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, 1998
____ 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
(Issuer's 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 issuer's
classes of common equity, as of the latest practicable date:
Class Outstanding at March 31, 1998
Series A Common Stock
($.01 par value) 3,714,842
Series B Common Stock
($.01 par value) 3,714,842
Transitional Small Business Disclosure Format:
Yes ____ No X
TENNEY ENGINEERING, INC.
FORM 10-QSB
QUARTER ENDED MARCH 31, 1998
I N D E X
PAGE
Part I - Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheet - March 31, 1998 3
Consolidated Condensed Statements of Operations -
Three months ended March 31, 1998 and 1997 4
Consolidated Condensed Statements of Cash Flows -
Three months ended March 31, 1998 and 1997 5
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis
Management's Discussion and Analysis of Financial
Condition and Results of Operations 17
Part II - Other Information 19
TENNEY ENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
MARCH 31, 1998
(In thousands of dollars - unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 80
Accounts receivable - net 1,159
Current portion of installment note receivables 266
Inventories 607
Prepaid expenses and other current assets 16
Deferred tax asset $ 95
Total Current Assets 2,223
Plant and equipment, net 428
Other assets 209
Deferred tax asset - long term $ 185
Total Assets $ 3,045
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Notes payable bank $ 750
Accounts payable and other accrued liabilities 1,230
Current portion of long-term capital leases 82
Accrued payroll and payroll taxes 164
Billings in excess of estimated revenue on
long-term contracts 202
Pension obligation, current portion $ 73
Total Current Liabilities 2,501
Long-term debt, net of current portion 454
Total Liabilities 2,955
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 3,727,980 shares 37
Issued 3,727,980 shares 37
Additional paid-in-capital 2,263
Retained earnings (deficit) (2,207)
130
Less treasury stock, 26,276 shares at cost 40
Total Stockholders Equity 90
Total Liabilities and Stockholders Equity $ 3,045
See Notes to Consolidated Financial Statements.
TENNEY ENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(In thousands of dollars - unaudited)
1998 1997
Net Revenue:
Product and product related $ 1,731 $ 1,983
Service 293 213
Parts 129 125
Totals 2,153 2,321
Cost of Sales:
Product and product related 1,429 1,535
Service 135 150
Parts 95 68
Totals 1,659 1,753
Gross Profit 494 568
Selling and administrative expenses 444 526
Income from operations 50 42
Other expense (income):
Interest expense 20 4
Other income, net (2) (8)
Totals 18 (4)
Income before income taxes 32 46
Income taxes (benefit) 0 (3)
Net Income $ 32 $ 49
Net Income per common share:
Series A $ 0.005 $ 0.005
Series B $ 0.005 $ 0.005
Exercise of options would not be dilutative.
TENNEY ENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
QUARTER ENDED MARCH 31, 1998 AND 1997
(In thousands of dollars - unaudited)
1998 1997
Operating activities:
Net income $ 32 $ 49
Adjustments to reconcile income to net
cash provided by (used in) operations:
Depreciation and amortization 26 16
Deferred tax asset 0 (3)
Changes in operating assets and liabilities:
Accounts and installments receivables 157 (34)
Inventories 20 (197)
Prepaid expenses and other current assets 22 42
Other assets 3 3
Accounts payable and other accrued
liabilities 33 (503)
Accrued payroll and payroll taxes (7) (40)
Billings in excess of estimated revenues (212) (227)
Net cash provided by (used in)
operating activities 74 (894)
Investing activities:
Acquisition of equipment 0 (64)
Cash used in investing activities 0 (64)
Financing activities:
Exercise of options and issuance of
common stock 0 2
Proceeds from working capital line of credit 0 375
Pension obligation (20) 0
Payments of note payable and long-term
capital leases (21) (30)
Net cash provided by (used in)
financing activities (41) 347
Net increase (decrease) in cash and cash
equivalents 33 (611)
Cash and cash equivalents, beginning of year 47 661
Cash and cash equivalents, end of period $ 80 $ 50
Supplemental disclosure of cash flow
information:
Interest paid $ 20 $ 4
Income taxes paid $ 0 $ 0
Note 1:
Summary of Accounting Policies:
The financial information enclosed herewith as at March 31, 1998
and for the three months ended March 31, 1997 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, 1998, the
changes in cash flow for the three months ended March 31, 1998 and
1997 and the results of operation for these periods.
This quarterly report should be read in conjunction with the
Company's 1997 Annual Report and the March 31, 1998 Management's
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, 1998
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, 1998 and
1997, respectively, from operations.
On September 12, 1996, the Company and Summit Bank, (the "Bank")
entered into a Loan and Security Agreement ("Term Note") for a
$300,000 renewable working capital line of credit expiring May 31,
1997. At April 23, 1997 the Term Note was renewed until May 31,
1998, and increased to the amount of $750,000. The Bank was granted
a security interest in substantially all the Company's assets. As
at December 31, 1997, the Company had borrowed $750,000 under the
Term Note. On November 5, 1997 the Bank notified the Company that
covenants under the Credit Agreement to maintain certain levels of
debt to tangible net worth and current assets to current
liabilities were not met on the Company's financial statements.
Payments of interest are being met in accordance with the terms of
the Note. The Bank has not made a demand for the principal amount
of the Term Note. The Bank has made it known that it will not renew
the Term Note on May 31, 1998. The Company is actively pursuing
available alternate financing sources; however, there is no
assurance that alternate sources can be found. If the Term Note is
not replaced, this would have a material adverse effect that may
cause insolvency proceedings.
Note 4:
Accounts receivable:
Accounts receivable consist of the following:
March 31,
1998
(In thousands
of dollars)
Accounts receivable, billed $ 693
Accounts receivable, unbilled 494
Allowance for doubtful accounts (28)
Totals $ 1,159
At March 31, 1998, sales recognized on the percentage of completion
method approximated $1,687,000.
Note 5:
Inventories:
Inventories consist of the following:
March 31,
1998
(In thousands
of dollars)
Raw materials $ 759
Less:
Provision for write-downs to estimated
realizable value 152
Totals $ 607
Accumulated costs on long-term contracts recognized by the
percentage of completion method (see Note 4) were approximately
$1,398,000.
Note 6:
Property and Equipment:
Property and equipment, which is stated at cost, is summarized as
follows at March 31, 1998:
March 31,
1998
(In thousands
of dollars)
Leasehold Improvements $ 70
Equipment 1,431
Equipment under capital leases 375
1,876
Accumulated depreciation (1,448)
Total property and equipment - net $ 428
The Company leases certain equipment for use in its operations
under capital leases. Property and equipment at March 31, 1998,
included capital leases of $375,000 and related accumulated
depreciation of $152,000.
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 1998 approximated $54,100, and $26,400 for the
first quarter of 1997.
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 $23,500 and
$17,500 in 1998 and 1997, respectively.
At March 31, 1998, 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)
1998 $ 60 $ 241
1999 102 157
2000 79 163
2001 33 169
2002 21 176
Total $ 295 $ 906
Less imputed interest 34
Present value of net
lease payments $ 261
Less current installments 82
Long-term debt obligation
at March 31, 1998 $ 179
Imputed interest was calculated using rates between 7.06% - 9.76%
Note 7:
Debt:
Debt maturing within one year consists of the following at
March 31,
1998 1997
(In thousands
of dollars)
Notes payable - bank $ 750 $ 375
Current portion of capital leases 82 43
Current portion of pension obligation 73 73
Total $ 905 $ 491
On September 12, 1996, the Company and Summit Bank, (the "Bank")
entered into a Loan and Security Agreement ("Term Note") for a
$300,000 renewable working capital line of credit expiring May 31,
1997. At April 23, 1997 the Term Note was renewed until May 31,
1998, and increased to the amount of $750,000. The Bank was granted
a security interest in substantially all the Company's assets. As
at December 31, 1997, the Company had borrowed $750,000 under the
Term Note. On November 5, 1997 the Bank notified the Company that
covenants under the Credit Agreement to maintain certain levels of
debt to tangible net worth and current assets to current
liabilities were not met on the Company's financial statements.
Payments of interest are being met in accordance with the terms of
the Note. The Bank has not made a demand for the principal amount
of the Term Note. The Bank has made it known that it will not renew
the Term Note on May 31, 1998. The Company is actively pursuing
available alternate financing sources; however, there is no
assurance that alternate sources can be found. If the Term Note is
not replaced, this would have a material adverse effect that may
cause insolvency proceedings.
Long-term debt consists of the following at March 31,
1998
(In thousands
of dollars)
Capital lease obligations $ 262
Multi-employer pension obligation 347
Total long-term debt including
current maturities 609
Less: current maturities 155
Total long-term debt $ 454
No new capital leases were entered into for equipment during the
first quarter of 1998.
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, 1998, the reserve approximated $347,000.
Note 8:
Net Revenue:
Product and product-related net revenue includes revenue from the
Company's manufacturing operation, sales of reconditioned equipment
and rental income. Service revenue includes revenue from the
servicing and installation of equipment. 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 9:
Income taxes:
The Company accounts for income taxes in accordance with the
Statement of Financial Accounting Standards ("SFAS No. 109"),
"Accounting for Income Taxes," which requires an asset and
liability approach to financial accounting and reporting for income
taxes. Deferred income tax assets and liabilities are computed
annually for differences between the financial statement and income
tax bases of assets and liabilities that will result in taxable or
deductible amounts in the future based on enacted tax laws and
rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax expense is the tax
payable or refundable for the period plus or minus the change
during the period in deferred tax assets and liabilities.
A reconciliation of the Company's income tax provision that would
be provided based on a statutory federal income tax rate of 34% to
the Company's effective rate is as follows:
1998 1997
(In Thousands
of Dollars)
Income taxes computed at the
federal statutory rates $ 0 $ 18
State taxes (net of federal benefit) 0 3
Realization of benefits of tax loss
carryforwards 0 (21)
Reduction of valuation allowance 0 ( 3)
Net income tax (benefit) $ 0 $ ( 3)
Deferred income taxes are provided for temporary differences
between the financial reporting and income tax basis of the
Company's assets and liabilities. Temporary differences, net
operating loss carryforwards and valuation allowances comprising
the net deferred taxes on the balance sheet at March 31, 1998, are
as follows:
(In Thousands
of Dollars)
Deferred tax assets:
Inventory reserve $ 52
Accounts receivable reserve 10
Deferred revenue 75
Deferred compensation 24
Deferred pension obligation 12
Tax loss carryforward 1,557
Total deferred tax assets 1,730
Deferred tax liabilities:
Depreciation (10)
Valuation allowance (1,440)
Total net deferred tax assets $ 280
The ultimate realization of the deferred tax asset depends on
the Company's ability to generate sufficient taxable income in the
future.
At March 31, 1998, the Company has available income tax net
operating loss carryforwards of approximately $4,570,000, which
expire through 2009.
Note 10:
Common stock:
On March 11, 1997 the Board of Directors resolved to amend the
Certificate of Incorporation to provide that Common Stock, $0.01
par value, be issued in two series, denominated Series A and Series
B, both series having the same rights, powers and privileges,
except that Series A has ten (10) votes per share.
The Board also resolved that all issued shares of Common Stock on
April 10, 1997 be classified as Series B Common Stock, $0.01 par
value.
In addition the Board resolved that a stock distribution of one (1)
share of Series A Common Stock, $0.01 par value, be distributed for
each share of Series B Common Stock owned by shareholders of record
on April 10, 1997. The distribution was paid on May 27, 1997.
This transaction was accounted for as a stock split.
Outstanding options were adjusted effective the close of business
April 10, 1997, so that Optionees have the right to buy a unit
consisting of one share of Series A Common Stock and one share of
Series B Common Stock for each share of Common Stock to which the
option relates at a price per unit equal to the price per share of
Common Stock specified in the outstanding option. The 1995
Incentive Stock Option Plan was amended to relate to an additional
330,000 shares of Series A 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 relating to 400,000 share of Common Stock. 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 24.89%
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 1998 or 1997. 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:
1998 1997
Net income (loss)
As reported 32,000 49,000
Pro forma 32,000 46,000
Primary earnings per share
As reported 0.01 0.01
Pro forma 0.01 0.01
Fully diluted earnings per share
As reported 0.01 0.01
Pro forma 0.01 0.01
Following is a summary of the status of the 1995 Plan during
the first quarter of 1998 and the year ended December 31, 1997:
Weighted
Average
Number of Exercise
Shares/Units Price
Outstanding at 1/1/98 307,000 $ 0.608968
Granted 0 --
Exercised 0 --
Canceled 0 --
Outstanding at 3/31/98 307,000 $ 0.608968
Options exercisable at 3/31/98 307,000 $ 0.608968
Weighted average fair value
of options granted during
the first quarter of 1998 $ 0
Weighted
Average
Number of Exercise
Shares/Units Price
Outstanding at 1/1/97 290,000 $ 0.24420
Granted 50,000 0.704688
Exercised (23,000) 0.23437
Canceled (10,000) 0.89789
Outstanding at 12/31/97 307,000 $ 0.608968
Options exercisable at 12/31/97 307,000 $ 0.608968
Weighted average fair value
of options granted during 1997 $ 0
Following is a summary of the status of options outstanding at
March 31, 1998:
Outstanding Units Exercisable Units
Weighted
Average Weighted Weighted
Remaining Average Average
Exercise Contractual Exercise Exercise
Price Range Number Life Price Number Price
$0.23437-$0.25781 122,000 1/2 year $0.24420 122,000 $0.24420
$0.85937-$0.94531 135,000 1 year $0.89789 135,000 $0.89789
$0.704688 50,000 2 years $0.704688 50,000 $0.704688
Note 11:
Commitments and contingencies:
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 for
the first quarter of 1998 approximated $54,100, and $26,400 for the
first quarter of 1997.
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 $23,500 and
$17,500 in 1998 and 1997, respectively.
Contingencies:
The Company is not a party to any material pending legal
proceeding.
* * *
MANAGEMENT'S DISCUSSION AND ANALYSIS OF 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, 1998 and
1997, respectively, from operations.
On September 12, 1996, the Company and Summit Bank, (the "Bank")
entered into a Loan and Security Agreement ("Term Note") for a
$300,000 renewable working capital line of credit expiring May 31,
1997. At April 23, 1997 the Term Note was renewed until May 31,
1998, and increased to the amount of $750,000. The Bank was granted
a security interest in substantially all the Company's assets. As
at December 31, 1997, the Company had borrowed $750,000 under the
Term Note. On November 5, 1997 the Bank notified the Company that
covenants under the Credit Agreement to maintain certain levels of
debt to tangible net worth and current assets to current
liabilities were not met on the Company's financial statements.
Payments of interest are being met in accordance with the terms of
the Note. The Bank has not made a demand for the principal amount
of the Term Note. The Bank has made it known that it will not renew
the Term Note on May 31, 1998. The Company is actively pursuing
available alternate financing sources; however, there is no
assurance that alternate sources can be found. If the Term Note is
not replaced, this would have a material adverse effect that may
cause insolvency proceedings.
At March 31, 1998, the Company's cash and cash equivalents totaled
$80,000, an addition of $33,000 from the balance of $47,000 as at
December 31, 1997. Net cash provided by operations totaled
$74,000. Cash was provided primarily by the increased collection
effort reducing the amount of outstanding receivables of $157,000.
The primary use of cash amounting to $212,000 was due to the
reduction of billings in excess of estimated revenue.
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, 1998, of
$2,153,000 compares to net revenue of $2,321,000 in the
corresponding 1997 period.
Product and product-related net revenue for 1998 and 1997 was
$1,731,000 and $1,983,000, respectively. The decrease was due to
lower sales in the DynaVac subsidiary.
Service-related revenue of $293,000 for the three months ended
March 31, 1998, compares to the first quarter 1997 revenue of
$213,000, an increase of 38%. The increase is due primarily to
larger numbers of upgrades and retrofits of Tenney equipment.
Revenue related to the sale of parts totaled $129,000 and $125,000
for the quarters ended March 31, 1998 and 1997, respectively.
The Company's order backlog at March 31, 1998, December 31, 1997,
and March 31, 1997 was approximately $1,800,000, $2,200,000 and
$888,000, respectively. The increase is due primarily to an
increase in receiving large contract sales at the Company's DynaVac
subsidiary.
The total cost of sales as a percentage of net revenue was 77% for
the quarter ended March 31, 1998, and compares to 75% for the
corresponding 1997 period.
The first quarter 1998 cost of sales percentage of product and
product-related sales was 82% and compares to a cost of sales of
77% during 1997. The increase is due to a higher amount of labor
costs in January and February at the DynaVac subsidiary.
Service cost of sales as a percentage of sales was 46% and 70% for
the 1998 and 1997 quarters, respectively. The decrease is due to
lower overhead costs and more favorable product mix.
Cost of sales as a percentage of sales during 1998 for parts was
74% and compares to 54% for the 1997 corresponding period. The
increase was due to the sales mix of parts.
Selling and administrative expenses for the first quarter of 1998
was $444,000 and compares to expenses of $526,000 in the 1997
period. The decrease is due to cost containment reductions made in
1997.
Interest expense was $20,000 in 1998 and compares to expense of
$4,000 in the 1997 period.
The first quarter net income was $32,000 and $49,000 in 1998 and
1997, respectively.
PART II - OTHER INFORMATION
Item 6. Exhibits
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March
31, 1998.
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: April 23, 1998
5TENNEY ENGINEERING, INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS