-----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, RTek7eIcLd7/MPotoPmTawmRXV4a+Gy3q9wVIPITCUtJitV0lh4nUJYJE0uX6SZU lQeGyDzlaGgPVo0EvS8YYg== 0000891092-96-000021.txt : 19960216 0000891092-96-000021.hdr.sgml : 19960216 ACCESSION NUMBER: 0000891092-96-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951230 FILED AS OF DATE: 19960213 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: 96516553 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 December 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 January 30, 1996. TEL-INSTRUMENT ELECTRONICS CORPORATION TABLE OF CONTENTS PAGE ---- Financial Statements (Unaudited) Condensed Comparative Balance Sheets December 30, 1995 and March 31, 1995 1 Condensed Comparative Statements of Operations - Three and Nine Months Ended - December 30, 1995 and 1994 2 Condensed Comparative Statements of Cash Flows - Nine Months Ended December 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) December 30, 1995 and March 31, 1995 December 30, March 31, 1995 1995 ----------- ----------- ASSETS Current assets: Cash $ 66,208 38,768 Accounts receivable, net 218,782 239,479 Inventories 455,592 482,273 Other current assets 34,464 35,103 ----------- ----------- Total current assets 775,046 795,623 Office and manufacturing equipment, net 37,522 40,218 Other assets, net 37,727 36,601 ----------- ----------- Total assets 850,295 872,442 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable 0 16,667 Accrued payroll, deferred wages and vacation pay 574,471 560,870 Accounts payable and accrued expenses 585,116 737,305 ----------- ----------- Total current liabilities 1,159,587 1,314,842 Note payable - related party 100,000 100,000 Convertible subordinated notes 65,000 65,000 Redeemable preferred stock 599,143 576,643 ----------- ----------- Total liabilities 1,923,730 2,056,485 ----------- ----------- Stockholders' deficiency: Common stock 160,383 160,383 Additional paid-in capital 3,158,932 3,181,432 Accumulated deficit (4,392,750) (4,525,858) ----------- ----------- Total stockholders' deficiency (1,073,435) (1,184,043) ----------- ----------- Total liabilities and stockholders' deficiency $ 850,295 872,442 =========== =========== See accompanying notes to condensed financial statements. -1- TEL-INSTRUMENT ELECTRONICS CORPORATION CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended December 30, December 30, 1995 1994 1995 1994 ----------- ----------- ----------- ----------- Sales: Government, net $ 216,700 127,411 818,441 243,219 Commercial, net 290,765 399,486 909,540 1,024,801 ----------- ----------- ----------- ----------- Total sales 507,465 526,897 1,727,981 1,268,020 Cost of sales 190,690 247,341 690,598 591,572 ----------- ----------- ----------- ----------- Gross margin 316,775 279,556 1,037,383 676,448 Operating expenses: Selling, general and administrative 188,755 150,336 564,553 450,662 Engineering,research and development 107,909 74,407 287,202 221,006 ----------- ----------- ----------- ----------- Total operating expenses 296,664 224,743 851,755 671,668 ----------- ----------- ----------- ----------- Profit (loss) from operations 20,111 54,813 185,628 4,780 Other income (expenses): Interest income 329 0 512 0 Interest expense (17,556) (20,858) (53,032) (63,480) ----------- ----------- ----------- ----------- Net profit (loss) before extraordinary item 2,882 33,955 133,108 (58,700) Extraordinary item -- 18,942 -- 18,942 ----------- ----------- ----------- ----------- Net profit (loss) $ 2,882 52,897 133,108 (39,758) =========== =========== =========== =========== Net profit (loss) per common share before extraordinary item $ 0.00 0.02 0.08 (0.04) =========== =========== =========== =========== Net profit (loss) per common share $ 0.00 0.03 0.08 (0.02) =========== =========== =========== =========== Dividends per share None None 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) Nine Months Ended Dec. 30, 1995 1994 ----------- ----------- Increase (decrease) in cash: Cash flows from operating activities: Cash received from customers $ 1,748,678 1,499,254 Cash paid to vendors and employees (1,684,567) (1,354,101) Interest received 512 -- Interest paid (10,313) (18,063) ----------- ----------- Net cash provided by operating activities 54,310 127,090 Cash flows from investing activities: Cash purchases of property, plant and equipment (10,203) (7,810) ----------- ----------- Net cash used in investing activities (10,203) (7,810) ----------- ----------- Cash flows from financing activities: Repurchase of shares -- (12) Repayment of debt (16,667) (48,000) ----------- ----------- Net cash used in financing activities (16,667) (48,012) ----------- ----------- Net increase (decrease) in cash 27,440 71,268 Cash at beginning of period 38,768 15,970 ----------- ----------- Cash at end of period $ 66,208 87,238 =========== =========== See accompanying notes to condensed financial statements. -3- TEL-INSTRUMENT ELECTRONICS CORPORATION CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS, continued (Unaudited) Nine Months Ended Dec. 30, 1995 1994 ----------- ----------- Net profit (loss) $ 133,108 (39,758) Adjustments: Depreciation 12,899 7,403 Gain on Extinguishment of debt (18,942) Changes in assets and liabilities: Decrease in accounts receivable 20,697 40,441 Decrease (increase) in inventories 26,681 (77,036) Decrease (increase) in other current assets 639 (367) (Increase) decrease in other assets (1,126) 30,491 Increase in progress billings 167,698 Increase in accrued payroll, deferred wages and vacation pay 13,601 14,341 (Decrease) increase in accounts payable and accrued expenses (152,189) 2,819 ----------- ----------- Net cash provided by operating activities $ 54,310 129,090 =========== =========== Non-cash investing and financing activities: Redeemable preferred stock dividends accrued 22,500 22,500 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 December 30, 1995, the results of operations for the three and nine months ended December 30, 1995 and December 30, 1994 and statements of cash flows for the nine months ended December 30, 1995 and December 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 decreased $19,432 (3.7%) and increased $459,961 (36.3%) for the three and nine months ended December 30, 1995, respectively, as compared to the same periods in the prior fiscal year. The increase in sales for the nine months period is primarily attributed to the government segment for shipments associated with contracts with the Canadian Defense Forces and the United States Air Force. The decrease in sales for the three month period is primarily due to the suspension of shipments to the United States Air Force in that period and a weakening in commercial sales. The uncertainty of the commercial segment continues and resulted in a 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 May 1995. In July 1995, the U.S. Air Force placed a hold on further shipments until certain design specifications have been clarified and incorporated. An agreement with the U.S Air Force has been signed and shipments should resume in the final quarter of fiscal year 1996. A small contract for $183,000 has been received from the U.S. Army and was shipped in the third quarter of 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 $37,219 (13.3%) and $360,935 (53.4%) for the three and nine months ended December 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 60.0% for the nine months ended December 30, 1995 as compared to 53.3% 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 $38,419 (25.6%) and $113,891 (25.3%) for the three and nine months ended December 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 $33,502 (45.0%) and $66,196 (30.0%), respectively, for the same periods due to increased development efforts. The net income for the three months ended December 30, 1995 was $2,883 or $0.00 per share as compared to a net income of $52,897 or $0.03 per share for the three months ended December 30, 1994. The net income for the nine months ended December 30, 1995 was $133,107 or $0.08 per share as compared to a net loss of $39,758 or $0.02 per share for the nine months ended December 30, 1994. -6- LIQUIDITY AND CAPITAL RESOURCES The working capital deficiency decreased $134,678 for the first nine months of fiscal year 1996 to $384,541. 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. Management continues to evaluate various means of restructuring and/or extending the payment terms of the redeemable preferred stock. There was no significant impact on the Company's operations as a result of inflation for the nine months ended December 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____________________ Harold K. Fletcher Chairman and President -7- EX-27 2 FDS ARTICLE 5 FOR FORM 10-Q
5 1,000 9-mos MAR-31-1996 APR-01-1995 DEC-30-1995 66 0 269 (51) 455 775 38 13 850 1,159 0 599 0 160 (1,234) 850 1,728 1,728 691 691 852 0 53 133 0 133 0 0 0 133 .08 .08
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