U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
____ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from __________ to
___________
Commission File Number 1-4142
TENNEY ENGINEERING, INC.
(Exact name of small business issuer as
specified in its charter)
NEW JERSEY 22-1323920
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
1090 Springfield Road, Union, New Jersey 07083
(Address of principal executive offices)
(908) 686-7870
(Issuers telephone number)
NONE
(Former name, former address and former fiscal year, if
changed since last report.)
Check whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) 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
State the number of shares outstanding of each of
the issuers classes of common equity, as of the latest
practicable date:
Class Outstanding at March 31, 1997
Common Stock $.01 par value 3,705,592
Transitional Small Business Disclosure Format:
Yes ____ No X <PAGE>
TENNEY ENGINEERING, INC.
FORM 10-QSB
QUARTER ENDED MARCH 31, 1997
I N D E X
PAGE
Part I - Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheet -
March 31, 1997 3
Consolidated Condensed Statements
of Operations - Three months ended
March 31, 1997 and 1996 4
Consolidated Condensed Statements of
Cash Flows -
Three months ended March 31, 1997
and 1996 5
Notes to Consolidated Condensed Financial
Statements 6
Item 2. Managements Discussion and Analysis
Managements Discussion and Analysis
of Financial Condition and Results
of Operations 17
Part II - Other Information 19
<PAGE>
TENNEY ENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
MARCH 31, 1997
(In thousands of dollars - unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 50
Accounts receivable - net 1,676
Current portion of installment
note receivables 55
Inventories 662
Prepaid expenses and other current assets 13
Deferred tax asset $ 283
Total Current Assets 2,739
Plant and equipment, net 349
Installment note receivable,
noncurrent portion 258
Other assets $ 215
Total Assets $ 3,561
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Notes payable bank $ 375
Accounts payable and other
accrued liabilities 957
Current portion of long-term
capital leases 43
Accrued payroll and payroll taxes 197
Billings in excess of estimated
revenue on long-term contracts 59
Pension obligation, current portion $ 73
Total Current Liabilities 1,704
Long-term debt, net of current portion 482
Total Liabilities 2,186
Commitments and contingencies
Stockholders Equity:
Preferred stock $.01 par value:
Authorized 10,000,000 shares
Issued and outstanding - none
Common stock $.01 par value:
Authorized 50,000,000 shares
Issued 3,714,980 shares 37
Additional paid-in-capital 2,297
Retained earnings (deficit) (922)
1,412
Less treasury stock, 9,388 shares at cost 37
Total Stockholders Equity 1,375
Total Liabilities and
Stockholders Equity $ 3,561
See Notes to Consolidated Financial Statements.<PAGE>
TENNEY ENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(In thousands of dollars - unaudited)
1997 1996
Net Revenue:
Product and product related $ 1,983 $ 2,030
Service 213 198
Parts 125 184
License Fees 0 111
Totals 2,321 2,523
Cost of Sales:
Product and product related 1,535 1,668
Service 150 119
Parts 68 77
Totals 1,753 1,864
Gross Profit 568 659
Selling and administrative expenses 526 519
Income from operations 42 140
Other expense (income):
Interest expense 4 4
Other income, net (8) (1)
Totals (4) 3
Income before income taxes 46 137
Income taxes (benefit) (3) (13)
Net Income $ 49 $ 150
Net Income per common share $ 0.01 $0.04
Exercise of options would not be dilutative.<PAGE>
TENNEY ENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
QUARTER ENDED MARCH 31, 1997 AND 1996
(In thousands of dollars - unaudited)
1997 1996
Operating activities:
Net income $ 49 $ 150
Adjustments to reconcile income
to net cash provided by
(used in) operations:
Depreciation and amortization 16 19
Deferred tax asset (3) (67)
Changes in operating assets and
liabilities:
Accounts and installments
receivables (34) (277)
Inventories (197) (94)
Prepaid expenses and other
current assets 42 (13)
Other assets 3 (2)
Accounts payable and other
accrued liabilities (503) 160
Accrued payroll and payroll
taxes (40) 105
Billings in excess of
estimated revenues (227) 41
Net cash provided by (used in)
operating activities (894) 22
Investing activities:
Acquisition of equipment (64) (8)
Cash used in investing
activities (64) (8)
Financing activities:
Exercise of options and
issuance of common stock 2 0
Proceeds from working capital
line of credit 375 0
Payments of note payable and
long-term capital leases (30) (14)
Net cash provided by (used in)
financing activities 347 (14)
Net increase (decrease) in cash
and cash equivalents (611) 0
Cash and cash equivalents,
beginning of year 661 223
Cash and cash equivalents,
end of period $ 50 $ 223
Supplemental disclosure of cash flow
information:
Interest paid $ 4 $ 4
Income taxes paid $ 0 $ 14
<PAGE>
Note 1:
Summary of Accounting Policies:
The financial information enclosed herewith as at March
31, 1997 and for the three months ended March 31, 1996 is
unaudited, and, in the opinion of the Company, reflects
all adjustments (which included only normal recurring
accruals) necessary for a fair presentation of the
financial position as of March 31, 1997, the changes in
cash flow for the three months ended March 31, 1997 and
1996 and the results of operation for these periods.
This quarterly report should be read in conjunction with
the Companys 1996 Annual Report and the March 31, 1997
Managements Discussion and Analysis of Financial
Condition and Results of Operations.
Note 2:
Results of Operations:
The results of operations for the three months ended
March 31, 1997 are not necessarily indicative of the
results to be expected for the full year.
Note 3:
Financial Condition and Results of Operation:
As shown in the accompanying consolidated financial
statements, the Company has earned net income for the
quarters March 31, 1997 and 1996, respectively, from
operations, which has resulted in an improvement in the
Company's financial position.
Note 4:
License agreement:
During 1992 the Company entered into a six-year licensing
agreement with a manufacturer (the Licensee) of
environmental conditioning equipment. The terms of the
agreement, among others, provide for: the Licensee to
manufacture and sell environmental test chambers and
other equipment under the Tenney name with the Company
also retaining the right to manufacture such products;
the Company to receive license fees (up to a maximum of
$1,900,000) equal to 5% of qualifying sales during the
term of the agreement with specified minimum amounts
payable annually; an option for the Licensee to purchase
the Company's rights, title and interest in the Tenney
trademark for $100,000 at the end of the license term in
the event the Company is no longer manufacturing such
products; the Company to perform all servicing and
installation of the aforementioned equipment.
In addition, the Company entered into a four-year
consulting agreement which expired in December, 1996,
with the Licensee whereby, for an annual fee of $120,000,
the Company will make the services of the Companys
president available to the licensee for a specified
period of time.
During November, 1996, the Company and Licensee agreed to
accelerate payment of license fees by having the Licensee
prepay $532,000, representing the amount remaining of the
$1,900,000 maximum license fee. In addition, the Tenney
trademark was sold for the sum of $100,000.
Note 5:
Accounts receivable:
Accounts receivable consist of the following:
March 31,
1997
(In thousands
of dollars)
Accounts receivable, billed $ 1,704
Allowance for doubtful accounts (28)
Totals $ 1,676
At March 31, 1997, sales recognized on the percentage of
completion method approximated $1,938,000.
Note 6:
Inventories:
Inventories consist of the following:
March 31,
1997
(In thousands
of dollars)
Raw materials $ 761
Work in process 161
Totals 922
Less:
Provision for write-downs to
estimated realizable value 260
Totals $ 662
Accumulated costs on long-term contracts recognized by
the percentage of completion method (see Note 5) were
approximately $1,549,000.
Note 7:
Property, Plant and Equipment:
Plant and equipment, which is stated at cost, is
summarized as follows at March 31, 1997:
March 31,
1997
(In thousands
of dollars)
Equipment $ 1,395
Equipment under capital leases 352
1,747
Accumulated depreciation (1,398)
Total equipment - net $ 349
The Company leases certain equipment for use in its
operations under capital leases. Plant and equipment at
March 31, 1997, included capital leases of $352,000 and
related accumulated depreciation of $177,000.
DynaTenn, Inc. (d/b/a DynaVac), a wholly owned
subsidiary which manufactures diversified industrial
vacuum equipment, leases its 27,900 square-foot facility
in Hingham, Massachusetts, under an operating lease which
became effective on January 1, 1997, for a term of six
years. Rent charged to operations under this lease for
the first quarter of 1997 approximated $26,400. During
1996, DynaVac leased a facility in Weymouth,
Massachusetts, under an operating lease which expired on
December 31, 1996. Rent charged to operations under this
lease approximated $16,800 for the first quarter of 1996.
Tenney Engineering, Inc. leases its facility in Union,
New Jersey, under an operating lease which expires in
December 1998. Rent charged to operations under this
lease approximated $17,500 and $33,300 in 1997 and 1996,
respectively.
At March 31, 1997, the aggregate minimum rental
commitments under non-cancelable leases for the period
shown are as follows:
Year Capital Leases Operating Leases
(In thousands of dollars)
1997 $ 41 $ 177
1998 55 241
1999 55 157
2000 55 163
2001 33 169
Total $ 239 $ 907
Less imputed interest 67
Present value of net
lease payments $ 172
Less current
installments 43
Long-term debt
obligation at
March 31, 1997 $ 129
Imputed interest was calculated using rates between
7.06% - 9.76%
Note 8:
Debt:
Debt maturing within one year consists of the
following at March 31,
1997 1996
(In thousands of dollars)
Notes payable - bank $ 375 $ 0
Current portion of
capital leases 43 55
Current portion of
pension obligation 73 179
Total $ 491 $234
On September 12, 1996, the Company and Summit Bank (the
Bank) entered into a Loan and Security Agreement for a
$300,000 renewable working capital line of credit
expiring May 1, 1997, with interest at 2% over the Banks
prime lending rate (the Term Note). The Bank was
granted a security interest in substantially all the
Companys assets. At February 20, 1997, the Bank granted
a temporary increase of $100,000 in the line of credit,
raising it to $400,000. The Company as at March 31, 1997,
owes $375,000 under this line. On April 23, 1997, the
Bank increased the line of credit to $750,000 expiring on
May 1, 1998, with interest at 1-3/4% over the Banks
prime lending rate.
Long-term debt consists of the following at March 31,
1997
(In thousands
of dollars)
Capital lease obligations $ 172
Multi-employer pension obligation 426
Total long-term debt including
current maturities 598
Less: current maturities 116
Total long-term debt $ 482
No new capital leases were entered into for equipment
during the first quarter of 1997.
The Company formerly had employees who were members of a
union and contributed to multi-employer pension plan for
such employees in accordance with a collective bargaining
agreement based on monthly hours worked. Due to the
cessation of manufacturing operations at the Company's
Union Facility, the Company ceased being a participant in
the multi-employer pension plan in February 1993. Under
the Multi-Employer Pension Plan Amendments Act of 1980,
the Company may, under certain circumstances, become
subject to liabilities in excess of contributions made
under its collective bargaining agreement.
The Company received a demand from the Sheet Metal
Workers' National Pension Fund (the "Fund") for payment
of a withdrawal liability in quarterly installments of
$502,665 plus interest on overdue installments, statutory
liquidated damages, attorneys fees and injunctive
relief.
The Company negotiated with the Fund the amount of the
liability and an installment payment schedule.
On September 6, 1996, the Company agreed to a settlement
of the matter proposed by the Fund and it executed a
Settlement Agreement(the Agreement). Among other
matters, the Agreement provides that the Company shall
pay the Fund $720,090 (the Settled Amount) on account
of the withdrawal liability, statutory interest and
counsel fees; provided, however, that if the Company pays
to the Fund the amount of $397,330 principal, plus
interest of $74,455, totaling $471,785 -- $75,000 upon
signing and sixty (60) monthly payments of $6,613.09
commencing October 1, 1996 -- the Fund would accept the
total of $471,785 in satisfaction of the total withdrawal
liability.
The Agreement contains various representations and
warranties by the Company. In the event that timely
payments are not made or the Company otherwise defaults
under the Agreement, the Settled Amount will be due the
Fund, less any payments received. The Company has made
all payments to the Fund when they are due, and continues
to do so.
The Company had reserved on its balance sheet as at
December 31, 1995, the sum of $581,835 for the withdrawal
liability to the Fund. The Company will charge all the
payments made to the Fund to this reserve account; and if
all payments are made in accordance with the provisions
of the Agreement, any balance in the reserve will be
recognized as forgiveness of indebtedness when payments
are complete. At March 31, 1997, the reserve approximated
$426,000.
Note 9:
Net Revenue:
Product and product-related net revenue includes revenue
from the Companys manufacturing operation, sales of
reconditioned equipment and rental income. Service
revenue includes revenue from the servicing and
installation of equipment and from the services of the
Companys president provided to the Licensee during 1996
(see Note 4). Parts revenue includes revenue from the
sale of replacement and spare parts for equipment
previously manufactured by the Company, as well as
equipment currently being manufactured under the Tenney
name and competitors equipment.
Note 10:
Income taxes:
Effective January 1, 1993, the Company has adopted the
Statement of Financial Accounting Standards No. 109
("SFAS No. 109"), "Accounting for Income Taxes." SFAS 109
requires the use of an asset and liability approach in
accounting for income taxes. Deferred tax assets and
liabilities are recorded based on differences between the
financial statement and tax bases of assets and
liabilities at the tax rates in effect when these
differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance
if, based on the weight of available evidence, it is more
likely than not that all or some portion of the deferred
tax assets will not be realized. The ultimate realization
of the deferred tax asset depends on the Company's
ability to generate sufficient taxable income in the
future. While management believes that the total deferred
tax asset will eventually be fully realized by future
operations, as a result of the losses experienced prior
to 1994, management recorded a valuation allowance equal
to 100% of the deferred tax asset upon adoption of SFAS
109 on January 1, 1993. As a result, the initial
adoption of SFAS 109 has no impact on the Company's
consolidated financial statements.
At March 31, 1997, it was determined that the valuation
allowance should be reduced by $3,000. This determination
was based primarily on the improvement in the Company's
net income during 1997 and 1996.
Accordingly, management believes that it is more likely
than not that the Company will generate sufficient
taxable income to realize these future tax benefits. The
changes in the valuation allowance resulted in
the recording at March 31, 1997, of an income tax benefit
of $3,000.
If the Company is unable to generate sufficient taxable
income in the future, increases in the valuation
allowance will be required through a charge to expense.
If, however, the Company achieves sufficient
profitability to realize all of the deferred tax assets,
the valuation allowance will be further reduced and
reflected as an income tax benefit in future periods.
The components of the net deferred tax asset are as
follows at March 31,
1997
(In thousands
of dollars)
Deferred tax assets:
Inventory reserve $ 85
Accounts receivable reserve 10
Deferred compensation 10
Deferred pension obligation 154
Tax loss carryforward 964
Total deferred tax assets 1,223
Deferred tax liabilities:
Depreciation (1)
Valuation allowance (939)
Total net deferred tax assets $ 283
At March 31, 1997 and March 31, 1996, the Company
utilized net operating loss carryforwards of $55,000 and
$191,000, respectively. The income tax expense results
from the federal alternative tax which was allocated as
follows:
1997 1996
(In thousands of dollars)
Current income tax expense $ 0 $ 54
Deferred income tax benefit (3) (67)
Net income tax (benefit) $ (3) $ (13)
At March 31, 1997, the Company has available, for tax
reporting purposes, net operating loss carryforwards
of approximately $2,745,000 which expire through 2008.
A reconciliation of income tax provision at federal
statutory rate to the income tax provision at the
effective tax rate as follows: The effective rate for
1997 and 1996 was 39%.
1997 1996
(In thousands of dollars)
Income taxes computed at the
federal statutory rates $ 18 $ 65
State taxes (net of federal
benefit) 3 11
Realization of benefits of
tax loss carryforwards (21) (22)
Reduction of valuation
allowance (3) (67)
Net income tax (benefit) $ (3) $ (13)
Note 11:
Common stock:
On May 26, 1995, at the annual meeting, a new ten-year
incentive stock option plan for officers and key
employees was approved and adopted. The plan provided
that options could be granted from time to time at a
price of not less than 100% of the fair market value of
the common stock as of the date of grant for officers and
employees who own less than 10% of the voting stock of
the Company and 110% of fair market value for those
officers and employees who own more than 10% of the
voting stock (affiliate employees). Options granted are
exercisable immediately and terminate no later than ten
years from date of grant (five years from date of grant
for affiliate employees).
The fair value of each option granted is estimated on the
grant date using the Black-Scholes model. The following
assumptions were made in estimating fair value:
Assumption 1995 Plan
Dividend Yield 0%
Risk-free Interest Rate 7.50%
Expected Life 3 Years
Expected Volatility 23.96%
The Company applies APB Option 25 in accounting for its
stock compensation plan. Accordingly, no compensation
cost has been recognized for the 1995 Plan in 1997 or
1996. Had compensation cost been determined on the basis
of fair value pursuant to FASB Statement No. 123, net
income and earnings per share would have been reduced as
follows:
1997 1996
Net income
As reported 49,000 150,000
Pro forma 46,000 140,000
Primary earnings per share
As reported 0.01 0.04
Pro forma 0.01 0.03
Fully diluted earnings per share
As reported 0.01 0.04
Pro forma 0.01 0.03
Following is a summary of the status of the 1995 Plan
during the first quarter of 1997 and the year ended
December 31, 1996:
Weighted
Average
Number of Exercise
Shares Price
Outstanding at 1/1/97 290,000 $ 0.57104
Granted 50,000 0.70468
Exercised (10,000) 0.23437
Canceled (10,000) 0.23437
Outstanding at 3/31/97 320,000 $ 0.61296
Options exercisable at 3/31/97 320,000 $ 0.61296
Weighted average fair value
of options granted during
the first quarter of 1997 $ 0.26412
Weighted
Average
Number of Exercise
Shares Price
Outstanding at 1/1/96 155,000 $ 0.24420
Granted 145,000 0.89789
Exercised (10,000) 0.23437
Canceled 0 --
Outstanding at 12/31/96 290,000 $ 0.57104
Options exercisable
at 12/31/96 290,000 $ 0.57104
Weighted average fair value
of options granted during 1996 $ 0.21708
<TABLE>
Following is a summary of the status of options
outstanding at March 31, 1997:
<CAPTION>
Outstanding Options Exercisable Options
Weighted
Average Weighted Weighted
Remaining Average Average
Exercise Contractual Exercise Exercise
Price Range Number Life Price Number Price
<C> <C> <C> <C> <C> <C>
$0.23437-$0.25781 125,000 2 years $0.24420 125,000 $0.24420
$0.85937-$0.94531 145,000 3 years $0.89789 145,000 $0.89789
$0.70468 50,000 3 years $0.70468 50,000 $0.70468
</TABLE>
On March 11, 1997, the Board of Directors of the Company
adopted an amendment to the Companys Certificate of
Incorporation to classify outstanding Common Stock,
effective at the close of business April 10, 1997, as
Series B Common Stock. The amendment authorizes the
Company to issue 40 million shares of Series B Common
Stock, $.01 par value per share, and 10 million shares of
Series A Common Stock, par value $.01 per share. The
Board of Directors also voted to distribute one share of
Series A Common Stock on May 27, 1997, for each share of
Series B Common Stock owned of record April 10, 1997.
Note 12:
Commitments and contingencies:
Employment agreement:
In connection with the license agreement which provides
for the Company to receive $120,000 annually pursuant to
a consulting agreement (see Note 4), the Company entered
into a four-year employment agreement with its president
which required a minimum annual salary of $200,000
commencing in 1993 and which terminated in December 1996.
Lease commitments:
DynaTenn, Inc. (d/b/a DynaVac), a wholly owned
subsidiary which manufactures diversified industrial
vacuum equipment, leases its 27,900 square-foot facility
in Hingham, Massachusetts, under an operating lease which
became effective on January 1, 1997, for a term of six
years. Rent charged to operations under this lease
approximated $26,400 in 1997. During 1996, DynaVac
leased a facility in Weymouth, Massachusetts, under an
operating lease which expired on December 31, 1996. Rent
charged to operations under this lease approximated
$16,800.
Tenney Engineering, Inc. leases its facility in Union,
New Jersey, under an operating lease which expires in
December 1998. Rent charged to operations under this
lease approximated $17,500 and $33,300 in 1997 and 1996,
respectively.
Contingencies:
The Company is not a party to any material pending legal
proceeding.
* * *
<PAGE>
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Operating revenues and short-term borrowings under a
working capital line of credit appear to be sufficient to
cover corporate and associated administrative costs.
At March 31, 1997, the Companys cash and cash
equivalents totaled $50,000, a difference of $611,000
from the balance of $661,000 as at December 31, 1996. Net
cash used in operations totaled $894,000. The primary
uses of cash were the paying of accounts payable
$503,000, the increase of inventory $197,000, and the
reductions of billings in excess of estimated billings
$227,000. Cash was provided primarily by short-term
borrowings of $375,000 under the working capital line of
credit.
The Company is engaged in one industry segment: The
engineering, marketing and manufacturing of diversified
high-technology vacuum systems for space simulation,
optic coating and sputtering; and provides service,
refurbishing, upgrading, installation and sale or rental
of reconditioned test equipment.
RESULTS OF OPERATIONS
Total net revenue for the three months ended March 31,
1997, of $2,321,000 compares to net revenue of
$2,523,000 in the corresponding 1996 period.
Product and product-related net revenue for 1997 and 1996
was $1,983,000 and $2,030,000, respectively.
Service-related revenue of $213,000 for the three months
ended March 31, 1997, compares to the first quarter 1996
revenue of $198,000, an increase of 7%. The increase is
due primarily to higher maintenance contract revenues.
Included in the 1996 service revenue was revenue from the
Licensees agreement for the use of the services of the
Companys president of approximately $30,000.
Revenue related to the sale of parts totaled $125,000 and
$184,000 for the quarters ended March 31, 1997 and 1996,
respectively. The decrease was due to receiving fewer
parts orders.
Due to the completion of the License agreement in
November, 1996, there were no License fees earned during
the quarter ended March 31, 1997. During the quarter
March 31, 1996, $111,000 was earned as license fee.
The Companys order backlog at March 31, 1997, December
31, 1996, and March 31, 1996 was approximately $888,080,
$2,440,000 and $4,080,200, respectively. The decrease is
due primarily to an increase in completion of large
contract sales at the Companys DynaVac subsidiary.
The total cost of sales as a percentage of net revenue
was 75% for the quarter ended March 31, 1997, and
compares to 74% for the corresponding 1996 period.
The first quarter 1997 cost of sales percentage of
product and product-related sales was 77% and compares to
a cost of sales of 82% during 1996. The decrease is due
to an increased level of reconditioned equipment sales at
higher margins.
Service cost of sale as a percentage of sales was 70% and
60% for the 1997 and 1996 quarters, respectively. The
increase is due to lower sales in certain geographic
areas that did not cover fixed costs.
Cost of sales as a percentage of sales during 1997 for
parts was 54% and compares to 42% for the 1996
corresponding period. The increase was due to the type
of parts sold.
Selling and administrative expenses for the first quarter
of 1997 was $526,000 and compares to expenses of $519,000
in the 1996 period.
Interest expense was $4,000 in 1997 and compares to
expense of $4,000 in the 1996 period.
The first quarter net income was $49,000 and $150,000 in
1997 and 1996, respectively.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
A report on Form 8-K for an event occurring on
March 14, 1997, was filed for Item 5, reporting a
reclassification of stock and a stock distribution.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Tenney Engineering, Inc.
(Registrant)
s/Martin Pelman
Martin Pelman
Vice President, Finance
Principal Finance Officer
Dated: May 14, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 50000
<SECURITIES> 0
<RECEIVABLES> 1704000
<ALLOWANCES> (28000)
<INVENTORY> 662000
<CURRENT-ASSETS> 2739000
<PP&E> 1747000
<DEPRECIATION> 1398000
<TOTAL-ASSETS> 3561000
<CURRENT-LIABILITIES> 1704000
<BONDS> 0
0
0
<COMMON> 37000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3561000
<SALES> 2321000
<TOTAL-REVENUES> 2321000
<CGS> 1753000
<TOTAL-COSTS> 526000
<OTHER-EXPENSES> (8000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4000
<INCOME-PRETAX> 46000
<INCOME-TAX> (3000)
<INCOME-CONTINUING> 49000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 49000
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
