0000912057-95-006418.txt : 19950815 0000912057-95-006418.hdr.sgml : 19950815 ACCESSION NUMBER: 0000912057-95-006418 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EIP MICROWAVE INC CENTRAL INDEX KEY: 0000026782 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 952148645 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-05351 FILM NUMBER: 95562388 BUSINESS ADDRESS: STREET 1: 1589 CENTRE POINTE DRIVE CITY: MILPITAS STATE: CA ZIP: 95035-8010 BUSINESS PHONE: 7147241666 MAIL ADDRESS: STREET 1: 1589 CENTRE POINTE DRVIE CITY: MILPITAS STATE: CA ZIP: 95035 FORMER COMPANY: FORMER CONFORMED NAME: JENOA INC DATE OF NAME CHANGE: 19800103 FORMER COMPANY: FORMER CONFORMED NAME: DANA ELECTRONICS INC DATE OF NAME CHANGE: 19780228 FORMER COMPANY: FORMER CONFORMED NAME: DANALAB INC DATE OF NAME CHANGE: 19750224 10QSB 1 FORM 10QSB SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ________________________________________ FORM 10-QSB (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1995 [ ] Transition Report Under Section 13 or 15(d) of the Exchange Act For the transition period from __________ to ___________ COMMISSION FILE NUMBER 0-5351 EIP MICROWAVE, INC. _______________________________________________________________________________ (Exact name of small business issuer as specified in its charter) DELAWARE 95-2148645 _______________________________ ________________________________ (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 3 Civic Plaza, Suite 265, Newport Beach, California 92660 ________________________________________________________________________________ (Address of principal executive offices) (Zip Code)
(714) 720-1766 ___________________________________ (Issuer's telephone number) ______________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ] OUTSTANDING COMMON STOCK: As of August 4, 1995, Registrant had only one class of common stock, and had 423,307 shares of this $.01 par value common stock outstanding. Transitional Small Business Disclosure Format (check one): YES [ ] NO [ X ] Total Number of Pages: 12 Exhibit Index 11 1 EIP MICROWAVE, INC. FORM 10-QSB Quarter Ended June 30, 1995 PART I FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Pages 3 - 6 Item 2. Management's Discussion and Analysis of Pages 7 - 8 Results of Operations and Financial Condition PART II OTHER INFORMATION Item 2. Changes in Securities Page 9 Item 6. Exhibits and Reports on Form 8-K Page 9 Signatures Page 10 Index to Exhibits Page 11 2 EIP MICROWAVE, INC. PART I - FINANCIAL INFORMATION ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (In thousands, unaudited) JUNE 30, SEPTEMBER 30, 1995 1994 -------- ------------- ASSETS Current assets: Cash and cash equivalents $ 220 $ 211 Short-term investments 312 308 ------ ------ 532 519 Accounts receivable, net 756 714 Inventories 1,130 984 Prepaid expenses 39 38 ------ ------ Total current assets 2,457 2,255 ------ ------ Property, plant and equipment, net 288 459 Other assets 30 30 ------ ------ $2,775 $2,744 ------ ------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 398 $ 527 Accrued liabilities 623 626 ------ ------ Total current liabilities 1,021 1,153 ------ ------ Commitments and contingencies Shareholders' equity: Common stock, $.01 par value, authorized - 10,000,000 shares, 423,307 and 423,307 shares issued and outstanding, respectively 5 5 Additional paid-in capital 844 844 Retained earnings 905 742 ------ ------ Total shareholders' equity 1,754 1,591 ------ ------ $2,775 $2,744 ------ ------ 3 EIP MICROWAVE, INC. PART I/ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS (continued) CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (In thousands except per share data, unaudited)
THREE MONTHS NINE MONTHS ENDED JUNE 30, ENDED JUNE 30, 1995 1994 1995 1994 --------------- --------------- Net sales $1,679 $1,264 $4,880 $3,900 Costs and expenses: Cost of sales 964 696 2,537 2,179 Research, development and engineering 172 158 544 476 Selling, general and administrative 540 541 1,710 1,663 Interest and other, net (20) 1 (75) 1 ------ ------ ------ ------ 1,656 1,396 4,716 4,319 Income (loss) before income tax 23 (132) 164 (419) Income tax provision 0 0 1 1 ------ ------ ----- ------- Net income (loss) 23 (132) 163 (420) Retained earnings at beginning of period 882 907 742 1,195 ------ ------ ----- ------- Retained earnings at end of period $ 905 $ 775 $ 905 $ 775 ------ ------ ----- ------- Income (loss) per share $ .05 $ (.31) $ .39 $ (.99) ------ ------ ----- ------- Shares of common stock 423 423 423 423 ------ ------ ----- -------
4 EIP MICROWAVE, INC. PART I/ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS (continued) CONSOLIDATED STATEMENT OF CASH FLOWS Increase (decrease) in cash (In thousands, unaudited)
NINE MONTHS ENDED JUNE 30, JUNE 30, 1995 1994 ------- ------- Cash flows from operating activities: Net income (loss) $163 $(420) Adjustments to reconcile net income (loss) to net cash used by operating activities: Depreciation and amortization 144 199 Change in assets and liabilities: Accounts receivable, net (42) (233) Inventories (146) 60 Prepaid expenses and other assets (1) 39 Accounts payable (129) 172 Accrued liabilities (3) (11) ------ ------ Cash used by operating activities (14) (194) ------ ------ Cash flows from investing activities: Short-term investments 4 - Capital expenditures (9) (9) Sale of capital equipment 28 - ------ ------ Cash provided (used) by investing activities 23 (9) ------ ------ Increase (decrease) in cash and equivalents 9 (203) Cash and equivalents at beginning of year 211 247 ------ ------ Cash and equivalents at end of third quarter $ 220 $ 44 ------ ------
5 EIP MICROWAVE, INC. PART I/ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (a) The consolidated financial information presented in this Form 10-QSB has been prepared from the accounting records without audit and conforms with the financial statements included in the Company's annual report filed with the Commission for the preceding fiscal year. The information furnished reflects all adjustments and disclosures which are, in the opinion of management, of a normal, recurring nature, and necessary for a fair statement of the results for the interim periods. This report should be read in conjunction with the Company's 1994 Annual Report on Form 10-KSB. (b) Composition of certain balance sheet captions (in thousands, unaudited): June 30, September 30, 1995 1994 -------- ------------ Inventories, net: Raw materials $ 569 $ 576 Work-in-process 455 401 Finished goods 106 7 -------- ------ $ 1,130 $ 984 -------- ------ Property, plant and equipment: Cost $ 5,185 $ 5,388 Accumulated depreciation (4,897) (4,929) -------- ------- $ 288 $ 459 -------- ------- 6 EIP MICROWAVE, INC. PART I/ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS Net sales for the three months ended June 30, 1995, were $1,679,000, a 33% increase from the same period last year. Net sales for the nine months ended June 30, 1995, were $4,880,000, a 25% increase from the same period last year. The increase in sales for both periods was attributable to increased sales to government contractors, increased sales of product configured in the VXIbus standard, and an increase in international sales, compared to the same periods last year. The Company still believes the overall softness in domestic and foreign markets for the Company products will continue to affect sales. Product cost of sales increased to 57% of sales in the third fiscal quarter of 1995, from 55% of sales in the third fiscal quarter of 1994. The increase was primarily attributable to change in product mix, compared to the same period last year. Product cost of sales was 52% of sales for the nine months ended June 30, 1995, as compared to 56% of sales for the same period last year. The decrease was primarily attributable to substantially higher production volume, and change in product mix, compared to the same period last year. Incoming orders for the third fiscal quarter were $2,445,000, a 76% increase from the same period a year ago. Incoming orders for the nine months ended June 30, 1995, were $5,679,000, a 39% increase from the same period a year ago. Backlog at June 30, 1995, was $1,602,000, a 191% increase from the end of the third fiscal quarter last year. The increase in orders for both periods, and backlog, resulted primarily from increased orders from government contractors, increased orders of product configured in the VXIbus standard, and an increase in international orders, compared to the same periods last year. The Company still believes the overall softness in domestic and foreign markets for the Company products will continue to affect orders. Research, development and engineering expenses increased 9% to $172,000 in the third fiscal quarter of 1995, compared to $158,000 for the same quarter last year. Research, development and engineering expenses increased 14% to $544,000 for the nine months ended June 30, 1995, compared to $476,000 for the same period last year. The increase in research, development and engineering expenses for both periods was primarily attributable to new product development. Selling, general and administrative expenses for the third fiscal quarter of 1995 of $540,000 was comparable to selling, general and administrative expenses of $541,000 for the same quarter last year. Despite a 33% increase in net sales for the three months ended June 30, 1995, as compared to the same period last year, total selling, general and administrative expenses remained comparable, primarily due to increased commission expense offset by decreased professional and consulting fees. Selling, general and administrative expenses increased 3% to $1,710,000 for the nine months ended June 30, 1995, compared to $1,663,000 in the same period last year. The 7 EIP MICROWAVE, INC. PART I/ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (continued) increase in selling, general and administrative expenses for the nine months ended June 30, 1995, was due primarily to increased commission expense resulting from increased sales volume. The Company recorded net income of $23,000 for the third fiscal quarter of 1995, as compared to a net loss of $132,000 recorded during the third fiscal quarter of the previous year. The Company recorded net income of $163,000 for the nine months ended June 30, 1995, compared to a net loss of $420,000 for the same period last year. The Company still believes that the overall softness in domestic and foreign markets for the Company's products will continue to affect earnings. FINANCIAL CONDITION At June 30, 1995, the Company's cash and short-term investment balance was $532,000, as compared with a cash and short-term investment balance of $519,000 at September 30, 1994. At June 30, 1995, the Company had no material commitments for capital expenditures. At June 30, 1995, working capital increased $334,000, to $1,436,000, from $1,102,000 at September 30, 1994, and the Company's current ratio increased to 2.4:1 from 2.0:1 over the same time period. The Company still believes that the overall softness in domestic and foreign markets for the Company's products will continue to affect incoming orders and net sales. This market softness will be at least partially offset by increased orders and sales of products configured in the VXIbus standard and the recently introduced pulsed frequency counter with peak power measurement. The Company will continue to control expenses and minimize debt during fiscal 1995. On December 20, 1994, the Company obtained a line of credit agreement with a bank that allows the Company to borrow on a short-term basis through December 5, 1995. The maximum borrowings under this agreement are the lesser of $500,000, or 60% of the net amount of the Company's eligible accounts receivable as determined by the bank, bearing interest at the prime rate plus 3.5% per annum, provided that the interest rate in effect each month shall not be less than 7.50% per annum. The agreement, as amended, contains various restrictive covenants requiring, among other matters, the maintenance of minimum levels of tangible net worth and certain financial ratios, including debt to net worth. At June 30, 1995, the Company was in compliance with the restrictive covenants of the line. No borrowings were outstanding under the line at June 30, 1995. The Company believes that the cash on hand and funds generated from operations and the Company's line of credit will adequately finance the Company's operations during fiscal 1995. 8 EIP MICROWAVE, INC. PART II - OTHER INFORMATION Item 2. Changes in Securities The existing credit facility between the Company and its commercial bank contains restrictions on dividend payments and financial ratios regarding, among other matters, the maintenance of minimal levels of tangible net worth, minimum quick ratio and limits of debt to net worth. The credit agreement is more fully described in Part I/Item 2 - Financial Condition. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27 Financial Data Schedule. (b) Reports on Form 8-K. The Company did not file with the Commission any reports on Form 8-K in the quarter ended June 30, 1995. 9 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EIP MICROWAVE, INC. (Registrant) DATE: August 10, 1995 BY: /s/ J. Bradford Bishop _________________________ J. Bradford Bishop Chairman of the Board and Chief Executive Officer DATE: August 10, 1995 BY: /s/ John Ardizzone ___________________________ John Ardizzone Vice President - Finance and Chief Financial Officer 10 EIP MICROWAVE, INC. INDEX TO EXHIBITS Sequentially Exhibit No. Description Numbered Page ---------- ----------- ------------- 27 Financial Data Schedule 12 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS SEP-30-1995 OCT-01-1994 JUN-30-1995 220 312 830 74 1,130 2,457 5,185 4,897 2,775 1,021 0 5 0 0 1,749 2,775 4,880 4,880 2,537 2,537 2,198 0 (19) 164 1 163 0 0 0 163 .39 0