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, 1997, or
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file No.
0-18899
TANKNOLOGY ENVIRONMENTAL, INC.
(Exact name of registrant as specified in its charter)
TEXAS 76-0284783
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10235 W. LITTLE YORK, SUITE 405
HOUSTON, TEXAS 77040
(Address of principal executive office)
Registrant's telephone number, including area code: (281) 892-7160
5225 HOLLISTER STREET, HOUSTON, TEXAS 77040
(713) 690-8265
(Former address and telephone number of principal executive office)
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period than 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 of Common Stock, par value $0.01 per share,
outstanding as of May 1, 1997 was 14,244,012.
Page 1
Index to Exhibits
appears on page 11
<PAGE>
TANKNOLOGY ENVIRONMENTAL, INC. AND SUBSIDIARIES
INDEX
PAGE(S)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheet as of
March 31, 1997 (unaudited) and December 31, 1996 ........... 3
Condensed Consolidated Statement of Operations for the
Three Months Ended March 31, 1997 and 1996 (unaudited) ..... 4
Condensed Consolidated Statement of Cash Flows for
the Three Months Ended March 31, 1997 and 1996
(unaudited) ................................................ 5
Notes to Consolidated Financial Statements (unaudited) ..... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................ 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings .......................................... 11
Item 4. Submission of Matters to a Vote of Security Holders ........ 11
Item 6. Exhibits and Reports on Form 8-K ........................... 11
PART III. SIGNATURES ....................................................... 12
2
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TANKNOLOGY ENVIRONMENTAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
March 31, December 31,
1997 1996
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents .................... $ 18,798,798 $ 11,421,710
Short-term investments ....................... 10,120,201 18,425,979
Accounts receivable, net ..................... 404,179 420,556
Note receivable .............................. 74,047 91,349
Inventories, net ............................. 86,158 60,317
Deferred tax asset ........................... 398,446 447,202
Other current assets ......................... 625,602 735,716
------------ ------------
Total current assets ...................... 30,507,431 31,602,829
PROPERTY AND EQUIPMENT, NET .................... 4,685,207 5,547,864
INTANGIBLE ASSETS, LESS ACCUMULATED
AMORTIZATION ................................. 2,443,274 2,494,873
DEFERRED TAX ASSET ............................. 1,566,365 1,450,248
NET ASSETS OF DISCONTINUED OPERATIONS
AND OTHER ASSETS ............................. 2,765,588 1,938,080
------------ ------------
Total assets ................................. $ 41,967,865 $ 43,033,894
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ............................. $ 296,692 $ 333,676
Accrued liabilities .......................... 1,368,563 2,267,245
------------ ------------
Total current liabilities ................. 1,665,255 2,600,921
COMMITMENTS AND CONTINGENCIES (See Note 5)
SHAREHOLDERS' EQUITY:
Preferred stock, $.10 par value;
10,000,000 shares authorized; no
shares issued and outstanding ............. -- --
Common stock, $.01 par value;
100,000,000 shares authorized;
15,199,237 and 15,192,237 shares
issued at March 31, 1997 and
December 31, 1996, respectively ........... 151,992 151,922
Additional paid-in capital ................... 33,123,377 33,109,657
Retained earnings ............................ 11,214,912 11,359,065
Treasury stock at cost, 955,225
shares, at March 31, 1997 and
December 31, 1996 ......................... (4,187,671) (4,187,671)
------------ ------------
Total shareholders' equity ................... 40,302,610 40,432,973
------------ ------------
Total liabilities and shareholders' equity ... $ 41,967,865 $ 43,033,894
============ ============
The accompanying notes are an integral part of the condensed consolidated
financial statements.
3
<PAGE>
TANKNOLOGY ENVIRONMENTAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
Three Months Ended
March 31,
-----------------------------
1997 1996*
------------ ------------
REVENUES ...................................... $ 607,625 $ 516,738
COST OF SERVICES .............................. 549,341 317,646
------------ ------------
Gross profit ............................. 58,284 199,092
SELLING, GENERAL & ADMINISTRATIVE EXPENSES .... 658,353 577,409
------------ ------------
Loss from operations ..................... (600,069) (378,317)
OTHER INCOME .................................. 382,171 256,014
------------ ------------
Loss from continuing operations
before income taxes ................. (217,898) (122,303)
INCOME TAX BENEFIT ............................ (73,745) (47,539)
------------ ------------
Loss from continuing operations .......... (144,153) (74,764)
LOSS FROM DISCONTINUED OPERATIONS, NET ........ -- (268,356)
------------ ------------
Net income (loss) ........................ $ (144,153) $ (343,120)
============ ============
Loss per share from continuing operations ..... $ (0.01) $ 0.00
Loss per share from discontinued operations ... 0.00 (0.02)
------------ ------------
NET EARNINGS (LOSS) PER SHARE ................. $ (0.01) $ (0.02)
============ ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING .............................. 14,244,012 14,237,012
============ ============
- ------------
*Reclassified
The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
<PAGE>
TANKNOLOGY ENVIRONMENTAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
Three Months Ended
March 31,
---------------------------
1997 1996
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) .............................. $ (144,153) $ (343,120)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization .............. 176,467 778,803
Net amortization of premiums and
discounts on short-term investments ...... (151,356) (39,500)
Loss (gain) on disposal of assets .......... 5,327 (9,004)
Deferred income taxes ...................... (67,361) (88,557)
Deferred income ............................ -- (5,040)
Common stock issued as compensation
to directors ............................. 13,790 12,740
Change in assets and liabilities:
Decrease in accounts and note
receivable, net ........................ 33,679 1,369,483
(Increase) decrease in inventories, net .. (25,841) 36,699
Increase in income tax receivable ........ -- (144,998)
Decrease in other current assets ......... 110,114 51,706
Increase in net assets of discontinued
operations ............................. (827,507) (533,595)
Decrease in accounts payable and accrued
liabilities ............................ (935,666) (5,884)
------------ ------------
Total adjustments .................... (1,668,354) 1,422,853
------------ ------------
Net cash (used in) provided by
operating activities ............... (1,812,507) 1,079,733
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ........................... (186,767) (637,178)
Proceeds from the sale of assets ............... 919,228 22,000
Purchase of short-term investments ............. (8,658,261) (1,579,287)
Proceeds from maturities of short-
term investments ............................. 17,115,395 3,133,194
Increase in intangible assets .................. -- (3,158)
------------ ------------
Net cash provided by investing
activities ......................... 9,189,595 935,571
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable ............ -- (28,939)
------------ ------------
Net cash used in financing
activities ......................... -- (28,939)
------------ ------------
Net increase in cash and cash
equivalents ........................ 7,377,088 1,986,365
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . 11,421,710 14,967,107
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ....... $ 18,798,798 $ 16,953,472
============ ============
The accompanying notes are an integral part of the condensed consolidated
financial statements.
5
<PAGE>
TANKNOLOGY ENVIRONMENTAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The unaudited condensed consolidated financial statements include the
accounts of Tanknology Environmental, Inc. and its wholly owned subsidiaries
(the "Company"). The unaudited condensed consolidated financial statements have
been prepared consistent with the accounting policies reflected in the audited
consolidated financial statements included in the Company's Form 10-K filed with
the Securities and Exchange Commission on March 31, 1997, and should be read in
conjunction therewith.
In management's opinion, the unaudited condensed consolidated financial
statements include all adjustments necessary for a fair presentation of the
Company's consolidated financial position at March 31, 1997, the consolidated
results of its operations for the three-month periods ended March 31, 1997 and
1996, and its consolidated cash flows for the three-month periods ended March
31, 1997 and 1996. All such adjustments are of a normal recurring nature.
Interim results are not necessarily indicative of results for a full year.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of the Company include the
accounts of Tanknology Environmental, Inc. and its wholly owned subsidiaries.
All material intercompany transactions and balances have been eliminated in
consolidation. Prior year amounts in the condensed consolidated statement of
operations and related notes thereto have been reclassified to reflect the
Company's discontinued operations consisting of Mankoff, Inc. ("Mankoff"),
Engineered Systems, Inc. ("ESI"), Tanknology Corporation International ("TCI"),
Tanknology Canada (1988), Inc., ("TCS"), and USTMAN Industries, Inc. ("USTMAN"),
as discussed in Note 2. All amounts related to the statement of operations are
from continuing operations unless otherwise indicated.
The Company is a holding company whose only current continuing business
is wastewater processing and waste oil recycling in the Central Eastern United
States. The Company's discontinued subsidiary, ESI, develops and manufactures
automated fuel systems and related products principally for large international
oil companies.
SHORT-TERM INVESTMENTS
Short-term investments are those with maturities greater than three
months when purchased.
The Company has classified all short-term investments as
available-for-sale. When purchased, securities are recorded at cost and adjusted
for unrealized holding gains and losses due to market fluctuations. Gains and
losses are recorded upon the sales of short-term investments based upon the
specific identification method. Unrealized gains and losses were not material
for any period presented.
INCOME TAXES
The Company utilizes the liability method for deferred income taxes. The
liability approach requires recognition of deferred tax assets and liabilities
for the expected future tax consequences of events recognized in the Company's
financial statements or tax returns. All expected future events other than
changes in the law or tax rates, are considered in estimating future tax
consequences.
The provision for income taxes includes federal, state, and local income
taxes currently payable and those deferred because of temporary differences
between the financial statements and tax bases of assets and liabilities.
6
<PAGE>
TANKNOLOGY ENVIRONMENTAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
EARNINGS PER COMMON SHARE
Primary earnings per share is based on the weighted average number of
shares outstanding during the period after consideration of the dilutive effect
of stock options or warrants reflected under the treasury stock method. Fully
diluted earnings per share are not presented because such amounts would be the
same as amounts computed for primary earnings per share.
NEW ACCOUNTING STANDARDS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, entitled "EARNINGS PER SHARE" ("SFAS No. 128"), in
1997. The Company is required to adopt the provisions of SFAS No. 128 for its
year ended December 31, 1997. Initial adoption of this standard is not expected
to have a material impact on the Company's financial statements.
2. DISCONTINUED OPERATIONS:
During 1995, the Board of Directors of the Company elected to
discontinue operations at its ESI subsidiary and put the assets of the business
up for sale. ESI's operations were discontinued as of December 31, 1995;
however, as of March 31, 1997, ESI has not been sold or closed. ESI's revenues
were $3,322,000 for the year ended December 31, 1996. During 1995, a provision
for estimated loss on disposition of ESI of $3,715,000, including write-off of
goodwill and estimated losses through the expected date of sale, has been
recorded net of an income tax benefit of $1,914,000. During 1996, an additional
provision for estimated loss on disposition of ESI of $660,000 has been
recorded, net of an income tax benefit of $340,000. The amounts the Company will
ultimately realize could differ materially from the amounts assumed in arriving
at the estimated loss from discontinued operations. The remaining net assets of
ESI principally consist of accounts receivable, contracts in progress,
inventories, and property, plant and equipment offset by accrued liabilities,
including estimated losses through the revised expected date of sale. The
Company will fulfill all contract obligations of ESI and liquidate its assets
unless a buyer of the business assumes performance of its contracts in the near
future. ESI's revenues were $474,000 and $578,000 for the three months ended
March 31, 1997 and 1996, respectively. Operating losses for ESI totaled $717,000
and $838,000 for the quarters ended March 31, 1997 and 1996, respectively. As a
result of the utilization of a portion of the reserve for disposition for these
losses, net assets of discontinued operations increased during the March 31,
1997 quarter.
On October 25, 1996, the Company disposed of certain assets and
liabilities, which consisted of the stock of its wholly owned subsidiaries,
Tanknology Corporation International, including its cathodic protection division
d/b/a Tanknology Cathodic Protection, USTMAN Industries, Inc., and Tanknology
Canada (1988), Inc., collectively known as the "Tank Testing Group" to NDE
Environmental Corporation ("NDE"), a Delaware corporation, an unrelated third
party. The disposition of the Tank Testing Group was made pursuant to a Stock
Purchase Agreement (the "Agreement") between the Company and NDE dated October
7, 1996. The terms of the Agreement were determined by arm's-length negotiation
between the Company and NDE. The Company disposed of the Tank Testing Group in
consideration of the receipt of $12 million in cash. The Agreement calls for
adjustments to the purchase price of up to $1 million for any working capital
deficiencies and of up to $1.25 million for liabilities relating to services
performed by the Tank Testing Group prior to October 25, 1996. Management does
not believe any material working capital deficiencies exist; however, a
liability totaling $1.25 million has been accrued for potential liabilities.
Revenues for the Tank Testing Group were $18,926,000 for the year ended December
31, 1996.
7
<PAGE>
TANKNOLOGY ENVIRONMENTAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
3. DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS:
Additional information regarding certain balance sheet accounts at March
31, 1997 and December 31, 1996 is presented below:
March 31, December 31,
1997 1996
----------- ----------
(unaudited)
Other current assets:
Interest receivable ....................... $ 36,287 $ 31,016
Prepaid insurance ......................... 50,121 127,497
Other ..................................... 539,194 577,203
----------- ----------
Total other current assets ......... $ 625,602 $ 735,716
=========== ==========
Accrued liabilities:
Compensation .............................. $ 106,872 $ 322,771
State, federal, and foreign income taxes .. (54,011) 634,590
Warranty and claims reserves .............. 1,250,000 1,250,000
Other taxes ............................... 60,091 57,460
Other ..................................... 5,611 2,424
----------- ----------
Total accrued liabilities .......... $ 1,368,563 $2,267,245
=========== ==========
4. COMMON STOCK AND STOCK OPTIONS:
On January 1, 1997, the Company issued 7,000 shares of Restricted Stock
with a market value of $13,790 to seven directors of the Company, in accordance
with its 1991 Nonemployee Director Plan.
5. COMMITMENTS AND CONTINGENCIES:
The Company is involved in litigation and routine claims from time to
time. Certain of the Company's litigation and claims are covered by insurance
with a maximum deductible of $50,000. In addition, the Company is contingently
liable for up to $1.25 million for liabilities relating to services performed by
the Tank Testing Group prior to October 25, 1996. The Company has recorded a
liability for the $1.25 million contingency as of December 31, 1996. In
Management's opinion, the litigation and claims in which the Company is
currently involved are not material to the Company's consolidated financial
position, results of operations or liquidity.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
On October 25, 1996, the Company sold the assets and liabilities of its
three subsidiaries involved in underground storage tank services to NDE
Environmental, Inc. ("NDE"). The subsidiaries that were sold, ("the Tank Testing
Group"), consist of Tanknology Corporation International including its cathodic
protection division d/b/a Tanknology Cathodic Protection, USTMAN Industries,
Inc., and Tanknology Canada (1988), Inc. The Company disposed of the Tank
Testing Group in consideration of the receipt of $12,000,000 in cash. The Tank
Testing Group had revenues of $4,837,000 for the three months ended March 31,
1996.
Pursuant to the agreement to sell the Tank Testing Group, at the annual
meeting of shareholders on April 24, 1997, the Company's shareholders elected to
change the name of the Company to TEI, Inc.
After the sale of the Tank Testing Group, the Company's continuing
operations consist of Energy Recovery Resources ("ERRI"), a wastewater and waste
oil treatment company located in Charlotte, North Carolina. The Company also
owns Engineered Systems, Inc. ("ESI"), based in Tempe, Arizona. ESI is a
provider of fuel system products. The Company elected to discontinue ESI in
December 1995 and is in the process of disposing of ESI.
Following the sale of the Tank Testing Group, the Company has
approximately $29 million in cash, cash equivalents, and marketable securities.
At this time, the Company intends to continue operating ERRI and has no
immediate plan for reinvesting these funds into any specific operating entity;
however, management intends to evaluate various strategies. All excess cash is
invested in short-term, interest-bearing, investment-grade securities, with a
minimum criteria of single "A".
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
Revenues from wastewater treatment and waste oil recycling services at
the Company's ERRI division increased by 17.6% from $517,000 during the three
months ended March 31, 1996 to $608,000 during the quarter ended March 31, 1997.
Such revenue improvement is mainly due to a greater volume of wastewater
processed during the first quarter of 1997 versus 1996.
Gross profit declined by $141,000 to $58,000 during the first three
months of 1997 from $199,000 during the prior-year period. When measured as a
percentage of sales, the gross margin declined to 9.6% during the 1997 quarter
from 38.5% during 1996. During the first quarter of 1997, all processing
operations were conducted from the Company's newly constructed treatment
facility in the Charlotte, North Carolina area. The new facility is larger, has
greater processing capabilities, and has higher associated fixed operating costs
such as depreciation and personnel than the old plant in which the Company
operated during the first quarter of 1996. Additionally, during the first
quarter of 1997, processing operations in the new facility were not as efficient
as that of the old facility due to the new equipment and processing techniques
employed and the learning curve involved with its operations. Management
believes that such operating costs will decline as a percentage of sales as
revenues increase.
Selling, general and administrative expenses increased $81,000 to
$658,000 during the first three months of 1997 from $577,000 during the
comparable period in 1996, principally due to depreciation and the addition of
management and supervisory personnel at the new wastewater treatment processing
plant at ERRI.
Other income and expense, consisting mainly of interest earned on the
Company's investments, and gains and losses on the disposition of fixed assets,
grew from $256,000 during the first three months of 1996 to $382,000 during the
comparable current-year period. This is primarily due to an increase in the
amount invested as a result of the Company's sale of the Tank Testing Group
during the fourth quarter of 1996.
During 1996, the Company sold the Tank Testing Group to an independent
third party. The Tank Testing Group recorded a net operating loss of $268,000
during the first quarter of 1996. Such loss is classified as a loss from
discontinued operations during the January to March 1996 period. The Company has
9
<PAGE>
reported no income or loss during the first three months of 1997 or 1996 from
its other discontinued operation, ESI, as estimated losses through the expected
date of sale were previously accrued.
During the three months ended March 31, 1997, the Company recorded a net
loss of $144,000 compared to a loss of $343,000 during the first quarter of
1996.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, the Company had cash, cash equivalents, and
short-term investments of $28,919,000 and had no significant cash commitments of
such funds in excess of requirements to operate the Company's continuing
operations. These funds are being invested pending any decision by the Company's
Board of Directors regarding the Company's future direction. For the three
months ended March 31, 1997, net cash used in operations totaled $1,813,000
versus net cash provided by operations of $1,080,000 during the same period in
1996. Current year cash used in operations is the result of a net loss of
$144,000, non-cash expenses of $23,000, and working capital changes totaling
$1,646,000.
Working capital changes during the January to March 1997 period include
the reduction of accounts payable and accrued liabilities of $936,000, primarily
related to the payment of accrued income taxes and compensation expenses.
Working capital changes also include an increase in the net assets of ESI of
$828,000, principally due to a decrease in the reserve for disposition caused by
ESI's operating losses during the quarter.
Capital expenditures for the first quarter of 1997 were $187,000, mainly
for the purchase of machinery and processing equipment at ERRI. During the first
three months of 1997, the Company sold its former headquarters building and
related fixed assets in Houston receiving cash of approximately $919,000.
SEASONALITY
The Company experiences no noticeable seasonal variations in its
continuing business.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company is evaluating strategic and financial alternatives for
maximizing shareholder value. This may include, but is not limited to, an
acquisition or merger with another company that may or may not be in a business
complementary to that of the Company, a "going private" transaction in which
current directors and/or management would acquire the outstanding publicly-held
shares of the Company, or some combination of the above alternatives. The
Company has not necessarily determined to pursue any of the above alternatives
at this time, nor are the Company's alternatives limited to the above items.
FORWARD-LOOKING STATEMENT
The statements contained in this Form 10-Q for the quarter ended March
31, 1997 that are not historical facts, including, but not limited to,
statements found in this Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations, are forward-looking statements
and involve a number of risks and uncertainties. The actual results of the
future events described in such forward-looking statements in the Form 10-Q
could differ materially from those stated in such forward-looking statements.
Among the factors that could cause actual results to differ materially are:
general economic conditions, competition, government regulation, and possible
future litigation, as well as the risks and uncertainties discussed in this Form
10-Q, including without limitation, the portions referenced above, and the
uncertainties set forth from time to time in the Company's other public reports
and filings and public statements.
ACCOUNTING STANDARDS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, entitled "EARNINGS PER SHARE" ("SFAS No. 128"), in
1997. The Company is required to adopt the provisions of SFAS No. 128 for its
year ended December 31, 1997. Initial adoption of this standard is not expected
to have a material impact on the Company's financial statements.
10
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in litigation and routine claims from time to
time. Certain of the Company's litigation and claims are covered by insurance
with a maximum deductible of $50,000. In addition, the Company is contingently
liable for up to $1.25 million for liabilities relating to services performed by
the Tank Testing Group prior to October 25, 1996. The Company has recorded a
liability for the $1.25 million contingency as of December 31, 1996. In
Management's opinion, the total estimated litigation liability and related
insurance claims are not material to the Company's consolidated financial
position, results of operations, or liquidity.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its annual meeting of shareholders on April 24, 1997.
At such meeting, the shareholders elected directors of the Company and voted to
amend the Articles of Incorporation to change the name of the Company to "TEI,
Inc." No other matters were voted on at the meeting.
The tabulation for the director nominees is as follows:
Nominee For Against Abstained Non votes
------------------ ----------- ---------- ----------- -----------
Donald R. Campbell 12,137,982 0 138,351 0
T. Craig Benson 12,124,652 0 151,681 0
The tabulation for the name change is as follows:
For Against Abstained Non votes
----------- -------------- ---------- ----------- -----------
TEI, Inc. 12,165,244 91,374 19,715 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 11.1A Computation of Earnings Per Common Share for the
Three Months Ended March 31, 1997 and 1996.
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the three-month
period ended March 31, 1997.
11
<PAGE>
PART III.
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.
TANKNOLOGY ENVIRONMENTAL, INC.
By /s/ RICK BERRY
Rick Berry
Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
Date May 9, 1997
By /s/ DONALD R. CAMPBELL
Donald R. Campbell
President,
Chief Executive Officer and
Chief Operating Officer
Date May 9, 1997
12
Exhibit 11.1A
TANKNOLOGY ENVIRONMENTAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE
for the Three Months Ended March 31, 1997 and 1996
(unaudited)
1997 1996
------------ ------------
Computation of earnings per common share
for the three months ended March 31:
Net income (loss) applicable to common stock . $ (144,153) $ (343,119)
============ ============
Weighted average number of common shares
outstanding .............................. 14,244,012 14,237,012
Common shares issuable under employee
stock option plan ........................ -- --
Less shares assumed repurchased with proceeds -- --
------------ ------------
Weighted average common shares outstanding 14,244,012 14,237,012
============ ============
Net earnings (loss) per common share . $ (0.01) $ (0.02)
============ ============
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 18,798,798
<SECURITIES> 10,120,201
<RECEIVABLES> 529,253
<ALLOWANCES> 51,027
<INVENTORY> 86,158
<CURRENT-ASSETS> 30,507,431
<PP&E> 5,178,265
<DEPRECIATION> 493,058
<TOTAL-ASSETS> 41,967,865
<CURRENT-LIABILITIES> 1,665,255
<BONDS> 0
0
0
<COMMON> 151,992
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 41,967,865
<SALES> 0
<TOTAL-REVENUES> 607,625
<CGS> 549,341
<TOTAL-COSTS> 1,207,694
<OTHER-EXPENSES> (23,254)
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