-----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, GivgGDSJsd4rmjdW60zZEXYdJaVXBatTKjT/vzVL3irGB46mZZQEZEvHgsuSyBEo hOSnH8XzKOLZatg3VQEdcQ== /in/edgar/work/20000811/0000950110-00-000803/0000950110-00-000803.txt : 20000921 0000950110-00-000803.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950110-00-000803 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARRINGER TECHNOLOGIES INC CENTRAL INDEX KEY: 0000010119 STANDARD INDUSTRIAL CLASSIFICATION: [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: 692980 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 0001.txt FORM 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 June 30, 2000 ------------------ 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 August 3, 2000 - 6,986,502 shares BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES INDEX Page No. -------- Part I Financial Information Item 1. Financial Statements -- Consolidated Balance Sheets as of June 30, 2000 (unaudited) and December 31, 1999............................... 3 -- Consolidated Statements of Operations (unaudited) for the three months and six months ended June 30, 2000 and 1999........ 5 -- Consolidated Statement of Stockholders' Equity and Comprehensive Income for the six months ended June 30, 2000............................................................ 7 -- Consolidated Statements of Cash Flows (unaudited) for the three months and six months ended June 30, 2000 and 1999........ 8 -- Notes to Consolidated Financial Statements................... 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....................... 11 Item 3. Quantitative and Qualitative Disclosures About Market Risk .............................................. 14 Part II Other Information: Item 4. Submission of Matters to a Vote of Security Holders....... 15 Item 6. Exhibits and Reports on Form 8-K ......................... 15 Signatures........................................................... 16 Index to Exhibits.................................................... 17 -2- Part I. Financial Information Item 1. Financial Statements BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS JUNE 30, December 31, 2000 1999 ------------ ------------ (unaudited) Current assets: Cash and cash equivalents ................... $20,695,000 $26,933,000 Marketable securities ....................... 4,923,000 1,178,000 Accounts receivable, less allowances of $413,000 and $393,000 ...................... 10,802,000 7,397,000 Inventories ................................. 6,187,000 5,543,000 Prepaid expenses and other .................. 1,415,000 1,154,000 Deferred tax asset (note 2) ................. 2,107,000 2,677,000 ----------- ----------- Total current assets .................... 46,129,000 44,882,000 Property and equipment ....................... 2,588,000 2,309,000 Other assets ................................. 1,932,000 1,574,000 ----------- ----------- Total assets ............................ $50,649,000 $48,765,000 =========== =========== See notes to consolidated financial statements. -3- BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY JUNE 30, December 31, 2000 1999 ---------- ------------ Current liabilities: (unaudited) Accounts payable ......................................................... $ 1,807,000 $ 1,055,000 Accrued liabilities ...................................................... 982,000 228,000 Accrued payroll and related taxes ........................................ 1,138,000 1,122,000 Income taxes payable ..................................................... 398,000 19,000 Accrued commissions payable .............................................. 162,000 175,000 Unearned revenues ........................................................ 540,000 314,000 ----------- ----------- Total current liabilities ............................................. 5,027,000 2,913,000 Non-current liabilities ................................................... 831,000 599,000 ----------- ----------- Total liabilities .................................................... 5,858,000 3,512,000 ----------- ----------- 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, 35,000 shares outstanding less discount of $28,000 ........... 42,000 42,000 730,000 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, 7,865,000 shares issued; 7,055,000 and 7,773,000 outstanding, respectively ........................................... 79,000 79,000 Additional paid-in capital ............................................... 51,452,000 54,776,000 Accumulated deficit ...................................................... (734,000) (3,090,000) Cumulative comprehensive other income (loss) .............................. (922,000) (742,000) ----------- ----------- 49,962,000 51,110,000 Less: common stock in treasury at cost, 810,000 and 92,000 shares, respectively .................................................... (5,171,000) (5,857,000) ----------- ----------- Total stockholders' equity ............................................ 44,791,000 45,253,000 ----------- ----------- Total liabilities and stockholders' equity ................................ $50,649,000 $48,765,000 =========== ===========
See notes to consolidated financial statements. -4- BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, -------------------------- ---------------------------- 2000 1999 2000 1999 -------------- ----------- -------------- ----------- Revenues ......................................... $8,713 $ 5,427 $13,496 $10,319 Cost of revenues ................................. 4,187 2,297 6,578 4,313 ------ ------- ------- ------- Gross profit ............................. 4,526 3,130 6,918 6,006 ------ ------- ------- ------- Operating expenses: Selling, general and administrative ...... 1,730 1,600 3,351 3,274 Business development ..................... 102 151 213 345 Product development ...................... 316 296 607 799 ------ ------- ------- ------- 2,148 2,047 4,171 4,418 ------ ------- ------- ------- Operating income ................... 2,378 1,083 2,747 1,588 ------ ------- ------- ------- Other income (expense): Interest income .......................... 461 419 854 906 Other, net ............................... (32) 28 (25) 43 ------ ------- ------- ------- 429 447 829 949 ------ ------- ------- ------- Income from continuing operations before income tax provision ........ 2,807 1,530 3,576 2,537 Income tax provision ............................. 955 600 1,215 965 ------ ------- ------- ------- Income from continuing operations .. 1,852 930 2,361 1,572 Discontinued operation (note 4) Loss from operations, net of tax benefit of $146 and $210 ........... -- (202) -- (344) Loss on disposition, net of tax benefit of $555 and $555 ........... -- (909) -- (909 ------ ------- ------- ------- -- (1,111) -- (1,253) ------ ------- ------- ------- Net Income (loss) .................. 1,852 (181) 2,361 319 Preferred stock dividends ........................ (2) (2) (5) (5) ------ ------- ------- ------- Net income (loss) attributable to common stockholders ................ $1,850 $ (183) $ 2,356 $ 314 ====== ======= ======= =======
(Continued) -5- BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) (continued)
Three Months Ended Six Months Ended June 30, June 30, --------------------------- ---------------------------- 2000 1999 2000 1999 ------------ ------------ ------------- ------------- Basic earnings per common share (note 3) Continuing operations ........................... $0.25 $ 0.13 $0.33 $ 0.21 Discontinued operation -- loss from operations .. -- (0.03) -- (0.05) Discontinued operation -- loss on disposition ... -- (0.13) -- (0.12) ----- ------- ----- ------ $0.25 $(0.03) $0.33 $ 0.04 ===== ======= ===== ====== Diluted earnings per common share (note 3) Continuing operations ........................... $0.24 $ 0.12 $0.32 $ 0.20 Discontinued operation -- loss from operations .. -- (0.03) -- (0.04) Discontinued operation -- loss on disposition ... -- (0.12) -- (0.12) ----- ------- ----- ------ $0.24 $(0.03) $0.32 $ 0.04 ===== ======= ===== ====== Weighted average common and common equivalent shares outstanding: Basic ........................................... 7,302 7,119 7,197 7,414 ===== ===== ===== ===== Diluted ......................................... 7,578 7,673 7,404 8,038 ===== ===== ===== =====
See notes to consolidated financial statements. -6- BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
Class A Preferred Class B Preferred Common Stock Stock Stock ---------------------- --------------------- --------------------- Total Equity Shares Amount Shares Amount Shares Amount -------------- ---------- ----------- ---------- ---------- --------- ---------- Balance - January 1, 2000 .......... $ 45,253 7,865 $79 35 $42 23 $45 Net income ....................... 2,361 Translation adjustment ........... (180) Comprehensive Income ........... Exercise of stock options and warrants ....................... 761 Repurchase of common stock ....... (3,399) Dividend on preferred stock ...... (5) -------- ----- --- -- --- -- --- Balance - June 30, 2000 ............ $ 44,791 7,865 $79 35 $42 23 $45 ======== ===== === == === == === Cumulative comprehen- sive other Paid-in income Treasury Comprehensive Capital* Deficit (loss) Stock Income ------------ ----------- ---------- ----------- ------------- Balance - January 1, 2000 .......... $ 54,776 $(3,090) $(742) $(5,857) Net income ....................... 2,361 $2,361 Translation adjustment (180) (126) ------ Comprehensive Income ........... $2,235 ====== Exercise of stock options and warrants ....................... (3,324) 4,085 Repurchase of common stock ....... (3,399) Dividend on preferred stock ...... (5) -------- ------- ----- ------- Balance - June 30, 2000 ............ $ 51,452 $ (734) $(922) $(5,171) ======== ======= ===== ======= - -------------
* At June 30, 2000, net of notes receivable of $1,922 from the sale of stock. See notes to consolidated financial statements. -7- BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, ------------------------ ------------------------ OPERATING ACTIVITIES 2000 1999 2000 1999 -------- -------- -------- -------- Net Income (loss) .................................................. $ 1,852 $ (181) $ 2,361 $ 319 Items not affecting cash: Depreciation and amortization ............................... 260 226 509 444 Deferred tax provision (benefit) ............................ 405 (100) 570 150 Inventory and accounts receivable reserves .................. 13 116 20 158 Loss from discontinued operation ............................ -- 1111 -- 1,253 Other ....................................................... (106) (17) (144) (52) Decrease in non-cash working capital balances - continuing operations .............................................. (1,923) (2,845) (2,216) (3,306) -------- -------- -------- -------- Cash provided by (used in) operating activities - continuing operations .......................... 501 (1,690) 1,100 (1,034) Net cash provided by discontinued operation ................. -- 339 -- 197 -------- -------- -------- -------- Cash provided by (used in) operating activities ............................................ 501 (1,351) 1,100 (837) -------- -------- -------- -------- INVESTING ACTIVITIES Purchase of equipment and other .................................... (595) (409) (950) (725) Sale (purchase) of marketable securities ........................... (3,248) 3,477 (3,745) 1,521 -------- -------- -------- -------- Cash provided by (used in) investing activities ............................................ (3,843) 3,068 (4,695) 796 -------- -------- -------- -------- FINANCING ACTIVITIES Warrant and option exercises ....................................... 689 12 761 40 Payment of dividends on preferred stock ............................ (5) (5) (5) (5) Payment of shareholder loan ........................................ -- -- -- 65 Acquisition of treasury stock ...................................... (3,257) (2,195) (3,399) (4,700) -------- -------- -------- -------- Cash used in financing activities ..................... (2,573) (2,188) (2,643) (4,600) -------- -------- -------- -------- Decrease in cash and cash equivalents .............................. (5,915) (471) (6,238) (4,641) Cash and cash equivalents at beginning of period ................... 26,610 14,632 26,933 18,802 -------- -------- -------- -------- Cash and cash equivalents at end of period ......................... $ 20,695 $ 14,161 $ 20,695 $ 14,161 ======== ======== ======== ======== CHANGES IN COMPONENTS OF NON-CASH WORKING CAPITAL BALANCES RELATED TO OPERATIONS Accounts receivable ................................................ $(3,362) $(2,038) $ (3,425) $ (1,270) Inventories ........................................................ 392 (1,625) (644) (2,866) Other current assets ............................................... (194) (47) (261) (324) Accounts payable and accrued liabilities ........................... 1,241 865 2,114 1,154 -------- -------- -------- -------- Decrease in non-cash working capital balances - continuing operations ................................ $ (1,923) $(2,845) $(2,216) $ (3,306) ======== ======== ======== ======== Cash paid during the period for income taxes ....................... $ 92 $ 25 $ 149 $ 236 ======== ======== ======== ========
See notes to consolidated financial statements. -8- 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 June 30, 2000 and the results of its operations and its cash flows for the three months and six months ended June 30, 2000 and 1999, 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, 1999. This report should be read in conjunction therewith. The results of operations for the three and six months ended June 30, 2000 are not necessarily indicative of the results to be expected for any other interim period or for the full year. Certain items in the 1999 consolidated financial statements have been reclassified to conform to the 2000 presentation. 2. At June 30, 2000, the gross deferred tax asset of $2,107,000 included approximately $445,000 and $1,662,000 related to the Company's Canadian and U.S. operations, respectively. The deferred tax liability of $313,000 is due to product development costs of the Company's U.S. operations. Based on historical results and estimated 2000 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. 3. Basic and diluted earnings per share from continuing operations for the three months and six months ended June 30, 2000 and 1999, respectively, have been computed as follows:
For the three months ended June 30, 2000 For the six months ended June 30, 2000 --------------------------------------------- --------------------------------------------- Per Per Income Shares Share Income Shares Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount --------------- ----------------- ----------- --------------- ----------------- ----------- Basic Earnings Per Share Income attributable to common stockholders from continuing operations 1,850 7,302 $0.25 2,356 7,197 $0.33 ===== ===== Effect of dilutive securities Warrants and options 255 186 Convertible preferred dividend requirements 2 21 5 21 ------ ----- ------- ----- Diluted Earnings Per Share Income attributable to common stockholders and assumed conversions from continuing operations $1,852 7,578 $0.24 $ 2,361 7,404 $0.32 ====== ===== ===== ======= ===== =====
-9-
For the three months ended June 30, 1999 For the six months ended June 30, 1999 -------------------------------------------- ------------------------------------------ Per Per Income Shares Share Income Shares Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ------------- ----------------- ----------- -------------- ------------- ------ Basic Earnings Per Share Income attributable to common stockholders from continuing operations 928 7,119 $0.13 1,567 7,414 $0.21 ===== ===== Effect of dilutive securities Warrants and options 534 604 Convertible preferred dividend requirements 2 20 5 20 ---- ----- ------ ----- Diluted Earnings Per Share Income attributable to common stockholders and assumed conversions from continuing operations $ 930 7,673 $0.12 $1,572 8,038 $0.20 ===== ===== ===== ====== ===== =====
4. On April 30, 1998, the Company acquired all of the outstanding capital stock of DigiVision, Inc. ("DigiVision"), a San Diego-based developer of video enhancement products, in a business combination accounted for as a purchase. Effective June 30, 1999, the Company determined that it would dispose of DigiVision and, on December 15, 1999, sold all of the outstanding capital stock of DigiVision to a group comprised of DigiVision senior management. Accordingly, the financial results of DigiVision have been accounted for as a discontinued operation and reported as an operation sold. The selling price consisted of a $500,000 interest bearing note which, if not paid by December 31, 2000, will increase to $1,000,000. In addition, the Company will be entitled to receive an earn-out based upon annual revenues in excess of $2,000,000. The Company will recognize income on the note receivable and the earn-out when collectibility is reasonably assured. The Company received income from the note receivable in the amount of approximately $20,000 during the three months ended June 30, 2000. For the six months ended June 30, 1999, DigiVision's revenues were $352,000 and its net operating loss was $554,000. 5. On January 19, 2000, the Company granted options to acquire 37,500 shares of the Company's Common Stock to 10 employees at an exercise price of $5.75. These options were issued under the Company's 1997 Stock Compensation Program. On February 21, 2000, the Company granted options to the Company's executive officers and directors to acquire 465,000 shares of the Company's Common Stock at $5.03 per share. These options are exercisable on November 21, 2006 and expire on February 21, 2007. However, they can be exercised as to 25% at an earlier time if and when the Company's Common Stock trades for $8.50 or higher for at least 30 consecutive days; as to 50% if and when the Company's Common Stock trades for $11.00 or higher for at least 30 consecutive days; as to 75% if and when the Company's Common Stock trades for $12.50 or higher for at least 30 consecutive days; and as to 100% if and when the Company's Common Stock trades for $15.00 or higher for at least 30 consecutive days. These options were issued under the Company's 1997 Stock Compensation Program. 6) The Company has a common stock repurchase program under which it is authorized to repurchase up to 2,000,000 shares of the Company's outstanding Common Stock. As of June 30, 2000, the Company had repurchased 1,609,650 shares at an aggregate cost of approximately $10.3 million. -10- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table sets forth certain income and expense items from continuing operations from the Company's consolidated statements of operations expressed as a percentage of revenues from continuing operations for the periods indicated.
PERCENTAGE OF REVENUES THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ---------------- --------------- 2000 1999 2000 1999 ---- ---- ---- ---- STATEMENT OF OPERATIONS DATA: Revenues........................................... 100.0 100.0 100.0 100.0 Cost of revenues................................... 48.1 42.3 48.7 41.8 ------ ------ ----- ----- Gross profit....................................... 51.9 57.7 51.3 58.2 Selling, general and administrative expenses 19.9 29.5 24.8 31.7 Business development............................... 1.1 2.8 1.6 3.4 Product development................................ 3.6 5.4 4.5 7.7 ------ ------ ----- ----- Operating income .................................. 27.3 20.0 20.4 15.4 Other income, net.................................. 5.0 8.2 6.1 9.2 Income tax provisiont ............................. (11.0) (11.1) (9.0) (9.4) ------ ------ ----- ----- Income from continuing operations ................. 21.3 17.1 17.5 15.2 Preferred stock dividend .......................... * * * * ------ ------ ----- ----- Income attributable to common Stockholders from continuing operations......... 21.3 17.1 17.5 15.2 ====== ====== ===== =====
- ----------- * LESS THAN 0.1% COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2000 TO THE THREE MONTHS ENDED JUNE 30, 1999 Revenues. For the quarter ended June 30, 2000, revenues increased by $3.3 million, or 60.5%, to $8.7 million from $5.4 million for the quarter ended June 30, 1999. Revenues increased due to the shipment of $4.2 million to the Government of Israel pursuant to a $6.1 million order received in November 1999 and sales of the SABRE. Consumables, spares, service and other revenues represented 37.4% of revenues for the quarter ended June 30, 2000 as compared to 24.5% in the same quarter last year primarily as a result of the Israeli contract. Gross Profit. For the quarter ended June 30, 2000, gross profit increased by $1.4 million, or 44.6%, to $4.5 million from $3.1 million in the 1999 period. As a percentage of revenues, gross profit decreased to 51.9% in the quarter ended June 30, 2000 from 57.7% in the 1999 period. The decrease in gross profit percentage was attributable to a large percentage of purchased parts and services used in connection with the Israeli sale and an expansion of the product service department ahead of anticipated revenues. Selling, General and Administrative. For the quarter ended June 30, 2000, selling, general and administrative expenses increased by approximately $130,000, or 8.1%, to $1.7 million from $600,000 in the 1999 period. As a percentage of revenues, selling, general and administrative expenses decreased to 19.9% in the 2000 period from 29.5% in the 1999 period primarily the result of the higher revenues in 2000. Selling and marketing expenses increased by approximately $217,000, primarily due to increased commission expense and personnel costs. General and administrative expenses decreased by $87,000, primarily due to decreased payroll costs. Business Development. For the quarter ended June 30, 2000, business development expenses decreased by $49,000, or 32.5% to $102,000 from $151,000 in the 1999 period. The decrease was the result of lower payroll expenses. -11- Product Development. For the quarter ended June 30, 2000, product development expenses increased by $20,000, or 6.8%, to $316,000 from $296,000 in the 1999 period. As a percentage of revenues, product development expenses decreased to 3.6% for the quarter ended June 30, 2000 from 5.5% in the 1999 period primarily the result of the higher total revenues in the 2000 period. During the period approximately $84,000 of development expense relating to new products utilizing our existing technology was deferred. Operating Income. For the quarter ended June 30, 2000, operating income increased by $1.3 million, or 120%, to $2.4 million from $1.1 million in the 1999 period. As a percentage of revenues, operating income increased to 27.3% from 20.0% in the 1999 period. The increase was due to the combination of factors noted above. Other Income and Expense. For the quarter ended June 30, 2000, other income decreased by $18,000, or 4.0%, to $429,000 from $447,000 in the 1999 period. The decrease was attributable to an increase in foreign exchange losses, partially offset by increased investment income. Income Taxes. For the quarter ended June 30, 2000, the Company had a tax provision of $955,000, as compared to $600,000 in the 1999 period. The Company used an effective tax rate of approximately 34% as compared to 39% for the same period in 1999 due to the utilization of various tax planning strategies. COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2000 TO THE SIX MONTHS ENDED JUNE 30, 1999 Revenues. For the six months ended June 30, 2000, revenues increased by $3.2 million, or 30.8%, to $13.5 million from $10.3 million for the six months ended June 30, 1999. Revenues increased due to the shipment of $4.2 million to the Government of Israel pursuant to a $6.1 million order received in November 1999 and sales of the SABRE. Consumables, spares, service and other revenues represented 43.4% of revenues for the six months ended June 30, 2000 as compared to 24.8% in the same period last year primarily as a result of the Israeli contract. Gross Profit. For the six months ended June 30, 2000, gross profit increased by $912,000, or 15.2%, to $6.9 million from $6.0 million in the 1999 period. As a percentage of revenues, gross profit decreased to 51.3% in the period ended June 30, 2000 from 58.2% in the 1999 period. The decrease in gross profit percentage was attributable to a large percentage of purchased parts and services used in connection with the Israeli sale and an expansion of the product service department ahead of anticipated revenues. Selling, General and Administrative. For the six months ended June 30, 2000, selling, general and administrative expenses increased by approximately $77,000, or 2.4%, to $3.4 million from $3.3 million in the first half of 1999. As a percentage of revenues, selling, general and administrative expenses decreased to 24.8% in the 2000 period from 31.7% in the 1999 period primarily as a result of higher revenues in 2000 . Selling and marketing expenses increased by approximately $37,000 and general and administrative expenses increased by $40,000. Business Development. For the six months ended June 30, 2000, business development expenses decreased by $132,000, or 38.3% to $213,000 from $345,000 in the 1999 period. The decrease was the result of lower payroll expenses. Product Development. For the six months ended June 30, 2000, product development expenses decreased by $192,000, or 24.0%, to $607,000 from $799,000 in the 1999 period. As a percentage of revenues, product development expenses decreased to 4.5% for the period ended June 30, 2000 from 7.7% in the 1999 period. During the period approximately $155,000 of development expense relating to new products utilizing our existing technology was deferred. Operating Income. For the six months ended June 30, 2000, operating income increased by $1.2 million, or 73.0%, to $2.8 million from $1.6 million in the 1999 period. As a percentage of revenues, operating income increased to 20.4% from 15.4% in the 1999 period. The increase was due to the combination of factors noted above. Other Income and Expense. For the six months ended June 30, 2000, other income decreased by $120,000, or 12.6%, to $829,000 from $949,000 in the 1999 period. The decrease was attributable to a decrease in investment and other interest income and an increase in foreign exchange losses. -12- Income Taxes. For the six months ended June 30, 2000, the Company had a tax provision of $1.2 million, as compared to $1.0 million in the 1999 period. The Company used an effective tax rate of approximately 34% as compared to 38% for the same period in 1999 due to the utilization of various tax planning strategies. CAPITAL RESOURCES AND LIQUIDITY Cash provided by operations was $1.1 million in the six months ended June 30, 2000, as compared to cash used in operations of $837,000, for the same period in 1999. Cash provided by operations in the six months ended June 30, 2000 resulted primarily from net income of $2.4 million, depreciation, amortization and changes in reserves of $1.1 million, partially offset by net increases in working capital items. Cash used in operations in the six months ended June 30, 1999, resulted primarily from net increases in working capital items, partially offset by net income of $319,000, depreciation, amortization and changes in reserves of $752,000 and the loss on discontinued operations. Cash used in investing activities was $4.7 million in the six months ended June 30, 2000, as compared to cash provided by investing activities of $796,000 million in the same period in 1999. Cash used in investing activities in the six months ended June 30, 2000 resulted from the purchase of $3.8 million of marketable securities and the purchase of $950,000 of equipment. Cash provided by investing activities in the six months ended June 30, 1999, resulted from the sale of $1.5 million of marketable securities, partially offset by the purchase of $725,000 of equipment. Cash used in financing activities was $2.6 million in the six months ended June 30, 2000, and $4.6 million in the same period in 1999. Cash used in financing activities in the six months ended June 30, 2000 resulted from the repurchase of common stock, partially offset by the exercise of options and warrants. Cash used in financing activities in the six months ended June 30, 1999 resulted primarily from the repurchase of common stock, partially offset by the exercise of options and warrants and partial repayment of a loan from employee. The Company's capital expenditures in the six months ended June 30, 2000 aggregated approximately $950,000. Such expenditures consisted primarily of tooling, equipment and computers. The Company believes that it will require approximately $500,000 in additional capital investment in tooling, equipment, and facility improvements for the remainder of 2000. 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 June, 2000, $1.4 million in standby letters of credit were issued and outstanding and $3.6 million was available under this Facility. At December 31, 1999, the Company had approximately $5.8 million of tax loss carryforwards to offset future taxable income in the U.S and $3.7 million of expenses available to offset future taxable income in Canada. As of June 30, 2000, the Company had cash and cash equivalents of $20.7 million and marketable securities of $4.9 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 2,000,000 shares of the Company's outstanding Common Stock. As of June 30, 2000, the Company had repurchased 1,609,650 shares at an aggregate cost of approximately $10.3 million. INFLATION Inflation was not a material factor in either the sales or the operating expenses of the Company during the periods presented herein. -13- 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 on Form 10-Q. Item 3. Quantitative and Qualitative Disclosures About Market Risk. The Company's exposure to interest rate risk relates primarily to its investment portfolio. The primary objective of the Company's investment policy is to preserve principal while maximizing yields. The Company's investment portfolio consists of cash and cash equivalents and marketable securities consisting of a diverse mix of high credit quality securities, including U.S. government agency and corporate obligations, certificates of deposit and money market funds. The Company's portfolio has a weighted average maturity of 0.23 years, therefore changes in interest rate will not materially impact the Company's consolidated financial condition. However, such interest rate changes can cause fluctuations in the Company's results of operations and cash flows. The Company's $5 million unsecured credit facility has an interest rate based on the prime rate or LIBOR, at the Company's option. The Company currently has no borrowings outstanding under the unsecured credit facility. If the Company should draw down on the unsecured credit facility, interest rate fluctuations could have an impact on the Company's results of operations and cashflows. The Company's exposure to foreign currency exchange rate fluctuations is the result of operating throughout the world. The Company has several foreign subsidiaries whose financial statements are recorded in currencies other than U.S. dollars. As these foreign currency financial statements are translated at the end of each reporting period during consolidation, fluctuations in exchange rates between the foreign currency and the U.S. dollar increase or decrease the value of those investments. These fluctuations are recorded as a component of accumulated comprehensive income within stockholders' equity. In addition, from time to time, the Company enters into sales transactions in currencies other than U.S. dollars. Accordingly, the Company may be impacted by changes in the exchange rate between the time the sale is recorded and the time the trade receivable is collected. Where appropriate, the Company may from time to time hedge these transactions against foreign currency fluctuations. During 1999, the Company did not engage in any hedging transactions. The impact of foreign exchange transactions is reflected in the statement of operations and has not been material. -14- BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES Part II - Other Information ITEM 4. Submission of Matters to a Vote of Security Holders (a) The 2000 Annual Meeting of Stockholders of the Company was held on June 6, 2000. (b) - (c) - The matters voted on at the Annual Meeting of Stockholders and the results of such voting were as follows: 1) Election of Directors Nominee For Withheld ------- --------- -------- Stanley S. Binder 4,104,714 0 John H. Davies 4,104,714 0 John J. Harte 4,104,714 0 Richard D. Condon 4,104,714 0 John D. Abernathy 4,104,714 0 James C. McGrath 4,104,714 0 Lorraine M. Lavet 4,104,714 0 Kenneth S. Wood 4,104,714 0 2) Ratification of appointment of BDO Seidman, LLP as independent auditors of the Company's 1998 financial statements FOR: 4,200,953: AGAINST: 24,464; ABSTAIN: 4,067 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 is (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 -15- 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 Chairman /S/ RICHARD S. ROSENFELD ------------------------ Richard S. Rosenfeld, Chief Financial Officer (Principal Accounting Officer) Date: August 3, 2000 -16- BARRINGER TECHNOLOGIES INC. INDEX TO EXHIBITS Exhibit Number Page No. 27.1 Financial Data Schedule 18 -17- EX-27 2 0002.txt ART 5 FDS FOR 2ND QUARTER 10-Q
5 This schedule contains summary financial information extracted from Barringer Technologies Inc.'s Quarterly Report on Form 10-Q for the period ending June 30, 2000 and is qualified in its entirety by reference to such financial statements. 1000 6-MOS DEC-31-2000 JUN-30-2000 20695 4923 11215 413 6187 46129 5782 3194 50649 5027 0 0 87 79 44625 50649 13496 13496 6578 4171 (829) 0 0 3576 1215 2361 0 0 0 2361 0.33 0.32
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