 4,878
Repurchase of 1,694 Shares ....... -- -- -- (1) (1)
Net Earnings ..................... -- -- 3 -- 3
-------- -------- -------- -------- --------
March 31, 1997 ................... 104 5,698 (616) (306) 4,880
Net Loss ......................... -- -- (866) -- (866)
-------- -------- -------- -------- --------
June 30, 1997 .................... $ 104 $ 5,698 $(1,482) $ (306) $ 4,014
======== ======== ======== ======== ========
____________________________________________________________________________________
See accompanying notes.
</TABLE>
3
<PAGE>
TENERA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(In thousands)
_____________________________________________________________________________________
Six Months Ended
June 30,
-----------------------
1997 1996
_____________________________________________________________________________________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) earnings ...................................... $ (863) $ 115
Adjustments to reconcile net (loss) earnings to
cash (used) provided by operating activities:
Depreciation ........................................... 136 139
Gain on sale of equipment .............................. (21) (4)
Decrease in allowance for sales adjustments ............ (155) (56)
Changes in assets and liabilities:
Receivables .......................................... 387 4,191
Other current assets ................................. (143) (200)
Other assets ......................................... -- 17
Accounts payable ..................................... (7) (516)
Accrued compensation and related expenses ............ (427) (321)
Income taxes payable ................................. -- (116)
-------- --------
Net Cash (Used) Provided By Operating Activities ... (1,093) 3,249
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment .................... (179) (125)
Proceeds from sale of equipment .......................... 21 4
-------- --------
Net Cash Used in Investing Activities .............. (158) (121)
CASH FLOWS FROM FINANCING ACTIVITIES
Net repurchase of equity ................................. (1) (172)
-------- --------
Net Cash Used by Financing Activities .............. (1) (172)
-------- --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ....... (1,252) 2,956
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ........... 3,964 1,474
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ................. $ 2,712 $ 4,430
======== ========
_____________________________________________________________________________________
See accompanying notes.
</TABLE>
4
<PAGE>
TENERA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1997 and 1996
(Unaudited)
NOTE 1. ORGANIZATION
Company. TENERA, Inc. (the "Company"), a Delaware corporation, provides a
broad range of professional services and software products to solve complex
management, engineering, environmental, and safety challenges associated with
the licensing, operation, asset management, and maintenance of power plants
and mass transit systems. The services and products of its operating
subsidiaries cover the following general areas: consulting and management
services and software services, products, and systems.
TENERA Rocky Flats, LLC ("Rocky Flats"), a Colorado limited liability
company, was formed by the Company in 1995, to provide consulting services in
connection with participation in the Performance Based Integrating Management
Contract ("Rocky Flats Contract") at the Department of Energy's ("DOE")
Rocky Flats Environmental Technology Site. In May 1997, the Company's other
government business was consolidated within the Rocky Flats subsidiary. This
business provides consulting and management services to the DOE directly and
through subcontracts with DOE prime contractors. These services provide
assistance to DOE-owned nuclear facilities in devising, implementing, and
monitoring strategies to upgrade from an operational, safety, and
environmental perspective.
TENERA Energy, LLC ("Energy"), a Delaware limited liability company, was
formed by the Company in May 1997, to consolidate its commercial electric
power utility business into a separate legal structure. The Energy subsidiary
provides consulting and management services in organizational effectiveness
and organizational development, environmental outsourcing and monitoring, risk
analysis and modeling, and business process improvement.
TENERA Technologies, LLC ("Technologies"), a Delaware limited liability
company, was formed by the Company in May 1997, to consolidate its mass
transportation business into a separate legal entity. The Technologies
subsidiary provides computerized maintenance management software and
consulting to the mass transit industry.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation. The accompanying consolidated financial statements
include the accounts of the Company and its subsidiaries and have been
prepared by the Company without audit. All intercompany accounts and
transactions have been eliminated. In the opinion of management, all
adjustments (which include normal recurring adjustments) necessary to present
fairly the financial position at June 30, 1997, and the results of operations
and cash flows at June 30, 1997 and 1996, have been made. For further
information, refer to the financial statements and notes thereto contained in
TENERA, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1996, filed with the Securities and Exchange Commission.
Cash and Cash Equivalents. Cash and cash equivalents consist of demand
deposits, certificates of deposit, bank acceptances or repurchase agreements
of major banks having strong credit ratings, and commercial paper issued by
companies with strong credit ratings. The Company includes in cash and cash
equivalents, all short-term, highly liquid investments which mature within
three months of acquisition.
Property and Equipment. Property and equipment are stated at cost
($2,902,000 and $2,723,000 at June 30, 1997 and December 31, 1996,
respectively), net of accumulated depreciation ($2,536,000 and $2,400,000 at
June 30, 1997 and December 31, 1996, respectively). Depreciation is calculated
using the straight line method over the estimated useful lives, which range
from three to five years.
Revenue. Revenue from time-and-material and cost plus fixed-fee contracts
is recognized when costs are incurred; from fixed-price contracts, on the
basis of percentage of work completed (measured by costs incurred relative to
total estimated project costs); from software license fees, at time of
customer acceptance; and from software maintenance agreements, ratably over
the period of the maintenance support agreement (usually
5
<PAGE>
12 months). The Company's revenue recognition policy for its software
contracts is in compliance with the American Institute of Certified Public
Accountants' Statement of Position 91-1, "Software Revenue Recognition." The
Company primarily offers its services and software products to the electric
power industry, the DOE, and the municipal transit industry in North America.
The Company performs ongoing credit evaluations of these customers and
normally does not require collateral. Reserves are maintained for potential
sales adjustments and credit losses; such losses to date have been within
management's expectations. Actual revenue and cost of contracts in progress
may differ from management estimates and such differences could be material to
the financial statements.
Income Taxes. Due to the net loss for the three- and six-months periods
ended June 30 ,1997, no provision for income taxes was made in 1997. The
reported tax benefit in 1997 reflects the amount of 1995 income taxes to be
refunded related to the carry back of certain net operating losses. For the
same periods in 1996, the provision for income taxes reflects a 40% effective
tax rate.
Per Share Information. Per share data for the three- and six-month periods
ended June 30, 1997 and 1996, are computed on the basis of: weighted average
number of shares of common stock and common stock equivalents using the
treasury stock method.
Recent Accounting Pronouncements. In February 1997, the Financial
Accounting Standards Board issued Statement No. 128, "Earnings Per Share"
("FAS 128"), which is required to be adopted on December 31, 1997. At that
time, the Company will be required to change the method currently used to
compute earnings (loss) per share and to restate such amounts previously
reported. Under the new requirements for calculating primary (basic) earnings
(loss) per share, the dilutive effect of stock options and warrants and
convertible preferred stock will be excluded. Fully diluted earnings per share
will include the dilutive effect of common stock equivalents. The Company has
not determined what the impact of FAS 128 will be on the calculation of
primary and fully diluted net loss per share.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
TENERA, INC.
RESULTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
_______________________________________________________________________________________________________________
Percent of Revenue Percent of Revenue
---------------------- ----------------------
Quarter Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
Percent Percent
Increase Increase
(Decrease) (Decrease)
from from
Prior Prior
1997 1996 Year 1997 1996 Year
_______________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Revenue .............................. 100.0% 100.0% (22.3)% 100.0% 100.0% (24.1)%
Direct Costs ......................... 62.8 60.9 (19.9) 61.1 64.5 (28.2)
General and Administrative Expenses .. 51.0 41.4 (4.4) 43.3 32.7 (5.2)
Software Development Costs ........... 8.8 2.7 158.4 6.5 2.0 155.1
Other Income ......................... 0.4 0.3 17.6 0.2 0.2 --
Special Item ......................... -- 4.1 (100.0) -- 1.9 (100.0)
---------- ---------- ---------- ---------- ---------- ----------
Operating (Loss) Income .............. (22.2) (0.6) n/m (10.7) 0.9 n/m
Interest Income, Net.................. 0.7 0.7 (20.9) 0.7 0.5 (2.7)
---------- ---------- ---------- ---------- ---------- ----------
Net (Loss) Earnings Before
Income Tax (Benefit) Expense ......... (21.5)% 0.1% n/m (10.0)% 1.4% n/m
========== ========== ========== ========== ========== ==========
_______________________________________________________________________________________________________________
n/m: Not meaningful.
</TABLE>
RESULTS OF OPERATIONS
Although partially offset by lower direct costs and administrative
expenses, the Company's lower revenue, and increased spending on software
product and business development efforts resulted in the overall loss for the
quarter and six months ended June 30, 1997. This quarterly loss before income
taxes of $1,007,000, compared to a net loss of $245,000 before income taxes
and special item for the quarter in 1996. Similarly, the Company reported a
first half loss before income taxes of $1,002,000, compared to a net loss of
$59,000 before income taxes and special item in 1996.
During the second quarter, the Company received written contracts and
orders having an estimated value of approximately $4.6 million. The activity
primarily reflects the next three months' funding at the DOE's Rocky Flats
Environmental Technology Site and extensions of consulting contracts with two
large electric utility clients. Contracted backlog for current, active
projects totaled approximately $6.5 million as of June 30, 1997, down slightly
from $6.6 million as of March 31, 1997 and $6.7 million at December 31, 1996.
The revenue decrease in the second quarter and first half of 1997, compared
to a year ago, is primarily the result of reduced government sales and a
reduction in the Rocky Flats Contract activity (due primarily to decreased
funding at various DOE sites) and reduced sales of consulting and management
services, partially offset by higher software revenue related to work on the
Company's contract with the National Railroad Passenger Corporation
("Amtrak") which began in September 1996. For the second quarter and first
six months
7
<PAGE>
of 1997, the concentration of revenue from the government sector decreased to
51% and 52% of total revenue, respectively, from 67% and 65% for the same
periods in 1996.
Direct costs were lower in the second quarter and first half of 1997,
compared to a year ago, primarily as a result of the reduced revenue
generation opportunities. Gross margins decreased to 37% in the second quarter
of 1997, from 39% for the same period in 1996, primarily due to an increase in
lower margin subcontracted labor used on fixed-price projects. For the six-
month period in 1997, gross margins increased to 39% from 36% for the same
period in 1996, due to the reduction in the proportion of lower margin
government work, partially offset by the effect of an increased mix of higher
cost subcontracted labor on fixed-price contracts.
General and administrative costs were lower in the second quarter and first
half of 1997, compared to a year ago, primarily due to lower administrative
costs throughout the Company, partially offset by increased sales staff and
marketing expenditures in the Technologies subsidiary. These business
development expenditures amounted to $274,000 and $385,000 in the second
quarter and first half of 1997, respectively, compared to $29,000 for each of
the same periods a year ago. The increased level of business development
activities, begun in the latter half of 1996, was primarily responsible for
the increase in general and administrative expenses as a percentage of revenue
to 51% in 1997, from 41% in 1996.
The level of the Company's internally-funded investments in software
product development increased to $416,000 and $653,000 in the second quarter
and first half of 1997, respectively, compared to $161,000 and $256,000 for
the same periods a year ago. The accelerated development efforts in 1997,
resulted in completion of a beta version of the Technologies subsidiary's new
client-server product.
The Technologies subsidiary is not expected to produce profitable results
in the next twelve months due to the high level of investment needs that
management believes it will experience during this growth stage of product and
business development activities.
Other income for the second quarter and first six months of 1997 and 1996,
were essentially the same. Other income in 1997 reflects gains on the sale of
assets related to facility downsizing. For the equivalent period in 1996,
other income primarily relates to the liquidation of the Company's interest in
the Individual Plant Evaluation Partnership, a technical services partnership
in which it was an operating participant.
The special item of $250,000 in the second quarter of 1996, reflects an
adjustment of the reserve related to the settlement of specific disputed costs
on certain U.S. Government contracts with the DOE. This positive earnings
impact resulted from a further reduction of the reserve for sales adjustment
established in 1991, and is based upon the successful government audits and
contract closeouts of prior periods.
Net interest income in 1997 and 1996 represents earnings from the
investment of cash balances in short-term, high-quality, government and
corporate debt instruments, partially offset by capital lease interest
expense. The lower net interest income in 1997, as compared to a year ago,
primarily reflects a smaller average cash balance in the second quarter of
1997. The Company had no borrowings under its line of credit during the first
half of 1997 and 1996.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $1,252,000 during the first half of
1997. The decrease was mainly due to cash used by operations ($1,093,000) and
cash used in net acquisition of equipment ($158,000).
Receivables decreased by $387,000 from December 31, 1996, primarily due to
a decrease in the rate of revenue generation during the first half of 1997.
The allowance for sales adjustments decreased by $155,000 from December 31,
1996 due to the write-off of uncollectable receivables.
Accounts payable remained essentially unchanged since the end of 1996.
Accrued compensation and related expenses decreased by $427,000 during the
period, primarily reflecting the payment of the Company's 1996 contribution to
the employee retirement plan and the elimination of the Company's contribution
accrual effective January 1, 1997.
8
<PAGE>
Equity decreased by $864,000 in the first half ended June 30, 1997, due to
net losses ($863,000) and the repurchase of stock ($1,000).
No cash dividend was declared in the first half of 1997.
The impact of inflation on revenue and projects of the Company was minimal.
At June 30, 1997, the Company had available $4,500,000 of a $5,000,000
revolving loan facility with its lender which expires in May 1998. The Company
has no outstanding borrowing against the line, however, $500,000 was assigned
to support standby letters of credit. At June 30, 1997, the Company obtained a
waiver from the lender with respect to certain financial covenants in the loan
agreement concerning tangible net worth and profitability.
Management believes that cash expected to be generated by the Government
and Energy subsidiaries' operations, the Company's working capital, and its
loan facility are adequate to meet it anticipated liquidity needs for these
operations through the next twelve months. The Technologies subsidiary is not
expected to generate cash from its operations in the next twelve months due to
its product and business development investment needs. Management is seeking
additional investment capital for Technologies to offset these deficit cash
expectations.
Statements contained in this report which are not historical facts are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ materially
from those projected. Such risks and uncertainties include the uncertainty of
future profitability; uncertainty regarding industry trends and customer
demand; uncertainty of access to additional capital on terms favorable to the
Company, or at all; uncertainty regarding competition; and reliance on major
customers. Additional risks are detailed in the Company's filings with the
Securities and Exchange Commission, including its Form 10-K for the year ended
December 31, 1996.
9
<PAGE>
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On October 13, 1995, the League for Coastal Protection ("League") filed
an action on behalf of the League and the general public against the Company,
among others, in the Superior Court of California for the County of San
Francisco. The action entitled League for Coastal Protection v. Pacific Gas &
Electric Company ("PG&E"), et al., Case no. 973182, sought injunctive relief
and disgorgement of unspecified profits under the California Business and
Professions Code, Section 17200, et seq. The plaintiff contended that certain
studies performed by the Company and its predecessors respecting the
requirements of 316(b) of the Clean Water Act, that ultimately were submitted
by PG&E to the Regional Water Quality Control Board ("RWQCB") in 1988 in
connection with Diablo Canyon Nuclear Power facility at Diablo Canyon,
California, were deficient in various respects, and the Company and PG&E
covered up those deficiencies from the RWQCB and other state agencies. On
October 13, 1995, the League filed an action against the Company among others,
in the United States District Court for the Northern District of California,
entitled League for Coastal Protection v. Pacific Gas & Electric Company, et
al., Case No. C96-1393DLJ, that sought injunctive and other relief under the
United States Clean Water Act related to the same studies and reporting
described above. On February 5, 1996, John W. Carter filed an action against
the Company and others in the United States District Court for the Northern
District of California entitled United States of America, ex rel. and State of
Californian, ex rel., John W. Carter v. Pacific Gas & Electric Company, et
al., Case No. C95-2843-MHP, under the False Claims Act. This action, was based
on the same studies and reports described above, and sought unspecified
damages and penalties. These actions were successfully settled in June 1997 by
stipulation of the parties. As a result of the settlement, all of the actions
have been dismissed with prejudice. The Company was not required to make any
payment or other contribution to the settlement.
On November 4, 1994, PLM Financial Services, Inc. ("PLM"), filed an
action against TENERA, L.P., the Company's predecessor (the "Predecessor
Partnership"), among others, in the Superior Court of California for the
Count of Alameda. The action entitled PLM Financial Services, Inc. v. TERA
Corporation, et al., Case No. 743 439-0, seeks damages in excess of $4.6
million in unpaid equipment rent and other unspecified damages allegedly owing
to PLM under an equipment lease dated September 29, 1984 between PLM and TERA
Power Corporation ("TERA Power), a former subsidiary of TERA Corporation, the
predecessor of the Predecessor Partnership (the "Predecessor Corporation").
PLM has named the Predecessor Partnership in the action pursuant to a Guaranty
dated September 24, 1984 of the lease obligations of TERA Power made by the
Predecessor Corporation. Upon the liquidation of the Predecessor Corporation
in late 1986, the stock of TERA Power was transferred to the TERA Corporation
Liquidating Trust (the "Trust") and was thereafter sold to Delta Energy
Projects Phases III, IV, and VI pursuant to a stock purchase agreement dated
May 31, 1991. Management understands that TERA Power has asserted various
defenses to the claims asserted by PLM in the action. Moreover, management
believes that, even if there is liability under the lease, the Guaranty has
been exonerated and the Company will be able to defend this action
successfully. Management does not believe that eventual resolution of this
matter will have a material effect on the Company's financial position;
however, an adverse outcome could have a material adverse impact on the
financial position, results of operations, and cash flows of the Company. The
trial in this matter commenced on August 1, 1997.
10
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On June 30, 1997, the Company held its Annual Meeting of Stockholders. The
following individuals were elected to the Board of Directors:
<TABLE>
<CAPTION>
_____________________________________________________________________________________
Votes Votes
For Withheld
_____________________________________________________________________________________
<S> <C> <C>
Robert C. McKay ......................................... 8,672,397 132,814
Thomas S. Loo ........................................... 8,677,297 127,914
Barry L. Williams ....................................... 8,684,397 120,814
_____________________________________________________________________________________
See accompanying notes.
</TABLE>
The following proposals were approved at the Company's Annual Meeting:
<TABLE>
<CAPTION>
_____________________________________________________________________________________
Votes Votes Broker
For Against Abstained Non-Votes
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
1. Proposal to ratify the selection
of the Company's independent
auditors ........................... 8,726,385 38,298 40,528 0
_____________________________________________________________________________________
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
11.0 Statement regarding computation of per share earnings:
See Notes to Consolidated Financial Statements.
27.0* Financial Data Schedule
(b) REPORTS ON FORM 8-K
None.
- --------------------
* Filed herewith.
11
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENT 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.
TENERA, INC.
Dated: August 12, 1997 By: /s/ JEFFREY R. HAZARIAN
------------------------------
Jeffrey R. Hazarian
Chief Financial Officer,
Corporate Secretary, and
Vice President, Finance
12
<PAGE>
EXHIBIT INDEX
Ex. 27.0 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Jun-30-1997
<CASH> 2,712
<SECURITIES> 0
<RECEIVABLES> 4,358
<ALLOWANCES> 1,471
<INVENTORY> 0
<CURRENT-ASSETS> 6,276
<PP&E> 366
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,642
<CURRENT-LIABILITIES> 2,628
<BONDS> 0
<COMMON> 5,802
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,642
<SALES> 0
<TOTAL-REVENUES> 10,092
<CGS> 0
<TOTAL-COSTS> 6,164
<OTHER-EXPENSES> 5,003
<LOSS-PROVISION> 0
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