-----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, WriAmGAUFW0B5qCeP8S3nhs6sCYDMOK9/4SWYMaB5DbZuoI6ASEWv66kuJ03pmmR y4Wo2YLZIib1ipy8eE9ULw== 0001019056-97-000012.txt : 19970222 0001019056-97-000012.hdr.sgml : 19970222 ACCESSION NUMBER: 0001019056-97-000012 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970220 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOONTON ELECTRONICS CORP CENTRAL INDEX KEY: 0000013191 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 221543137 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-02364 FILM NUMBER: 97539437 BUSINESS ADDRESS: STREET 1: 25 EASTMANS RD STREET 2: PO BOX 465 CITY: PARSIPPANY STATE: NJ ZIP: 07054-0465 BUSINESS PHONE: 2013869696 MAIL ADDRESS: STREET 1: 25 EASTMANS RD STREET 2: P O BOX 465 CITY: PARSIPPANY STATE: NJ ZIP: 07054-0465 10QSB 1 BOONTON ELECTRONICS CORP. FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 BOONTON ELECTRONICS CORPORATION State: New Jersey Identification No. 22-1543137 File No. 0-2364 Address: 25 Eastmans Road, P. O. Box 465, Parsippany, New Jersey 07054-0465 Telephone: 201-386-9696 "Indicate by check mark whether the Registrant (1) has file all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days." YES [X] NO ---- ---- Shares Outstanding: December 31, 1996 1,636,585 December 31, 1995 1,354,535 1 (Unaudited) BOONTON ELECTRONICS CORPORATION CONSOLIDATED BALANCE SHEETS ---------------------------
ASSETS DECEMBER 31, 1996 SEPTEMBER 30, 1996 ------ ----------------- ------------------ Current assets: Cash and cash equivalents $ 361,928 $ 113,041 Trade receivables 823,254 971,342 Inventories 1,296,089 1,210,940 Deferred tax benefits 81,058 81,058 Other current assets 263,281 230,340 ----------- ----------- Total current assets 2,825,610 2,606,721 ----------- ----------- Property and equipment-net 405,364 163,858 ----------- ----------- Other assets: Deferred tax benefit 988,651 988,651 Security deposits 69,071 67,768 ----------- ----------- Total other assets 1,057,722 1,056,419 ----------- ----------- Total assets $ 4,288,696 $ 3,826,998 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Note payable $ 39,467 $ 10,503 Related party loans 43,530 43,530 Accounts payable - trade 529,313 469,882 Other current liabilities 522,887 538,328 Unsecured claims payable (Chapter 11 settlement) current 48,491 48,491 ----------- ----------- Total current liabilities 1,183,688 1,110,734 Note payable - noncurrent 289,695 77,837 Related party loans - noncurrent 218,970 218,970 Unsecured claims payable (Chapter 11 settlement) - noncurrent 153,014 201,505 ----------- ----------- Total liabilities 1,845,367 1,609,046 ----------- ----------- Commitments and contingencies Stockholders' equity: Common stock 163,659 155,659 Capital in excess of par 4,613,638 4,421,637 Deficit (2,333,968) (2,359,344) ----------- ----------- Total stockholders' equity 2,443,329 2,217,952 ----------- ----------- Total liabilities and stockholders' equity $ 4,288,696 $ 3,826,998 =========== ===========
The accompanying footnotes are an integral part of these statements. 2 (Unaudited) BOONTON ELECTRONICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS -------------------------------------
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 DECEMBER 31, 1995 ----------------- ----------------- Net sales $1,811,075 $1,632,222 Cost of goods sold 987,295 829,056 ---------- ---------- Gross income 823,780 803,166 ---------- ---------- Operating expenses: Commissions 202,004 181,583 Research and development 190,061 204,073 Other operating expenses 389,824 327,126 ---------- ---------- Total operating expenses 781,889 712,782 ---------- ---------- Income from operations 41,891 90,384 ---------- ---------- Interest expense 9,367 5,144 Other expense 7,147 32,530 ---------- ---------- Total other expenses 16,514 37,674 ---------- ---------- Income before provision for income taxes 25,377 52,710 Provision for income taxes -- -- ---------- ---------- Net income 25,377 52,710 Stockholders' equity - beginning 2,217,952 2,667,537 Stock options exercised -- 13,547 Common stock sold 200,000 -- ---------- ---------- Stockholders' equity - ending $2,443,329 $2,733,794 ========== ========== Weighted average number of shares outstanding 1,576,585 1,348,473 ========== ========== Earnings per share $ 0.02 $ 0.04 ========== ==========
3 The accompanying footnotes are an integral part of these statements. (Unaudited) BOONTON ELECTRONICS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOW ------------------------------------
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 DECEMBER 31, 1995 ----------------- ----------------- Cash provided/(used) by operations: Net income $ 25,377 $ 52,710 Adjustments to reconcile net income: Depreciation & amortization 9,719 4,608 Other -- 11,633 Decrease/(increase) in current assets: Accounts receivable 148,088 (49,757) Inventories (85,149) (13,261) Other current assets (32,941) 165,357 Increase/(decrease) in current liabilities: Accounts payable 59,431 (37,333) Chapter 11 settlement - current (48,491) (101,515) Accrued liabilities (15,441) 25,654 --------- --------- Net cash provided by operations 60,593 58,096 --------- --------- Cash flows from investing activities: Purchase of equipment (251,225) (10,782) Other (1,303) -- --------- --------- Net cash (used) by investing activities (252,528) (10,782) --------- --------- Cash flows from financing activities: Increase notes payable 243,462 -- Payments on loans (2,640) (48,859) Proceeds from sale of stock 200,000 Proceeds from options exercised -- 13,547 --------- --------- Net cash provided/(used) by financing activities 440,822 (35,312) --------- --------- Increase/(decrease) in cash and cash equivalents 248,887 12,002 Cash and cash equivalents at beginning of period 113,041 146,568 --------- --------- Cash and cash equivalents at end of period $ 361,928 $ 158,570 ========= =========
The accompanying footnotes are an integral part of these statements. 4 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNT POLICIES AND DISCRIPTION OF BUSINESS: A. The Company is a New Jersey corporation organized in 1947. The Company designs and produces electronic testing and measuring instruments including power meters, voltmeters and modulation meters. Recent models are microprocessor controlled and are often used in computerized automatic testing systems. The Company's equipment is marketed throughout the world to commercial and government customers in the electronics industry. B. The Company markets and distributes its products throughout the United States and abroad through some 15 domestic sales representatives and 35 foreign distributors. Representatives sell on a commission basis, while distributors buy products for resale at discounted ex-factory prices. Its representatives and distributors also handle the products of other manufactures, although these are not generally competitive with the Company's products except that some items handled by foreign distributors may be somewhat competitive. C. The consolidated financial statements include the accounts of Boonton Electronics Corporation and its wholly-owned subsidiaries, Boonton International Sales Corporation and Integra, Inc. All material intercompany accounts and transactions have been eliminated in consolidation. The wholly-owned subsidiaries ceased operations effective October 1, 1994. D. Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. E. The company accounts for uncollectible accounts under the direct write-off method whereas generally accepted accounting principals require provision for such expenses under the allowance method. The effect of using this method approximates the allowance method as all amounts are deemed to be fully collectible. F. Inventories - stated at the lower of cost or market determined by the first-in, first-out (FIFO) method. G. Property and equipment - Depreciation and amortization is calculated by the straight-line method for financial reporting purposes at rates based on the following estimated useful lives: Building improvements 39 Machinery and equipment 5-10 Office furniture and fixtures 5-10 Transportation equipment 3 5 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 The accelerated cost recovery system and modified accelerated cost recovery system are used for income tax purposes. Cost of major renewals and betterments that extend the life of the property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expenses as incurred. H. Financial risk - The Company regularly maintains bank account balances in excess of FDIC insurable limit. I. Income Taxes - The Company adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" which requires a company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in a Company's financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement carrying amounts and tax basis of assets and liabilities using expected tax rates in effect in the years in which the differences are expected to reverse. The Company recognized the benefit of net operating loss carryforwards applying the valuation allowance which requires that the tax benefit be limited bases on the weight of available evidence and the probability that some portion of the deferred tax asset will be realized. J. Financial Instruments - The Company's financial instruments include cash, cash equivalents, trade receivables and payable, long-term debt and loans from related parties for which carrying amounts approximate fair value. It is not practicable to estimate the fair value of related party loans and long-term debt. NOTE 2 - PROCEEDINGS UNDER CHAPTER 11 AND GOING CONCERN PRESENTATION: The Company operated under Chapter 11 proceedings for the period September 7, 1993 through November 15, 1994 when, on the later date, an order confirming the Company's Plan of Reorganization was entered by the United States Bankruptcy Court, District of New Jersey, subject to the court closing the case 180 days after said entry (Local Rule 25(a)), cause for extension of time in closing case (Local Rule 25(b)), and filing of application for allowance of fees and allowance within 90 days after entry of final order confirming plan (Local Rule 25(c)). The settlement of unsecured claims under the confirmed Plan of Reorganization totaling 35% of allowed claims for accounts payable and accrued expenses which is reflected in the financial statements, provided for the following payments to be made subsequent to November 15, 1994: % -- 10 From after tax proceeds from termination of the company's pension plan 5 One year after initial payout 5 Two years after initial payout 15 Three years after initial payout 6 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 Pre-petition liabilities in accordance with the November 15, 1994 confirmed plan of reorganization were compromised of the following: Accounts payable $ 702,233 Accrued expenses: Commissions payable 126,370 Vacation pay 96,250 Severance pay 25,108 Other 78,282 ------------ Total September 30, 1994 1,028,243 Court authorized payments/adjustments (75,073) ------------ Balance subject to settlement 953,170 Amount discharged to date 751,665 ------------ Balance of Chapter 11 settlement - December 31, 1996 $ 201,505 ============ NOTE 3 - INVENTORIES DECEMBER 31, SEPTEMBER 30, 1996 1996 ----------- ------------ Raw material $ 624,666 $ 468,619 Work in process 616,302 688,273 Finished Goods 55,121 54,048 ---------- ---------- Total $1,296,089 $1,210,940 ========== ========== NOTE 4 - PROPERTY, PLANT AND EQUIPMENT: DECEMBER 31, SEPTEMBER 30, 1996 1996 ----------- ------------ Leasehold improvements $ 61,054 $ 61,054 Machinery and equipment 1,714,120 1,512,488 Office furniture and fixtures 494,552 444,959 Transportation equipment 13,188 13,188 ---------- ---------- Total 2,282,914 2,031,689 Less: Accumulated depreciation and amortization 1,877,550 1,867,831 ---------- ---------- Net depreciated cost $ 405,364 $ 163,858 ========== ========== Management has removed $1,868,423 of fully depreciated machinery, equipment and office furniture and fixtures disposed of and/or abandoned during the relocation of the Company's operations to the Township of Hanover. 7 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 NOTE 5 - RESULTS OF OPERATIONS: The Company has incurred losses from operations during the last three fiscal years. Management does not expect this to continue based on its operating plan for fiscal 1997 which anticipates a 19% increase in revenue and a net income of approximately $200,000. The 1997 first quarter revenues were approximately $1.8 million which supports, on an annualized basis, the expected increase in revenues. The military contracts awarded in fiscal 1996, which will total $1.7 million in revenues upon completion, contributed approximately $265,000 to the first quarter 1997 revenues. The Company's backlog as of December 31, 1996 was $1,296,718 which included an additional $546,000 for the military contracts. An additional $299,000 was released by the Air Force in November 1996 against these contracts. NOTE 6 - NOTES PAYABLE:
DECEMBER 31, SEPTEMBER 30, 1996 1996 ----------- ------------- A. Board of Directors: Notes, subordinated to NJEDA loan, dated February 6, 1995, payable in monthly installments of $5,449 including interest at 9% per annum through September 30, 2001: $ 262,500 $ 262,500 Less current portion 43,530 43,530 ----------- ----------- Noncurrent portion $ 218,970 $ 218,970 =========== =========== B. New Jersey Economic Development Authority: Note, dated July 31, 1996, payable in monthly installments of $4,803 including interest at 6.75% per annum through June 30, 2003: $ 329,162 $ 88,340 Less current portion 39,467 10,503 ----------- ----------- Noncurrent portion $ 289,695 $ 77,837 =========== ===========
8 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 NOTE 7 - CONCENTRATION OF CREDIT RISK: The Company maintains cash and cash equivalents at three financial institutions that are insured by the Federal Deposit Insurance Corporation (FDIC) and/or Securities Investor Protection Corporation (SIPC). The Company at times during the year had amounts in these institutions that exceeded insurable limits of $100,000 FDIC and $500,000 SIPC. In the normal course of business, the Company extends unsecured credit to customers in the United States and Asia. NOTE 8 - COMMITMENTS AND CONTINGENCIES: COMMITMENTS: - ----------- A. RETIREMENT PLAN: Effective July 1, 1989, the Company adopted a defined contribution plan for all eligible employees. In accordance with Internal Revenue Code Section 401(k), the plan provides for elective deferral of up to 15% of total compensation. The plan further provided for a Company matching contribution of 25% of the elective deferral amount of each participant that did not exceed 6% of total compensation. Effective January 1, 1994, the matching Company contribution was suspended due to the company's financial condition and pending reorganization. Effective October 1, 1995, the Company reinstated a matching contribution at 50% of the elective deferral amount for each participant that does not exceed 6% of total compensation. The amounts charged to operations were $46,151 and $0 for the years ended September 30, 1996 and 1995, respectively. B. EMPLOYEE STOCK OPTIONS PLANS: On February 26, 1987, the Stockholders approved the 1987 Incentive Stock Option Plan, the 1987 Employee Stock Purchase Plan and the 1987 Stock Option Program for Non-Employee Directors. Subject to the provisions of these plans, an aggregate of 150,000 shares of the Company's stock was made available for option purchases; namely, 75,000 shares, 37, 500 shares and 37,500 shares, respectively. The number of shares available for future grants at September 30, 1995 were 11,700, 11,900 and 7,500, respectively. The number of shares available for future grants at September 30, 1996 were 11,700, 12,150 and 7,500, respectively.
OPTION ------ PRICE PER SHARE NUMBER OF SHARES --------------- ---------------- Shares under option at September 30, 1993 $ 3.00 53,500 Expired 3.00 (3,500) -------- Shares under option at September 30, 1994 3.00 50,000 Granted $ 1.0625 130,000
9 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996
OPTION ------ PRICE PER SHARE NUMBER OF SHARES --------------- ---------------- Exercised $ 1.0625 (30,000) Expired $ 1.0625 (18,750) Expired/surrender $ 3.00 (50,000) -------- Shares under option at September 30, 1995 $ 1.0625 81,250 Exercised $ 1.0625 (34,500) Expired $ 1.0625 (250) -------- Shares under option at September 30, 1996 $ 1.0625 46,500 ========
C. LEASE COMMITMENTS Subsequent to the sale of the Company's facility in Randolph, New Jersey on September 28, 1994, the company entered into a seven year lease for its present office and manufacturing facility in Hanover Township, New Jersey with a five year renewal option. Rent charged to operations for the fiscal year ended September 30, 1996 was $227,400. Annual rent for the initial seven year term is $227,400 for the first four years and $300,00 for years five through seven. Future minimum lease payments required under the operating lease are as follows: FISCAL YEAR AMOUNT ----------- ------ 1997 227,400 1998 227,400 1999 300,000 2000 300,000 2001 300,000 The Company leases office equipment under a five-year operating lease with an option to upgrade after three years which it intends to exercise. The annual lease payment for the term of the lease is $17,617. Future lease payments required under the operating lease are as follows: FISCAL YEAR AMOUNT ----------- ------ 1997 17,617 1998 17,617 1999 17,617 2000 17,617 2001 1,468 10 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 CONTINGENCIES: - ------------- A. ENVIRONMENTAL CONTINGENCIES: Following an investigation by the New Jersey Department of Environmental Protection (NJDEP) of the Company's waste disposal practices at a certain site that it formerly leased, the Company put a ground water management plan into effect as approved by the NJDEP. Costs associated with this site are charged directly to income as incurred. The lessor of this site has notified the Company that if the NJDEP investigation proves to have interfered with a sale of the property, the lessor may seek to hold the Company liable for any loss it suffers as a result. However, corporate counsel has informed management that, in their opinion, the lessor would not prevail in any lawsuit filed due to the imposition by law of the statute of limitations. Cost charged to operations in connection with the water management plan amounted to $51,879 and $60,409 for the years ended September 30, 1996 and 1995, respectively. The Company estimates the expenditures in this regard for the fiscal year ending September 30, 1997 will amount to approximately $52,000. The Company will continue to be liable under the plan in all future years until such time as the NJDEP releases it from all obligations applicable thereto. B. INCOME TAX CONTINGENCIES: The Company's income tax returns through the fiscal year ended September 30, 1992 have been accepted as filed or are barred from further assessment. NOTE 9 - COMMON STOCK:
DECEMBER 31, SEPTEMBER 30, 1996 1996 ---- ---- Common Stock: $.10 par value, authorized 5,000,000 shares, issued and outstanding 1,636,585 shares and issued 1,556,585 shares. $163,659 $155,659 ======== ========
On December 9, 1996, G.E.M. USA, Inc. purchased 80,000 shares of the Company's common stock for $200,000 at two dollars and fifty cents ($2.50) a share U.S. These shares were purchased in accordance with the terms of a definitive Stock Purchase Agreement executed by and between the Company and GMME on October 21, 1996. The Agreement provides an option to GMME to purchase an additional 443,700 shares for $1,437,588 at three dollars and twenty-four cents ($3.24) a share U.S. This option will expire on June 9, 1997 and is conditioned upon the satisfactory completion of further delineation of the environmental issue at a site formerly leased by the Company as disclosed in Note 8 - Contingencies (A). 11 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 NOTE 10 - INCOME TAXES: The components of the deferred tax asset are: DECEMBER 31, SEPTEMBER 30, 1996 1996 ---- ---- Net operating loss carryforwards $3,799,877 $3,799,877 Less: Valuation allowance (2,730,168) (2,730,168) ---------- ---------- Net deferred tax asset $1,069,709 $1,069,709 ========= ========= Financial Accounting Standards Board Statement No. 109, "Accounting for Income Taxes", requires that the Company record a valuation allowance when it is "more likely than not that some portion or all of the deferred tax assets will not be realized". It further states that "forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years". The ultimate realization of this deferred income tax asset depends on the ability to generate sufficient taxable income in the future. The Company is undergoing substantial restructuring changes and has made strategic realignments of its operations in association with its Plan or Reorganization that management believes will result in future profitability. While it is management's belief that these measures will allow the total deferred income tax asset to be realized by future operating results, the losses in recent years and a desire to be conservative make it appropriate to record a valuation allowance. Accordingly, the Company has provided a valuation allowance (based on estimated future taxable income) for the portion of the total deferred income tax asset that will not be realized as related to the operating loss carryforward. Income tax laws allow for the utilization of loss carryforwards over periods not to exceed 15 and 7 years for Federal and State purposes, respectively. If the Company is not able to generate sufficient taxable income in the future through operating results, increases in the valuation allowance will be required through a charge to expense (reducing stockholder's equity). In the event the Company reports sufficient profitability to use all of the deferred income tax assets, the valuation allowance will be eliminated through a credit to expense (increasing stockholder's equity). The following is a reconciliation of income taxes at the federal statutory rate: December 31, 1996 1995 ---- ---- Computed income taxes at statutory rate $ 8,628 $ 17,921 Recognition of net operating loss (8,628) (17,921) --------- --------- Expense (Benefit) $ - $ - ========= ========= 12 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 For federal tax purposes, the Company's subsidiary, Boonton International Sales Corporation, elected to be treated as a Domestic International Sales Corporation (DISC) under Section 992(b) of the Internal Revenue Code. The Company is entitled to defer federal taxes on the income of the DISC which amounted to $223,449 for 1994. This subsidiary ceased operations effective October 1, 1994. Cumulative undistributed earnings of the DISC subsequent to December 31, 1984 was $1,023,055. The Company does not recognize the deferred income taxes since there is no intention to distribute the DISC income. The Company has net operating loss carryforwards for federal and state purposes approximating $9,478,000 and $9,647,000 that will not begin to expire until the year 2006 and 1998, respectively. These loss carryforwards can be utilized to reduce future taxable income dollar for dollar. NOTE 11 - SEGMENT INFORMATION: The Company is engaged in the manufacture and sale of electronic test and measurement equipment and management considers its business as a single segment for reporting purposes. A. The Company's export sales were as follows: THREE MONTHS ENDED % OF DECEMBER 31, AMOUNT TOTAL SALES ------------ ---------- ----------- 1996 $ 676,740 37% 1995 $785,332 48% B. Customers sales to domestic government agencies were as follows: THREE MONTHS ENDED % OF DECEMBER 31, AMOUNT TOTAL SALES ------------ ---------- ----------- 1996 $ 383,080 21% 1995 $ 90,983 6% 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF INCOME STATEMENTS --------------------------------------------------------- THREE MONTHS ENDED DECEMBER 31, 1996 ------------------------------------ Sales for the three months ended December 31, 1996 were $178,853 above the prior year. The increase in sales was primarily due to an increase in military contract revenues of $292,097 coupled with a decline in export revenues of $108,592. Gross income increased by $20,614 above the prior year, but decreased to 46% of sales versus a prior year's 49% of sales. The decline in gross profit as a percentage of sales was attributable to the increased military revenues which traditionally carry a lower gross margin. Commission expense increased by $20,614 over the prior year due to the increase in sales volume. All other operating cost categories increased in total by $48,686. Operating income of $41,891 was a $48,493 decrease from the prior year. Net income of $25,377 was $27,333 lower than the prior's year's net income of $52,710. The earnings per share was $0.02 versus a prior year's earnings of $0.04. The December 31, 1996 inventory balance was $1,296,089 which was an $85,149 increase from the September 30, 1996 balance of $1,210,940. The increase in inventories was in raw materials purchased predominantly for the significant military orders in the Company's backlog. Trade receivable balances were $823,254 as compared to $971,342 as of September 30, 1996. The current ratio as of December 31, 1996 increased to 2.4 from 2.3 at September 30, 1996. This increase was primarily due to the increase in cash due to the $200,000 paid by GMME. REPORTS ON FORM 8-K: - -------------------- During the three months ended December 31, 1996, a report on Form 8-K was filed, on December 9, 1996 which reported information for "Item 5. Other Events". 14 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. BOONTON ELECTRONICS CORPORATION By /s/ Ronald T. DeBlis --------------------------------------------- Ronald T. DeBlis, President and Chief Executive Officer Date: February 18, 1997 By /s/ John E. Titterton --------------------------------------------- John E. Titterton, Vice President Finance, Secretary/Treasurer Date: February 18, 1997 February 18, 1997 15 BOONTON ELECTRONICS CORPORATION INDEX TO EXHIBIT FILED IN THE QUARTERLY REPORT ON FORM 10-QSB FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 Exhibit No. Page - ----------- ---- 27 Financial Data Sheet 17 16 EX-27 2 FDS FOR 10QSB
5 (Page 17) 0000013191 Boonton Electronics 1 3-MOS SEP-30-1997 OCT-01-1996 DEC-31-1996 361,928 0 823,254 0 1,296,089 2,825,610 2,282,914 1,877,550 4,288,696 1,183,688 0 0 0 163,659 2,279,670 4,288,696 1,811,075 1,811,075 987,295 781,889 7,147 0 9,367 25,377 0 25,377 0 0 0 25,377 .02 .02
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