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Previous: SERVICEMASTER LTD PARTNERSHIP, 424B1, 1997-08-15 |
Next: CALIFORNIA DAILY TAX FREE INCOME FUND INC, NSAR-A, 1997-08-15 |
10
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period
ended June 30, 1997, or
[ ] Transition report under Section 13 or 15(d) of
the Securities Exchange Act of 1934 for the transition
period from to
Commission file No. 0-15369
TUNEX INTERNATIONAL, INC.
(Name of Small Business Issuer as specified in its charter)
Utah 87-0416684
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification NO.)
556 East 2100 South, Salt Lake City, Utah 84106
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number: (801) 486-8133
Check whether the issuer (1) filed all reports required
to be filed by sections 13 or 15(3) of the Exchange Act
during the past 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 [ ]
Check whether the issuer filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of
the Exchange Act after the distribution of securities under
a plan confirmed by a court. Yes [X] No [ ]
As of June 30, 1996, the Issuer had outstanding
1,248,415 shares of common stock.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Tunex International, Inc. ("Issuer" or "Company"),
files herewith an unaudited balance sheet of the Issuer as
of June 30, 1997, and the related statements of operations
and changes in cash flow for the three month period ended
June 30, 1997. In the opinion of management of the Company,
the financial statements fairly present the financial
condition of the Company. Management is not aware of any
adjustments that are necessary to a fair presentation of the
results for the interim periods disclosed.
<PAGE>
TUNEX INTERNATIONAL, INC
BALANCE SHEETS
March 31, June 30,
1997 1997
Unaudited
CURRENT ASSETS:
Cash $ 61,262 $ 103,501
Receivables - current portion 133,588 109,287
Parts inventories 62,863 68,356
Prepaid expenses 10,230 9,281
Deferred income tax benefit 18,900 18,900
Total Current Assets 286,843 309,326
PROPERTY, PLANT AND EQUIPMENT:
Net of accumulated depreciation 214,757 217,369
OTHER ASSETS
Notes Receivable, less current 117,991 117,991
Idle Equipment 9,210 9,210
Trademarks 1,229 1,026
Deposits 6,386 6,386
Deferred income tax benefits 151,200 151,200
Total Other Assets 286,818 85,8213
TOTAL ASSETS $787,616 $812,508
<PAGE>
TUNEX INTERNATIONAL, INC.
BALANCE SHEETS
March 31, June 30,
1997 1997
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $21,730 $25,815
Accrued liabilities 59,791 64,015
Income taxes payable ----- 4,900
Obligations under capital
leases-current portion 18,153 17,275
Pre-petition liabilities - 52,196 52,196
current portion
Total Current Liabilities 151,878 164,201
LONG TERM DEBT:
Obligations under capital leases - net
of current portion 22,964 22,144
Pre-petition liabilities, net of
current portion 114,587 94,758
TOTAL LIABILITIES 289,429 281,104
STOCKHOLDERS' EQUITY:
Common Stock, par value $.001,
50,000,000 shares authorized,
1,248,415 shares issued & outstanding 1,248 1,248
Preferred Stock, Class A, par value $.50,
600,000 shares authorized, issued & 300,000 300,000
outstanding
Preferred Stock, Class B, par value
$1.00, 700,000 shares authorized,
497,262 shares issued & outstanding 497,262 497,262
Additional paid-in capital 3,748,641 3,748,641
Accumulated Deficit (4,048,964) (4,015,747)
Total Stockholders Equity 498,187 531,404
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 787,616 $ 812,508
<PAGE>
TUNEX INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the Quarter Ended June 30,
1997 1996
SALES AND OTHER REVENUE:
Service and parts sales $ 264,175 $ 556,371
Franchise Royalties 62,883 48,359
Franchise Sale (Net of Costs) 17,000 19,000
Other Revenue 8,884 43,659
Total Revenues 352,942 667,389
COSTS AND EXPENSES:
Cost of service and parts 168,045 359,015
General and Administrative 139,794 217,605
Depreciation 5,267 10,896
Interest expense 4,073 9,226
Total Costs and Expenses 317,179 596,742
INCOME BEFORE INCOME TAXES $ 35,763 $ 70,647
Current Income Tax Expense 1,750 3,600
Deferred Income Tax Expense 8,800 22,000
NET INCOME $ 25,213 $ 45,047
NET INCOME PER COMMON SHARE
OR COMMON SHARE EQUIVALENT $ .012 $ .02
<PAGE>
TUNEX INTERNATIONAL, INC.
STATEMENT OF CHANGES IN CASH FLOW
(Unaudited)
For the Three Months Ended June 30,
1997 1996
CASH FLOW FROM OPERATIONS:
Income $ 25,213 $ 45,047
Items not requiring cash: 5,267 10,896
Depreciation 30,480 55,943
Decrease (increase) in receivables 24,301 (24,821)
Decrease (increase) in inventories (5,493) (23,592)
(Decrease) increase in accounts payable 13,209 38,697
Decrease (increase) in prepaid expenses,
PP&E, capital expenditure in cash (7,531) (9,003)
Decrease in deferred tax benefits 8,800 22,000
Net cash provided (used) in operation $ 63,766 $ 59,224
CASH FLOW FROM FINANCING ACTIVITIES:
Principal payments on pre-petition debt (19,829) (20,263)
Principal payments on capital lease
obligations (1,698) (10,413)
(Decrease) increase in Long-term notes ------- (41,565)
Net cash provided (used) from financing (21,527) (72,241)
Net cash provided during three months 42,239 (13,017)
Cash on hand - beginning 61,262 206,280
Cash on hand - ending $ 103,501 $ 193,173
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF
OPERATION
Material changes in financial condition.
At June 30, 1997, the company's financial condition continued to
improve, primarily as the result of a decrease in receivables,
causing the working capital to increase from $134,065 on March
31, 1997 to $145,125 on June 30, 1997.
Further reduction of long-term debt, and in particular pre-
petition liabilities, has increased stockholders' equity from
$498,187 on March 31, 1997 to $531,404 on June 30, 1997.
Management believes that the working capital of the Company is
adequate for its current and on going operations and its
continuing development of new service centers for conversion to
franchised centers on a gradual basis.
Results of operations.
During the three months ended June 30, 1997, the Company's total
revenue decreased from $667,389 in 1996 to $352,942 in 1997.
This decrease is the direct result of the sale and the conversion
to franchises of three company owned centers during the year
ended March 31, 1997. The same explains the increase in
franchise royalties from $48,359 in 1996 to $62,883 in 1997. The
decrease in other revenue from $43,659 in 1996 to $8,884 in 1997
is attributable to the sale of one company owned center in that
period of 1996 and represents mostly the sale of goodwill from
that center.
For the three month period ended June 30, 1997 the company shows
an income from operations, before income tax of $35,763 compared
to income of $$70,647 for the same period in 1996. This decrease
in income is the direct result of the goodwill realized in the
sale of a company owned center during the 1996 period.
After giving effect to income tax expenses and the change a
result of deferred tax benefits, the net income for the three
months period ended June 30, 1997 is $25,213, as compared to
$45,047 for the same period in 1996. Consequently, the Company
had net income per common share, on a fully diluted basis of
$0.012 for the three month period ended June 30, 1997 as compared
to $0.02 for the same period in 1996.
During the three month period ended June 30, 1997, the company
operated three centers, including a center still in its first
year of operation. During this period the company also had a new
franchised center open in South Ogden, Utah and sold one
additional franchise license for a center now under development.
This increases the total amount of centers in the Tunex system to
twenty-four (24) compared to twenty-two (22) at the same period
in 1996.
In looking ahead, the company continues to identify new locations
for either development by the company for turn-key conversions to
franchises or for development by qualified franchise owners,
depending on circumstances and the availability of cash to the
company.
The company is also actively promoting and offering individual
franchise licenses for development by the franchise licensee,
primarily in states where Tunex franchises are already in
operation and continues to offer master franchises for areas,
cities or states in other parts of the country. Individual
franchise licenses cost $19,000 with 5% royalty fees on gross
sales. The cost of master franchises is dependent on the size of
the areas involved.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS: Attached is the Financial Data Schedule, Exhibit
Reference Number 27
Form 8-K: None
SIGNATURES
In accordance with the requirements of the Exchange Act,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
TUNEX INTERNATIONAL, INC.
Date: August 11, 1997 By Rudolf Zitzmann (Signature)
President (Duly Authorized and
Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 103,501
<SECURITIES> 0
<RECEIVABLES> 227,278
<ALLOWANCES> (5,056)
<INVENTORY> 68,356
<CURRENT-ASSETS> 309,326
<PP&E> 217,369
<DEPRECIATION> 326,566
<TOTAL-ASSETS> 812,508
<CURRENT-LIABILITIES> 164,201
<BONDS> 0
0
797,262
<COMMON> 1,248
<OTHER-SE> 531,404
<TOTAL-LIABILITY-AND-EQUITY> 812,508
<SALES> 264,175
<TOTAL-REVENUES> 352,942
<CGS> 168,045
<TOTAL-COSTS> 139,794
<OTHER-EXPENSES> 9,340
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 35,763
<INCOME-TAX> 1,750
<INCOME-CONTINUING> 34,013
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 8,800
<NET-INCOME> 25,213
<EPS-PRIMARY> .02
<EPS-DILUTED> .012
</TABLE>
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