-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I0cqK/q3T8t0L7ZKb41T6Qrd1jca5cAHFcjdhWtIagFG0bTOJw80IIbX90CfBsZy q+/joEqPdDPwpI5TsbK1FA== 0000891092-96-000012.txt : 19960126 0000891092-96-000012.hdr.sgml : 19960126 ACCESSION NUMBER: 0000891092-96-000012 CONFORMED SUBMISSION TYPE: 10-Q CONFIRMING COPY: PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19960125 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEL INSTRUMENT ELECTRONICS CORP CENTRAL INDEX KEY: 0000096885 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 221441806 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-18978 FILM NUMBER: 00000000 BUSINESS ADDRESS: STREET 1: 728 GARDEN ST CITY: CARLSTADT STATE: NJ ZIP: 07072 BUSINESS PHONE: 2019331600 MAIL ADDRESS: STREET 1: 728 GARDEN ST CITY: CARLSTADT STATE: NJ ZIP: 07072 10-Q 1 QUARTERLY REPORT ON FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------ FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 33-18978 TEL-INSTRUMENT ELECTRONICS CORPORATION (Exact name of the Registrant as specified in Charter) New Jersey 22-1441806 (State of Incorporation) (I.R.S. Employer ID Number) 728 Garden Street, Carlstadt, New Jersey 07072 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone No. including Area Code: 201-933-1600 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 [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: 1,603,806 shares of Common stock, $.10 par value as of November 6, 1995. TEL-INSTRUMENT ELECTRONICS CORPORATION TABLE OF CONTENTS PAGE ---- Financial Statements (Unaudited) Condensed Comparative Balance Sheets September 30, 1995 and March 31, 1995 1 Condensed Comparative Statements of Operations - Three and Six Months Ended September 30, 1995 and 1994 2 Condensed Comparative Statements of Cash Flows - Six Months Ended September 30, 1995 and 1994 3 - 4 Notes to Condensed Financial Statements 5 Management's Discussion and Analysis of Financial Condition and Results of Operations 6 - 7 Signature 7 TEL-INSTRUMENT ELECTRONICS CORPORATION CONDENSED COMPARATIVE BALANCE SHEETS (Unaudited) September 30, 1995 and March 31, 1995 September 30, March 31, 1995 1995 ----------- ----------- ASSETS Current assets: Cash $ 43,685 38,768 Accounts receivable, net 273,177 239,479 Inventories 445,207 482,273 Other current assets 32,811 35,103 ----------- ----------- Total current assets 794,880 795,623 Office and manufacturing equipment, net 35,364 40,218 Other assets, net 37,730 36,601 ----------- ----------- Total assets 867,974 872,442 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable -- 16,667 Accrued payroll, deferred wages and vacation pay 587,324 560,870 Accounts payable and accrued expenses 592,824 737,305 ----------- ----------- Total current liabilities 1,180,148 1,314,842 Note payable - related party 100,000 100,000 Convertible subordinated notes 65,000 65,000 Redeemable preferred stock 591,643 576,643 ----------- ----------- Total liabilities 1,936,791 2,056,485 ----------- ----------- Stockholders' deficiency: Common stock 160,383 160,383 Additional paid-in capital 3,166,432 3,181,432 Accumulated deficit (4,395,632) (4,525,858) ----------- ----------- Total stockholders' deficiency (1,068,817) (1,184,043) ----------- ----------- Total liabilities and stockholders' deficiency $ 867,974 872,442 =========== =========== See accompanying notes to condensed financial statements. -1- TEL-INSTRUMENT ELECTRONICS CORPORATION CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended September 30, September 30, 1995 1994 1995 1994 ----------- ----------- ----------- ----------- Sales: Government, net 259,403 47,262 604,741 115,808 Commercial, net 333,745 313,825 618,775 625,315 ----------- ----------- ----------- ----------- Total sales 593,148 361,087 1,223,516 741,123 Cost of sales 238,570 147,903 499,908 344,231 ----------- ----------- ----------- ----------- Gross margin 354,578 213,184 720,608 396,892 Operating expenses: Selling, general and administrative 173,487 145,084 375,798 300,326 Engineering, research and development 89,246 73,759 179,293 146,599 ----------- ----------- ----------- ----------- Total operating expenses 262,733 218,843 555,091 446,925 ----------- ----------- ----------- ----------- Profit (loss) from operations 91,845 (5,659) 165,517 (50,033) Other income (expenses): Interest income 185 0 185 0 Interest expense (17,966) (21,156) (35,476) (42,622) ----------- ----------- ----------- ----------- Net profit (loss) $ 74,064 (26,815) 130,226 (92,655) =========== =========== =========== =========== Dividends per share $ 0.05 (0.02) 0.08 (0.06) =========== =========== =========== =========== Weighted average shares outstanding 1,603,806 1,603,806 1,603,806 1,603,806
See accompanying notes to condensed financial statements. -2- TEL-INSTRUMENT ELECTRONICS CORPORATION CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended Sept. 30, 1995 1994 ----------- ----------- Increase (decrease) in cash: Cash flows from operating activities: Cash received from customers $ 1,194,547 960,670 Cash paid to vendors and employees (1,168,197) (928,436) Interest received 183 -- Interest paid (1,494) (6,935) ----------- ----------- Net cash provided by operating activities 25,039 25,299 Cash flows from investing activities: Cash purchases of property, plant and equipment (3,455) (12,795) ----------- ----------- Net cash used in investing activities (3,455) (12,795) ----------- ----------- Cash flows from financing activities: Repurchase of shares -- (12) Repayment of debt (16,667) (12,500) ----------- ----------- Net cash used in financing activities (16,667) (12,512) ----------- ----------- Net increase (decrease) in cash 4,917 (8) Cash at beginning of period 38,768 15,970 ----------- ----------- Cash at end of period $ 43,685 15,962 =========== =========== See accompanying notes to condensed financial statements. -3- TEL-INSTRUMENT ELECTRONICS CORPORATION CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS, continued (Unaudited) Six Months Ended Sept. 30, 1995 1994 --------- --------- Net profit (loss) $ 130,226 (92,655) Adjustments: Depreciation 8,309 4,888 Changes in assets and liabilities: (Increase) decrease in accounts receivable (33,698) 32,170 Decrease (increase) in inventories 37,066 (66,483) Decrease in other current assets 2,292 4,724 (Increase) decrease in other assets (1,129) 342 Increase in accrued payroll, deferred wages and vacation pay 26,454 6,870 (Decrease) increase in accounts payable and accrued expenses (144,481) 135,443 --------- --------- Net cash provided by operating activities $ 25,039 25,299 ========= ========= Non-cash investing and financing activities: Redeemable preferred stock dividends accrued 15,000 15,000 See accompanying notes to condensed financial statements. -4- TEL-INSTRUMENT ELECTRONICS CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS Note 1 In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position of Tel Instrument Electronics Corp as of September 30, 1995, the results of operations for the three and six months ended September 30, 1995 and September 30, 1994 and statements of cash flows for the six months ended September 30, 1995 and September 30, 1994. These results are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Company's Annual Report to the Securities and Exchange Commission on Form 10-K for the year ended March 31, 1995. Note 2 Certain reclassifications have been made to the 1995 financial statements to be consistent with the fiscal year 1996 presentation. -5- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION RESULTS OF OPERATIONS Sales Net sales increased $232,061 (64.3%) and $479,393 (64.7%) for the three and six months ended September 30, 1995, respectively, as compared to the same periods in the prior fiscal year. The increase in sales is primarily attributed to the government segment for shipments associated with contracts with the Canadian Defense Forces and the United States Air Force. The uncertainty of the commercial segment continues and led to a slight decline in commercial sales which offset the increase in government sales. While sales increased, the stagnant conditions experienced in both the commercial airline and government segments continue. In fiscal year 1995 the Company was awarded an open quantity contract by the U.S. Air Force in the amount of $1,679,265 of which firm orders have been received in the amount of $1,436,260. Shipments against this contract began in the first quarter of fiscal year 1996. In July 1995, the U.S. Air Force placed a hold on further shipments until certain design specifications have been clarified and incorporated. A significant portion of the Company's sales for fiscal 1996 were to be derived from this contract. Fiscal year 1996 sales are dependent upon a favorable resolution of the contract with the U.S. Air Force. A small contract for $183,000 has been received from the U.S. Army and should be shipped in the fiscal year 1996. The future growth and profitability continue to be dependent on a turnaround of the commercial airline industry, introduction and acceptance of new products, and the award of additional government contracts. Gross Margin Gross margin increased $145,394 (68.2%) and $323,716 (81.6%) for the three and six months ended September 30, 1995, respectively, as compared to the corresponding periods in the prior fiscal year. This increase is attributed to the higher volume, sale of higher margin products, and the additional absorption of overhead expenses. The gross margin percentage was 59.0% for the six months ended September 30, 1995 as compared to 53.5% for the same period last year. The higher percentage gross margin is not expected to continue once Tel starts shipping the lower margin products for the Air Force contract. Operating Expenses Total selling, general and administrative expenses increased $28,403 (19.6%) and $75.472 (25.2%) for the three and six months ended September 30, 1995, respectively, as compared to the same periods in the prior fiscal year. The increase is attributed to an increase in selling expenses associated with the addition to staff of a Director of Marketing and commissions associated with government sales. Engineering, research and development expenditures increased $15,487 (21.1%) and $32,694 (22.3%) for the same period due to increased development efforts. The net income for the three months ended September 30, 1995 was $74,064 or $0.05 per share as compared to a net loss of $26,815 or $.02 per share for the three months ended September 30, 1994. The net income for the six months ended September 30, 1995 was $130,226 or $0.08 per share as compared to a net loss of $92,655 or $.06 per share for the six months ended September 30, 1994. -6- LIQUIDITY AND CAPITAL RESOURCES The working capital deficiency decreased $133,951 for the first six months of fiscal year 1996 to $385,268. The improvement in working capital is primarily due to the improvement in operations. The Company has been able to satisfy its cash needs as a result of the recent improvements in operations. The Company's ability to continue is dependent upon its ability to generate sufficient cash flow from operations or to obtain additional financing. Since securing financing from traditional sources is difficult, short term liquidity must continue to be provided by cash generated from operations. Management's plans to improve profitability and cash flow are based on cost reduction measures, continued sales efforts, and incremental revenues derived from new product developments. However, as noted above, the Company's liquidity can be significantly affected if the contract with the U.S. Air Force is terminated. Management continues to evaluate various means of restructuring and/or extending the payment terms of this redeemable preferred stock. There was no significant impact on the Company's operations as a result of inflation for the six months ended September 30, 1995. These statements should be read in conjunction with the Company's annual report to the Securities and Exchange Commission on Form 10-K for fiscal year ending March 31, 1995. 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. TEL-INSTRUMENT ELECTRONICS CORP Date 13 November 95 /s/ Harold K. Fletcher ------------------------------- Harold K. Fletcher Chairman and President -7- EX-27 2 FDS --
5 1,000 6-mos MAR-31-1996 APR-01-1995 SEP-30-1995 44 0 324 (51) 445 795 35 8 868 1,180 0 592 0 160 (1,229) 868 1,224 1,224 500 500 555 0 35 130 0 130 0 0 0 130 .08 .08
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