-----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, TLQ/JdwM0g3FVkZRpFtqtyZJiWLsd803/D+ag7ARgYB0ZJcx5znKPZqpIPU+PUN9 22HtC1KxytZR9bWN6GzO7A== 0000905718-99-000275.txt : 19990429 0000905718-99-000275.hdr.sgml : 19990429 ACCESSION NUMBER: 0000905718-99-000275 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARRINGER TECHNOLOGIES INC CENTRAL INDEX KEY: 0000010119 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 840720473 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-03207 FILM NUMBER: 99602952 BUSINESS ADDRESS: STREET 1: 219 SOUTH STREET CITY: NEW PROVIDENCE STATE: NJ ZIP: 07974 BUSINESS PHONE: 9086658200 MAIL ADDRESS: STREET 1: 219 SOUTH STREET CITY: NEW PROVIDENCE STATE: NJ ZIP: 07974 FORMER COMPANY: FORMER CONFORMED NAME: BARRINGER RESOURCES INC DATE OF NAME CHANGE: 19910331 FORMER COMPANY: FORMER CONFORMED NAME: BARRINGER RESEARCH INC DATE OF NAME CHANGE: 19800821 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 March 31, 1999 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-3207 Barringer Technologies Inc. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 84-0720473 (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION INCORPORATION OR ORGANIZATION) NUMBER) 30 Technology Drive, Warren, New Jersey 07059 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (908) 222-9100 (Registrant's telephone number, including area code) ________________________________________________________________________________ (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT) 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 1939 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 practicable date: Common stock, $0.01 par value - outstanding as of April 21, 1999 - 7,214,197 shares BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES INDEX Part I - Financial Information Page No. Item 1. Financial Statements. - Consolidated Balance Sheets as of March 31, 1999 (unaudited) and December 31, 1998 3 - Consolidated Statements of Income (unaudited) for the three months ended March 31, 1999 and 1998 5 - Consolidated Statement of Stockholders' Equity and Comprehensive Income 6 - Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 1999 and 1998 7 - Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 9 Item 3. Quantitive and Qualitative Disclosures about Market Risk. 12 Part II - Other Information 13 Item 1. Legal Proceedings. 13 Signatures 14 Exhibits Part I - Item 1. Financial Statements BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS March 31, Dec. 31, 1999 1998 (unaudited) Current assets: Cash and cash equivalents $14,632,000 $18,802,000 Marketable securities 17,562,000 15,606,000 Trade receivables, less allowances of $365,000 and $626,000 5,724,000 6,502,000 Inventories 5,152,000 3,943,000 Prepaid expenses and other 1,380,000 1,111,000 Deferred tax asset 2,842,000 3,092,000 ---------- ------------ Total current assets 47,292,000 49,056,000 Property and equipment 2,476,000 2,349,000 Other assets 1,199,000 1,239,000 ---------- ------------ Total assets $50,967,000 $52,644,000 ========== =========== See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY March 31, Dec. 31, 1999 1998 (unaudited) Current liabilities: Accounts payable $1,961,000 $1,169,000 Accrued liabilities 523,000 946,000 Accrued payroll and related taxes 924,000 1,005,000 Accrued commission payable 171,000 127,000 Income taxes payable 69,000 112,000 ---------- --------- Total current liabilities 3,648,000 3,359,000 Non-current liabilities 147,000 145,000 ---------- --------- Total liabilities 3,795,000 3,504,000 ---------- --------- Stockholders' equity: Convertible preferred stock, $1.25 par value, 1,000,000 shares authorized, none outstanding Preferred stock, $2.00 par value, 4,000,000 shares authorized: 270,000 shares designated class A convertible preferred stock, 45,146 shares outstanding less discount of $30,000 47,000 47,000 730,000 shares designated class B convertible preferred stock, 22,500 shares outstanding 45,000 45,000 Common stock, $.01 par value, 20,000,000 shares authorized, 7,856,000 and 7,851,000 shares outstanding, respectively 79,000 79,000 Additional paid-in capital 54,723,000 54,693,000 Accumulated deficit (3,859,000) (4,359,000) Foreign currency translation (842,000) (786,000) ----------- ----------- 50,193,000 49,719,000 Less: common stock in treasury at cost, 462,000 and 92,000 shares, respectively (3,021,000) (579,000) ----------- ---------- Total stockholders' equity 47,172,000 49,140,000 ------------ ----------- Total liabilities and stockholders' equity $50,967,000 $52,644,000 ========== ========== See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, (UNAUDITED) 1999 1998 -------------------------------------------------------- Revenues $5,277,000 $5,948,000 Cost of revenues 2,140,000 2,435,000 -------------------------- ------------------------- 3,137,000 3,513,000 -------------------------- ------------------------- Operating expenses: Selling, general and administrative 2,166,000 1,696,000 Amortization of goodwill 39,000 -- Product development 634,000 362,000 -------------------------- ------------------------- 2,839,000 2,058,000 -------------------------- ------------------------- Operating income 298,000 1,455,000 -------------------------- ------------------------- Other income (expense): Interest income 485,000 150,000 Other, net 17,000 (14,000) -------------------------- ------------------------- 502,000 136,000 -------------------------- ------------------------- Income before income tax benefit 800,000 1,591,000 Income tax provision (benefit) (note 2) 300,000 (200,000) -------------------------- ------------------------- Net income 500,000 1,791,000 Preferred stock dividend requirements (2,000) (3,000) -------------------------- ------------------------- Net income attributable to common $498,000 $1,788,000 stockholders ========================== ========================= Per share data (note 3): Basic earnings per share $ 0.06 $ 0.32 ========================== ========================= Diluted earnings per share $ 0.06 $ 0.28 ========================== ========================= Weighted average common and common equivalent shares outstanding: Basic 7,712,000 5,519,000 ========================== ========================= Diluted 8,397,000 6,391,000 ========================== ========================= See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
Compre- Common Stock Class A Class B Paid-in Deficit Translation Treasury hensive Preferred Preferred Capital* Adjustment Stock Income Stock Stock Total Equity Shares Amount Shares Amount Shares Amount ------ ------ ------ ------ ------ ------ ------ ------- ------- ----------- ------- --------- Balance - January 1, 1998 $ 49,140 7,851 $ 79 39 $47 23 $ 45 $54,693 $(4,359) $ (786) $(579) Net income 500 500 $ 500 Translation adjustment (56) (56) (35) ------- Comprehensive Income $ 465 ======= Exercise of stock options and warrants 28 6 28 Repurchase of common stock (2,505) (2,505) Sale of treasury stock, net of notes receivable ($97) 0 (63) 63 Repayment of stockholder loan 65 65 ------ ----- ----- ----- ----- ------ ---- -------- ---------- -------- -------- Balance - March 31, 1999 $ 47,172 7,857 $ 79 39 $47 23 $45 $54,723 $(3,859) $(842) $(3,021) ======== ===== ===== ==== ===== ====== ==== ======== ========== ======== ========
- ------------------------- * At March 31, 1999, net of notes receivable of $1,517 from the sale of stock. See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, (UNAUDITED) 1999 1998 -------------- -------------- OPERATING ACTIVITIES Net Income $500,000 $1,791,000 Items not affecting cash: Depreciation and amortization 218,000 100,000 Inventory and accounts receivable reserves 42,000 166,000 Deferred tax provision (benefit) 250,000 (300,000) Other (35,000) -- Increase in non-cash working capital balances (461,000) (1,675,000) --------------- -------------- Cash provided by operating activities 514,000 82,000 --------------- -------------- INVESTING ACTIVITIES Purchase of equipment and other (316,000) (304,000) Sale (purchase) of marketable securities (1,956,000) 1,999,000 --------------- -------------- Cash provided by (used in) investing (2,272,000) 1,695,000 activities --------------- -------------- FINANCING ACTIVITIES Acquisition of treasury stock (2,505,000) -- Repayment of loan from employee 65,000 -- Warrant and option exercises 28,000 105,000 --------------- -------------- Cash provided by (used in) financing (2,412,000) 105,000 activities --------------- -------------- Increase (decrease) in cash and cash equivalents (4,170,000) 1,882,000 Cash and cash equivalents at beginning of period 18,802,000 8,188,000 --------------- -------------- Cash and cash equivalents at end of period $14,632,000 $10,070,000 =============== ============= CHANGES IN COMPONENTS OF NON-CASH WORKING CAPITAL BALANCES RELATED TO OPERATIONS Receivables $768,000 $304,000 Inventory (1,241,000) (375,000) Other current assets (277,000) (60,000) Other assets - - Accounts payable and accrued expenses 289,000 (1,544,000) ---------------- --------------- Increase in non-cash working capital balances $(461,000) $(1,675,000) ================ =============== Cash paid during the period for income taxes $210,000 $45,000 =============== ============== See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of the Company, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the consolidated financial position of the Company as of March 31, 1999 and the results of its operations and its cash flows for the three months ended March 31, 1999 and 1998, respectively. The accounting policies followed by the Company are set forth in the Notes to Consolidated Financial Statements in the audited consolidated financial statements of Barringer Technologies Inc. and Subsidiaries included in its Annual Report on Form 10-K for the year ended December 31, 1998. This report should be read in conjunction therewith. The results of operations for the three months ended March 31, 1999, are not necessarily indicative of the results to be expected for any other interim period or for the full year. 2. At March 31, 1999, a valuation allowance has been provided for certain limitations applied to the net operating loss carryforward of a subsidiary. At March 31, 1999, the net deferred tax asset of $2,792,000, included approximately $445,000 and $2,347,000 related to the Company's Canadian and U.S. operations, respectively. Based on historical results and estimated 1999 earnings, which include earnings from certain contracts, as well as available tax planning strategies, management considers realization of the unreserved deferred tax asset more likely than not. Additional reductions to the valuation allowance will be recorded when, in the opinion of management, the Company's ability to generate taxable income is considered more likely than not.
3. Basic and diluted earnings per share have been computed as follows: Shares (Denominator) Per Share Amount - --------------------------------------------------------------------------------------------------- ------------------- For the three months ended March 31, 1999: Basic Earnings Per Share Income attributable to common shareholders $ 498,000 7,712,000 $0.06 ==== Effect of dilutive securities Warrants and options - 663,000 Convertible preferred dividend requirements 2,000 22,000 -------- --------- Diluted Earnings Per Share Income attributable to common stockholders and assumed conversions $ 500,000 8,397,000 $0.06 ======== ========= ==== For the three months ended March 31, 1998: Basic Earnings Per Share Income attributable to common shareholders $1,788,000 5,519,000 $0.32 ========= ========= ==== Effect of dilutive securities Warrants and options - 848,000 Convertible preferred dividend requirements 3,000 24,000 --------- --------- Diluted Earnings Per Share Income attributable to common stockholders and assumed conversions $1,791,000 6,391,000 $0.28 ==================== =================== ====
PartI - Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following table presents certain income and expense items from the Company's consolidated statements of operations expressed as a percentage of revenues for the following periods:
Percentage of Total Revenue Three months ended March 31, 1999 1998 ------- ---- Statement of operations data: Revenues from operations........................ 100.0 100.0 Cost of revenues................................ 40.6 40.9 -------- -------- Gross profit.................................... 59.4 59.1 Selling, general and administrative expenses.... 41.0 28.5 Amortization of goodwill........................ 0.7 -- Product development............................. 12.0 6.1 -------- ------- Operating income ............................... 5.7 24.5 Other income, net............................... 9.5 2.3 Income tax benefit (provision).................. (5.7) 3.3 -------- ------- Net income ..................................... 9.5 30.1 Preferred stock dividend requirements........... * * -------- ------- Net income attributable to common stockholders.. 9.5 30.1 ======== ======= * Less than .5%
Comparison of the Quarter ended March 31, 1999 Compared To the Quarter ended March 31, 1998 Revenues. For the quarter ended March 31, 1999, revenues decreased by $671,000, or 11.3%, to $5.3 million from $5.9 million for the quarter ended March 31, 1998. Sales of IONSCAN(R)s and related products decreased by $1.0 million, or 16.8%, due to a decrease of 22.9% in the number of units sold, and a decline in average unit selling price of approximately 5.2%. The decrease in unit sales was due to significant IONSCAN(R) sales to the aviation security market, primarily to the FAA in the first quarter of last year. The decrease in average selling prices resulted primarily from increased competition, primarily in the drug interdiction market. The sale of IONSCAN(R) consumables, spares and service represented 25.1% of IONSCAN(R) revenues for the quarter ended March 31, 1999 as compared to 14.6% in the same quarter last year. The Company expects that, as the installed base of IONSCAN(R)s increases, these revenues will become increasingly significant to the Company. Sales of specialty instruments and other products increased by $318,000, or 1673%, to $337,000. The increase was attributable to sales made by DigiVision Inc., acquired May 1, 1998. Revenues derived from funded research and development decreased by approximately $7,000, or 10.4%, in the quarter ended March 31, 1999 as compared to the 1998 period. Funded research and development revenues decreased as a result of the Company concentrating most of its research and development staff on new products and new applications for existing products. Gross Profit. For the quarter ended March 31, 1999, gross profit decreased by $376,000, or 10.7%, to $3.1 million from $3.5 million in the 1998 period. As a percentage of revenues, gross profit increased slightly to 59.4% in the quarter ended March 31, 1999 from 59.1% in the 1998 period. The increase in the gross profit percentage was primarily attributable to reduced production costs resulting from larger, more efficient production runs of the IONSCAN(R) and related reductions in cost of materials due to higher volume purchases, offset, in part by lower average selling prices. The decrease in gross profit, however, was due to a 22.9% decrease in units sold as well as reduced average selling prices. Selling, General and Administrative. For the quarter ended March 31, 1999, selling, general and administrative expenses increased by approximately $470,000, or 27.7%, to $2.2 million from $1.7 million in the 1998 period. As a percentage of revenues, selling, general and administrative expenses increased to 41.0% in the 1999 period from 28.5% in the 1998 period. Selling and marketing expenses increased by approximately $351,000, primarily attributable to the addition of sales and service personnel and related costs, increased commission expense of approximately $125,000 over the same period last year and $123,000 attributable to the acquisition of DigiVision in May 1998. General and administrative expenses decreased by $75,000, offset by $194,000 of expenses attributable to the business development group formed in May 1998. Product Development. For the quarter ended March 31, 1999, product development expenses increased by $272,000, or 75.1%, to $634,000 from $362,000 in the 1998 period. As a percentage of revenues, product development expenses increased to 12.0% for the quarter ended March 31,1999 from 6.1% in the 1998 period as a result of a higher level of internally funded new product and applications development activity. Of the $272,000 increase, $128,000 was attributable to DigiVision, acquired in May 1998. Operating Income. For the quarter ended March 31, 1999, operating income decreased by $1.2 million, or 79.5%, to $298,000 from $1.5 million in the 1998 period. As a percentage of revenues, operating income decreased to 5.7% from 24.5% in the 1998 period. The decrease is due to the combination of factors noted above. Other Income and Expense. For the quarter ended March 31, 1999, other income increased by $366,000, or 269%, to $502,000 from $136,000 in the 1998 period. The increase was attributable to an increase in investment and other interest income of $335,000, or 223%, to $485,000 as compared to $150,000 in the same period in 1998, primarily as a result of the investment of a portion of the net proceeds from the Company's April 1998 public offering. Income Taxes. For the quarter ended March 31, 1999, the Company had a tax provision of $300,000, as compared to a net tax benefit of $200,000 in the 1998 period. At December 31, 1998, the Company had substantially eliminated its deferred tax valuation allowance and accordingly will be providing for taxes on its future income. Capital Resources and Liquidity Cash provided by operations was $514,000 in the three months ended March 31, 1999, as compared to $82,000 for the same period in 1998. Cash provided by operations in the three months ended March 31, 1999 resulted primarily from net income of $500,000, depreciation, amortization and changes in reserves of $510,000, partially offset by increases in inventory. Cash provided by operations in the three months ended March 31, 1998, resulted primarily from net income of $1.8 million, partially offset by decreases in accounts payable. Cash used in investing activities was $2.3 million in the three months ended March 31, 1999, and cash provided by investing activities was $1.7 million in the same period in 1998. Cash used in investing activities in the three months ended March 31, 1999 resulted from the purchase of $2.0 million of marketable securities and the purchase of $316,000 of equipment. Cash provided by investing activities in the three months ended March 31, 1998, resulted from the sale $2.0 million of marketable securities, partially offset by the purchase of equipment. Cash used in financing activities was $2.4 million in the three months ended March 31, 1999, and cash provided by financing activities was $105,000 in the same period in 1998. Cash used in financing activities in the three months ended March 31, 1999 resulted from the repurchase of $2.5 million of the Company's common stock pursuant to the Company's previously announced stock repurchase program, partially offset by the exercise of options and warrants and the partial repayment of a stockholder loan. Cash provided by financing activities in the three months ended March 31, 1998, resulted from the exercise of options and warrants. The Company's capital expenditures in the three months ended March 31, 1999 aggregated approximately $316,000. Such expenditures consisted primarily of leasehold improvements and equipment. The Company believes that it will require approximately $700,000 in additional capital investment in tooling, equipment, and facility improvements for the remainder of 1999. The Company has a $5.0 million unsecured credit facility with Fleet Bank, N.A. to be used for general working capital purposes, including the issuance of standby letters of credit. At March 31, 1999, $4.8 million was available under this Facility. At December 31, 1998, the Company had approximately $7.3 million of tax loss carryforwards to offset future taxable income in the U.S and $2.1 million of expenses available to offset future taxable income in Canada. As of March 31, 1999, the Company had cash and cash equivalents of $14.6 million and marketable securities of $17.6 million. The Company believes that its existing cash balances, marketable securities and income from operations in future periods will be sufficient to fund its working capital requirements for at least the next twelve months. The Company has a common stock repurchase program under which it is authorized to repurchase up to 1,000,000 shares of the Company's outstanding Common Stock. As of March 31, 1999, the Company had repurchased 592,500 shares at an aggregate cost of approximately $4.0 million. Inflation Inflation was not a material factor in either the sales or the operating expenses of the Company during the periods presented herein. Year 2000 Issue The year 2000 issue is the result of computer programs being written using two digits rather than four to define the applicable year. Certain computer programs may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices or engage in similar normal business activity. The Company has recently established a team to assess risk, identify and correct exposures when possible, and develop contingency plans for Year 2000 compliance issues. The Company has developed an assessment plan and timetable and anticipates completion of its assessment by June 30, 1999. To date, the committee has identified several areas of potential concern to the Company, most particularly the software and hardware used as part of its own information systems, the impact of Year 2000 problems on the operation of its products, both current and discontinued, the impact of Year 2000 issues on its vendors, the impact of Year 2000 issues as it affects the physical working environment in which the Company operates, the potential impact of Year 2000 problems on the markets that the Company sells into and finally, crisis planning. The Company is currently completing its review of the software and hardware systems used by the Company's information systems. The Company believes that with modifications to existing software and hardware and conversions to new software, its internal systems and hardware will be Year 2000 compliant . The Company has substantially completed a preliminary review of its IONSCAN(R) products and believes that Year 2000 issues will have no impact on the performance of its IONSCAN(R) product line as the IONSCAN(R)'s functionality is not dependent on date or time references. The Company has sold many custom, one of a kind products other than the IONSCAN(R) over the years. It will investigate Year 2000 issues related to such products only when requested to do so by the end user. However, based upon a preliminary review the Company believes that the functionality of those products is not dependent on date or time references. The Company has initiated formal communications with its significant suppliers, customers, and critical business partners to determine the extent to which the Company may be vulnerable in the event that those parties fail to properly remediate their own Year 2000 issues. The Company intends to take steps to monitor the progress made by those parties, and intends to monitor others with whom it does business as the Year 2000 approaches. The Company has reviewed the operating environment within which it functions to assess the Year 2000 risks relating to, among other things, its heating and air conditioning systems, security systems, communication systems and related hardware. The Company has determined that such systems are Year 2000 compliant. To the extent possible, it will also assess certain market risks to try and determine, the effects, if any, Year 2000 issues could have on its customers that would affect their ability to purchase and pay for the Company's products. Based on initial assessments, the Company does not believe that Year 2000 issues will significantly alter demand for the Company's products. The Company intends to develop a crisis plan to deal with certain critical Year 2000 "what if" situations should they arise. The Company currently expects that it will either shift supply orders to suppliers that can demonstrate Year 2000 compliance or will attempt to stockpile significant supplies of critical components as January 1, 2000 approaches. The Company believes, however, that due to the widespread nature of potential Year 2000 issues, the contingency planning process is an ongoing one which will require further modifications as the Company obtains additional information regarding the Company's state of preparedness and the status of third party Year 2000 readiness. The Company believes that the actions it has taken to date and steps it intends to take in the future will allow it to be Year 2000 compliant in a timely manner. There can be no assurances, however, that the Company's internal systems and products or those of third parties on which the Company relies will be Year 2000 compliant in a timely manner or that the Company's or third parties' contingency plans will mitigate the effects of any noncompliance. The failure to achieve Year 2000 compliance or to have appropriate contingency plans in place to deal with any noncompliance could result in a significant disruption of the Company's operations and could have a material adverse effect on the Company's financial condition or results of operations. Because the Company is still in the process of assessing its Year 2000 issues, the Company cannot estimate the cost of achieving Year 2000 compliance at this time. However, based on the preliminary assessments conducted to date, the Company does not believe that the costs of achieving such compliance will be material to its results of operations or financial condition. The costs of compliance and the dates on which the Company believes it will complete its Year 2000 modifications and risk assessments, are based on managements best estimates, based upon many different assumptions of future events and other factors. However, there can be no assurances that the Company's estimates will be achieved and actual results could differ from those anticipated. Disclosure Regarding Forward Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. When used in this Quarterly Report on Form 10-Q Report, the words "estimate," "project," "believe," "anticipate," "intend," "expect," "plan," predict," "may," "should," "will," the negative thereof and similar expressions are intended to identify forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, could differ materially from those set forth in or contemplated by the forward-looking statements contained herein. Important factors that could contribute to such differences include, but are not limited to, the development and growth of markets for the Company's products, the Company's dependence on and the effect of governmental regulations on demand for the Company's products, the impact of both foreign and domestic governmental budgeting decisions and the timing of governmental expenditures, the reliance of the Company on its IONSCAN(R) products, and the dependency of the Company on its ability to successfully develop and market new products applications, the effects of competition, and the effect of general economic and market conditions, as well as conditions prevailing in the markets for the Company's products. Certain of the factors summarized above are described in more detail in the Company's Registration Statement on Form SB-2 (File no. 333-33129) and reference is hereby made thereto for additional information with respect to the matters referenced above. Other factors may be described from time to time in the Company's other filings with the Securities and Exchange Commission, news releases and other communications. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements set forth above and contained elsewhere in this Quarterly Report onForm 10-Q. Part I - Item 3. Quantitative and Qualitative Disclosures About Market Risk. Not Applicable. BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 1. Legal Proceedings In August 1998, Ion Track Instruments, Inc. ("ITI") filed a civil action against the Company and one of its employees in the United States District Court for the District of Massachusetts (No. 98-11521-JLT). The action alleges that the Company and the employee made false and misleading statements about ITI's products in violation of the Lanham Act. In March 1999, the Court issued a preliminary injunction prohibiting the Company from making certain statements regarding ITI and its products pending the completion of discovery and the outcome of a trial on the merits as to whether such statements were false and misleading. However, the court denied ITI's other claims for preliminary injunctive relief pursuant to which ITI had sought to bar or, alternatively, restrict the employee's employment by the Company. The Company has denied the substantive allegations of this complaint and has filed a counterclaim seeking damages from ITI. Notwithstanding the imposition of the preliminary injunction, the Company believes that ITI's claims are without merit and intends to continue to vigorously defend the action. The Company does not expect that this action will materially adversely affect its consolidated financial position, results of operations or liquidity. ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits 3.1 The Company's Certificate of Incorporation of the Company, as amended (previously filed as Exhibit 3.1A to the Company's Registration Statement on Form SB-2 (File No. 333-33129) and incorporated herein by reference). 3.2 By-laws of the Company (previously filed as Exhibit 3.1 to the Company's Current Report on Form 8-K dated August 26, 1998 (File No. 0-3207) and incorporated herein by reference). 27 Financial Data Schedule. (b) Reports on Form 8-K None BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES 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. BARRINGER TECHNOLOGIES INC. (Registrant) /s/ Stanley S. Binder ________________________ Stanley S. Binder President, /s/ Richard S. Rosenfeld _________________________ Richard S. Rosenfeld, Chief Financial Officer (Principal Accounting Officer) Date: April 22 , 1999 BARRINGER TECHNOLOGIES INC. INDEX TO EXHIBITS Exhibit Number Page No. 27 Financial Data Schedule 16 EX-27 2 FDS --
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000010119 BARRINGER TECHNOLOGIES, INC. 1 U.S. 3-MOS DEC-31-1999 MAR-31-1999 1 14,632 17,562 6,089 365 5,152 47,242 4,549 2,073 50,917 3,598 0 0 92 79 22,945 50,917 5,277 5,277 2,140 2,839 (502) 0 0 800 300 500 0 0 0 500 0.06 0.06
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