-----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, PczndQCUF1M+UEhmILsdAHR9SBEpBvC24R0SEYDL+X/eckjblsIuM3Qlz+qkpQo4 VQxmguBCUIgaX69tz63mSw== 0001019056-99-000500.txt : 19990824 0001019056-99-000500.hdr.sgml : 19990824 ACCESSION NUMBER: 0001019056-99-000500 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990823 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/A SEC ACT: SEC FILE NUMBER: 000-02364 FILM NUMBER: 99697528 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/A 1 FORM 10-QSB/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB/A Amendment No. 1 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE NINE MONTHS ENDED JUNE 30, 1999 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: 973-386-9696 Address: 25 Eastmans Road, P.O. Box 465, Parsippany, New Jersey 07054-0465 Telephone: 973-386-9696 "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 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: June 30, 1999 2,387,332 June 30, 1998 1,644,301 (Unaudited) BOONTON ELECTRONICS CORPORATION BALANCE SHEET JUNE 30, SEPTEMBER 30, ASSETS 1999 1998 ------ ------------ ------------ Current assets: Cash and cash equivalents $ 113,452 $ 113,812 Trade receivables 1,070,469 1,299,281 Inventories 1,855,430 1,444,245 Deferred tax benefits 86,000 86,000 Other current assets 405,000 318,442 ------------ ------------ Total current assets 3,530,351 3,261,780 ------------ ------------ Plant and equipment-net 397,230 457,160 ------------ ------------ Other assets: Deferred tax benefit 927,129 927,129 Security deposits 70,121 70,121 ------------ ------------ Total other assets 997,250 997,250 ------------ ------------ Total assets $ 4,924,831 $ 4,716,190 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current liabilities: Note payable $ 69,032 $ 73,333 Related party loans 43,530 43,530 Accounts payable - trade 1,026,502 783,247 Other current liabilities 291,511 527,366 Unsecured claims payable (Chapter 11 settlement) current -- 144,993 ------------ ------------ Total current liabilities 1,430,575 1,572,469 Note payable - noncurrent 255,814 307,496 Related party loans - noncurrent 218,970 218,970 Unsecured claims payable (Chapter 11 settlement) - noncurrent -- -- ------------ ------------ Total liabilities 1,905,359 2,098,935 ------------ ------------ Commitments and contingencies Stockholders' equity: Common stock 238,733 164,430 Capital in excess of par 5,005,563 4,637,866 Deficit (2,224,824) (2,185,041) ------------ ------------ Total stockholders' equity 3,019,472 2,617,255 ------------ ------------ Total liabilities and stockholders' equity $ 4,924,831 $ 4,716,190 ============ ============ The accompanying footnotes are an integral part of these statements. 2 (Unaudited) BOONTON ELECTRONICS CORPORATION STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED -------------------------- JUNE 30, JUNE 30, 1999 1998 ----------- ----------- Net sales $ 5,234,573 $ 4,642,057 Cost of goods sold 2,716,778 2,332,550 ----------- ----------- Gross profit 2,517,795 2,309,507 ----------- ----------- Operating expenses: Commissions 650,643 456,585 Research and development 604,774 748,102 Other operating expenses 1,184,541 1,070,322 ----------- ----------- Total operating expenses 2,439,958 2,275,009 ----------- ----------- Income from operations 77,837 34,498 ----------- ----------- Interest expense 50,478 37,163 Other expense/(income) 65,704 10,929 ----------- ----------- Total other expenses 116,182 48,092 ----------- ----------- Income/(loss) before provision for income taxes (38,345) (13,594) Provision for income taxes 1,438 -- ----------- ----------- Net income/(loss) (39,783) (13,594) Stockholders' equity - beginning 2,617,255 2,449,296 Common stock sold 442,000 25,000 ----------- ----------- Stockholders' equity - ending $ 3,019,472 $ 2,460,702 =========== =========== Weighted average number of shares Outstanding 2,338,954 1,644,301 =========== =========== Earnings/(loss) per share: $(0.02) $(0.01) ====== ====== The accompanying footnotes are an integral part of these statements. 3 (Unaudited) BOONTON ELECTRONICS CORPORATION STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED -------------------------- JUNE 30, JUNE 30, 1999 1998 ----------- ----------- Net sales $ 1,820,394 $ 1,422,653 Cost of goods sold 923,170 680,347 ----------- ----------- Gross profit 897,224 742,306 ----------- ----------- Operating expenses: Commissions 213,266 122,166 Research and development 170,777 254,380 Other operating expenses 397,159 372,058 ----------- ----------- Total operating expenses 781,202 748,604 ----------- ----------- Income/(loss) from operations 116,022 (6,298) ----------- ----------- Interest expense 19,933 10,602 Other expense/(income) 27,106 14,742 ----------- ----------- Total other expenses 47,039 25,344 ----------- ----------- Income/(loss) before provision for income taxes 68,983 (31,642) Provision for income taxes 1,439 -- ----------- ----------- Net income/(loss) 67,544 (31,642) Stockholders' equity - beginning 2,951,928 2,492,344 ----------- ----------- Stockholders' equity - ending $ 3,019,472 $ 2,460,702 =========== =========== Weighted average number of shares Outstanding 2,338,954 1,644,301 =========== =========== Earnings/(loss) per share: $0.03 $(0.02) ===== ====== The accompanying footnotes are an integral part of these statements. 4 (Unaudited) BOONTON ELECTRONICS CORPORATION STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED ------------------------- JUNE 30, JUNE 30, 1999 1998 --------- --------- Cash provided/(used) by operations: Net income/(loss) $ (39,783) $ (13,594) Adjustments to reconcile net income: Depreciation & amortization 66,087 60,391 (Gain) on sale of fixed assets (150) -- Decrease/(increase) in current assets: Accounts receivable 228,812 216,740 Inventories (411,185) (26,897) Other current assets (86,558) 94,495 Increase/(decrease) in current liabilities: Accounts payable 243,255 (349,822) Chapter 11 settlement - current (144,993) (48,491) Accrued liabilities (235,855) 131,424 --------- --------- Net cash provided/(used) by operations (380,370) 64,246 --------- --------- Cash flows from investing activities: Purchase of equipment (6,157) (565) Proceeds from sale of assets 150 1,103 --------- --------- Net cash provided/(used) by investing activities (6,007) 538 --------- --------- Cash flows from financing activities: Increase notes payable -- -- Payments on loans (55,983) (91,795) Proceeds from sale of stock 442,000 25,000 --------- --------- Net cash provided/(used) by financing activities 386,017 (66,795) --------- --------- Increase/(decrease) in cash and cash equivalents (360) (2,011) Cash and cash equivalents at beginning of period 113,812 121,620 --------- --------- Cash and cash equivalents at end of period $ 113,452 $ 119,609 ========= ========= The accompanying footnotes are an integral part of these statements. 5 (Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND DESCRIPTION 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. The Company markets and distributes its products throughout the United States and abroad through some 15 domestic sales representatives and 24 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 manufacturers, although these are not generally competitive with the Company's products except that some items handled by foreign distributors may be somewhat competitive. B. 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 could differ from those estimates. C. 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. D. Inventories - stated at the lower of cost or market determined by the first-in, first-out (FIFO) method. E. Plant and equipment - Depreciation and amortization are calculated by the straight-line method for financial reporting purposes at rates based on the following estimated useful lives: Building and improvement 39 Machinery and equipment 5-10 Office furniture and fixtures 5-10 Transportation equipment 3 6 (Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 The accelerated cost recovery system and modified accelerated cost recovery system is 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. F. Financial risk - The Company regularly maintains bank account balances in excess of FDIC insurable limit. G. 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, based on the weight of available evidence and the probability that some portion of the deferred tax asset will not be realized. H. Financial Instruments - The Company's financial instruments include cash, cash equivalents, trade receivables and payables, 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. I. Stock-Based Compensation - The Company has elected to follow Account Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB25) and related interpretations in accounting for its employee stock options. Under APB25, because the exercise price of employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recorded. Effective October 1, 1997, the Company has adopted the disclosure only provisions of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (Statement 123). 7 (Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 NOTE 2 - PROCEEDINGS UNDER CHAPTER 11: The Company operated under Chapter 11 proceedings for the period September 7, 1993 through November 15, 1994 when, on the later date, the order confirming the Plan of Reorganization was entered by the United States Bankruptcy Court, District of New Jersey. The settlement of unsecured claims under the confirmed Plan of Reorganization totaling 35% of allowed claims for accounts payable and accrued expenses 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 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 and/or paid to date (953,170) ------------ Chapter 11 settlement total June 30, 1999 $ -- ============ 8
(Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 NOTE 3 - INVENTORIES JUNE 30, SEPTEMBER 30, 1999 1998 ------------- ------------- Raw material $ 958,606 $ 707,729 Work in process 605,438 532,470 Finished goods 291,386 204,046 ------------- ------------- Total inventories $ 1,855,430 $ 1,444,245 ============= ============= NOTE 4 - PLANT AND EQUIPMENT: JUNE 30, SEPTEMBER 30, 1999 1998 ------------- ------------- Building and improvements $ 62,329 $ 62,329 Machinery and equipment 1,675,511 1,670,068 Office furniture and fixtures 583,232 582,518 Transportation equipment 13,188 13,188 ------------- ------------- Total 2,334,260 2,328,103 Less Accumulated depreciation 1,937,031 1,870,943 ------------- ------------- Net depreciated cost $ 397,229 $ 457,160 ============= ============= NOTE 5 - NOTES PAYABLE JUNE 30, SEPTEMBER 30, 1999 1998 ------------- ------------- 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 ============= =============
Interest expense for the fiscal years ended September 30, 1998 and 1997 amounted to $24,035 and $24,757, respectively. No principal payments were made due to these notes being subordinated to the NJEDA loan. 9
(Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 JUNE 30, SEPTEMBER 30, 1999 1998 ------------- ------------- B. New Jersey Economic Development Authority: Notes, dated July 31, 1996, payable in monthly installments of $7,620 including interest at 6.75% per annum through June 30, 2003: $ 324,846 $ 380,829 Less current portion 69,032 73,333 ------------- ------------- Noncurrent portion $ 255,814 $ 307,496 ============= =============
Interest expense for the fiscal years ended September 30, 1998 and 1997 amounted to $28,061 and $23,066, respectively. Future principal payments under the terms of the agreement are as follows: FISCAL YEAR AMOUNT ----------- ------ 1999 73,333 2000 72,647 2001 77,778 2002 83,271 2003 73,800 -------- TOTAL: $380,829 ======== NOTE 6 - 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. 10 (Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 NOTE 7 - COMMITMENTS AND CONTINGENCIES: Commitments: A. Retirement Plans: 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 $33,792 and $37,581 for the years ended September 30, 1998 and 1997, 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 plans ended effective December 1996 and no further grants may be made for options. 11 (Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 OPTION ------ PRICE PER SHARE NUMBER OF SHARES --------------- ---------------- 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 Expired $ 1.0625 (20,000) ------- Shares under option at September 30, 1997 & 1998 $ 1.0625 26,500 ======= 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, 1998 was $227,400. Annual rent for the initial seven-year term is $227,400 for the first four years and $300,000 for years five through seven. Future minimum lease payments required under the operating lease are as follows: FISCAL YEAR AMOUNT ----------- ------ 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 that 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: 12 (Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 FISCAL YEAR AMOUNT ----------- ------ 1999 17,617 2000 17,617 2001 1,468 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 Department. Costs associated with this site are charged directly to income as incurred. The owner of this site has notified the Company that if the NJDEP investigation proves to have interfered with a sale of the property, the owner 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. Costs charged to operations in connection with the water management plan amounted to $57,205 and $43,173 for the years ended September 30, 1998 and 1997, respectively. The Company estimates the expenditures in this regard for the fiscal year ending September 30, 1999 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. Contingent Subscription and Option Agreement: On October 2, 1997, the Board of Directors of Boonton Electronics Corporation (BEC) agreed to enter into a Subscription and Option Agreement with G.E.M. USA, Inc. (GEM), a wholly-owned subsidiary of General Electronique Mesure, S.A., whereby GEM shall have the option to buy 435,984 shares of the common stock of BEC at an option price of $3.24 per share. The term of the option agreement shall be for a period of two years. GEM paid BEC $25,000 for this option and simultaneously purchased 7,716 shares of BEC's common stock from the corporation for $25,000. 13 (Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 Further, on June 30, 1997, the Board of Directors of BEC resolved to enter into a Shared Facilities Agreement with B&K Precision, Inc. (B&K), a wholly owned subsidiary of GEM, as additional consideration for the above noted option. B&K shall pay BEC a monthly management fee of $15,000 until May, 1999, at which time the management fee will be $5,000 per month. They shall also pay rent at the same price per square foot as BEC for the area sublet to B&K. The effective date on both the above-noted agreements was October 1, 1997, one day subsequent to the fiscal year end, September 30, 1997. The company also received payment of $50,000 on October 1, 1997. C. Income Tax Contingencies: The Company's income tax returns for the fiscal years ended September 30, 1996, 1997 and 1998 are subject to review. NOTE 8 - COMMON AND TREASURY STOCK:
JUNE 30, SEPTEMBER 30, 1999 1998 ---------- ------------ Common Stock: $.10 par value, authorized 5,000,000 shares, issued and outstanding 2,387,332 shares and 1,644,301 shares, respectively. $ 238,733 $ 164,430 ========== ========== NOTE 9 - INCOME TAXES: The components of the deferred tax asset are: JUNE 30, SEPTEMBER 30, 1999 1998 ---------- ------------- Deferred tax asset $2,867,591 $2,867,591 Less: Valuation allowance (1,854,462) (1,854,462) ---------- ---------- Net deferred tax asset $1,013,129 $1,013,129 ========== ==========
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". 14 (Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 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. JUNE 30, JUNE 30, 1999 1998 --------- --------- Computed income taxes at statutory rate $ -- $ 6,136 Recognition of net operating loss -- (6,136) --------- --------- Expense/(benefit) $ -- $ -- ========= ========= The Company has net operating loss carryforwards for federal and state purposes approximating $6,067,151 and $8,063,752 that will not begin to expire until the year 2011 and 2003 respectively. These loss carryforwards can be utilized to reduce future taxable income dollar for dollar. 15 (Unaudited) BOONTON ELECTRONICS CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 NOTE 10 - 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: NINE MONTHS ENDED % OF JUNE 30, AMOUNT TOTAL SALES ----------------- ---------- ----------- 1999 $2,504,815 48% 1998 $1,961,972 42% B. Customers sales to domestic government agencies were as follows: NINE MONTHS ENDED % OF JUNE 30, AMOUNT TOTAL SALES ----------------- ---------- ----------- 1999 $ 291,097 6% 1998 $ 167,422 4% NOTE 11 - EARNINGS PER SHARE: Earnings per share have been computed by dividing net earnings by the weighted average number of common shares outstanding of 2,338,954 for 1999 and 1,644,301 for 1998. Options to purchase a total of 428,268 shares of common stock at $3.24 per share were not included because the exercise price exceeded the average market price, which would result in antidilution. Incentive stock options to purchase 26,500 shares in 1998 and 26,500 shares in 1997 were not included because they were insignificant. 16 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS NINE MONTHS ENDED JUNE 30, 1999 Sales for the nine months ended June 30, 1999 were $592,516 more than the prior year due to the increase in export shipments. Cost of goods sold was $384,228 higher than the prior year due to the higher volume in sales. The gross profit, as percentage of sales decreased to 48.1% versus the prior year's 49.8%. Research and development expense was lower than the prior year by $143,328 due to capitalization of software/hardware new product development. The other operating expense categories were $308,277 higher than the prior year due to reorganizational expenses. Income from operations was $43,339 higher than the prior year due to the increased sales volume coupled with the decrease in development expense. There was a net loss of $38,345 versus a prior year's net loss of $13,594. The June 30, 1999 production inventory balance was $358,593 higher than the September 30, 1998 balance. The demonstrator inventory balance increased by $52,592 over the September balance for demonstrator additions for new products. Accounts receivable was down $228,812 from September's balance. The current ratio at June 30, 1999 was 2.47 versus September's 2.07. The company's backlog at June 30, 1999 was $712,112, which was $269,556 below the backlog balance as of September 30, 1998. Bookings for the quarter and month ended June 30, 1999 were $1,740,979 and $555,785, respectively. 17 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/ YVES GUYOMAR ------------------------------------- Yves Guyomar, President and Chief Executive Officer Date: August 23, 1999 BY: /s/ ROBERT HANNON ------------------------------------- Robert Hannon, Controller Date: August 23, 1999 August 23, 1999 18 BOONTON ELECTRONICS CORPORATION INDEX TO EXHIBIT FILED IN THE QUARTERLY REPORT ON FORM 10-QSB FOR THE NINE MONTHS ENDED JUNE 30, 1998 EXHIBIT NO. PAGE 27 Financial Data Sheet 20 19 EX-27 2 FDS
5 0000013191 Boonton Electronics 1 USD 9-MOS SEP-30-1999 OCT-01-1998 JUN-30-1999 1 113,452 0 1,070,469 0 1,855,430 3,530,351 2,334,261 1,937,031 4,924,831 1,430,575 0 0 0 238,733 2,780,739 4,924,831 5,234,573 5,234,573 2,716,778 2,439,958 65,704 0 50,478 (38,345) 1,438 (39,783) 0 0 0 (39,783) (.02) (.02)
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