It’s Back on the NASDAQ System, but Scientific NRG’s Troubles Aren’t Over
Scientific NRG resumed trading on the NASDAQ over-the-counter market system Thursday after a six-month absence imposed because its assets had fallen below the minimum amount required to be listed.
Although the Anaheim company is back among those listed on the National Assn. of Securities Dealers Automated Quotation system (the only automated quotation system for the over-the-counter market), its comeback could be short-lived.
Scientific, which manufactures light fixtures, was given six months to get its total assets above $750,000 when it was dropped from NASDAQ in December.
In April, Scientific received an order worth at least $525,000 from Denny’s restaurants, which had helped raise its assets base to about $930,000 as of June 30, the last day of its fiscal 1989.
Still, the company’s most recent filing with the Securities and Exchange Commission indicates that Scientific still has serious problems.
Its working capital, for instance, fell from the $1.5 million it had as of June 30, 1986, to just $216,068 as of March 31, 1989. Analysts often use the working capital figure to gauge a company’s financial health.
“In order for the company to continue in business, additional capital will need to be raised and revenues will need to increase substantially,” the company’s management warned investors in its latest filing to the SEC.
“We’ve come a long way, but there is a lot of work to be done,” said Mark Morris, Scientific president and chief executive. He said the company is considering a variety of measures to improve its financial position, including being acquired by a larger corporation.
Despite the problems, there are a couple of bright spots in Scientific’s recent financial reports. For instance, the company reported that sales increased nearly 28% for the fiscal 1989 third quarter, to $432,400 from $311,920 for the same period the year before. For the same period, the company’s losses fell to $10,500 from the $32,163 reported for that period in the previous year.
Scientific is, however, heavily dependent on two customers. Sales to Denny’s and to Restaurant Enterprises Group accounted for 36.6% of its sales totals for the fiscal year ended June 30, 1988.
“A fair and honest appraisal would require admitting in many respects we are a one- to two-customer company and in some respects a one-product company,” Morris said.
Scientific’s common stock closed Friday at 34 cents a share.
A group of investors that includes several Mission Viejo executives has bought a 6.3% stake in a New Jersey-based manufacturer of prefabricated pools and pool products and has indicated that it may try to initiate a merger.
Several officers of Girard Corp., a Mission Viejo holding company, have disclosed in a Securities and Exchange Commission filing that they may try to place its chairman, Laurent H. Girard Jr., on the board of Heldor Industries Inc. They also said they may attempt to merge Heldor with another company.
The investor group holds 233,200 shares of Heldor common stock, including 142,100 shares bought between April 3 and May 30 for $381,785.
Executives at Heldor and at Girard Corp. were unavailable for further comment.
Heldor stock closed Friday at $2.13 a share, up 13 cents.
Belcor Inc. said it has paid $1.2 million and exchanged 500,000 shares of its common stock in order to acquire a computer service company. The Irvine maker of polyethylene bags and other products bought Finite Graphics of Camarillo as part of its continuing effort to diversify.
Finite sets up computer hardware and software packages to help clients tackle problems unique to their businesses.
Belcor closed Friday at 62.5 cents a share in over-the-counter trading, unchanged for the week.