-----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, BKXXJdRdHFTV6tBcsJrbTNSSAts99tz5RpUwNSGA4O+zps+bT3QWVzEPfFQgjSTd T/YR1R5BPnmMNH8bYqxpZA== 0000950169-96-000313.txt : 19960816 0000950169-96-000313.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950169-96-000313 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPTELECOM INC CENTRAL INDEX KEY: 0000275858 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 521010850 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08828 FILM NUMBER: 96614934 BUSINESS ADDRESS: STREET 1: 9300 GAITHER RD CITY: GAITHERSBURG STATE: MD ZIP: 20877 BUSINESS PHONE: 3018402121 MAIL ADDRESS: STREET 1: 9300 GAITHER RD CITY: GAITHERSBURG STATE: MD ZIP: 20877 10-Q 1 OPTELECOM SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended June 30, 1996 Commission File No. 0-8828 Optelecom, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 52-1010850 (State of Other Jurisdiction of (IRS Employer Identification No.) Incorporation or Organization) 9300 Gaither Road Gaithersburg, MD 20877 (Address of Principal Executive (Zip Code) Offices) Registrant's Telephone Number, (301) 840-2121 Including Area Code (Phone Number) NONE (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) Indicate by checkmark 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 twelve (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 ninety (90) days. Yes X No Common Stock Outstanding as of June 30, 1996 1,175,179 --------- OPTELECOM, INC. FORM 10-Q CONTENTS PART I. FINANCIAL INFORMATION ITEM 1. UNAUDITED FINANCIAL STATEMENTS Condensed Balance Sheets as of June 30, 1996 (Unaudited) and December 31, 1995 Condensed Statements of Operations for the Three Months Ended June 30, 1996 and 1995 (Unaudited) Condensed Statements of Operations for the Six Months Ended June 30, 1996 and 1995 (Unaudited) Statements of Cash Flows for the Six Months Ended June 30, 1996 and 1995 (Unaudited) Notes to Condensed Financial Statements (Unaudited) ITEM 2. MANAGEMENT`S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PART II. OTHER INFORMATION 2 OPTELECOM, INC. Condensed Balance Sheets as of June 30, 1996 and December 31, 1995
ASSETS 1996 1995 (Unaudited) (Audited) Current Assets: Cash $ 188,774 $ 62,436 Accounts Receivable 1,888,532 1,411,209 Inventory 1,177,664 1,080,341 Prepaid Expenses 148,190 108,960 Income Tax Refund Receivable 175,000 215,693 ----------- ----------- Total Current Assets 3,578,160 2,878,639 Plant and Equipment, at Cost Less Accumulated 745,639 795,365 ----------- ----------- Depreciation and Amortization TOTAL ASSETS $4,323,799 $3,674,004 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Demand Note Payable to Bank $310,000 $60,000 Accounts Payable 813,878 800,409 Accrued Payroll 106,764 95,956 Accrued Annual Leave 102,285 89,210 Other Current Liabilities 328,732 152,962 Current Portion of Notes Payable 17,413 34,819 ------------ ----------- Total Current Liabilities 1,679,072 1,233,356 ----------- ---------- Long-Term Liabilities Note Payable 46,427 46,426 Other Long-term Liabilities 199,663 205,445 ----------- ---------- Total Long-term Liabilities 246,090 251,871 ----------- ---------- TOTAL LIABILITIES $1,925,162 $1,485,227 ---------- ---------- Stockholders' Equity Common Stock - Par Value $.03 Per Share, Authorized 5,000,000 Shares, Issued and Outstanding 1,175,179 and 1,171,042 35,206 35,131 Discount on Common Stock (11,161) (11,161) Additional Paid-In Capital 1,905,982 1,898,239 Retained Earnings 468,610 266,568 ----------- ----------- 2,398,637 2,188,777 ----------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,323,799 $3,674,004 ========== ==========
The accompanying notes are an integral part of this statement. 3 OPTELECOM, INC. Consolidated Condensed Statements of Operations for the Three Months Ended June 30, 1996 and 1995 (UNAUDITED)
Three Months Three Months Ended Ended June 30, 1996 June 30, 1995 ------------- ------------- Revenue $2,306,225 $1,406,078 Direct Costs, Overhead and G&A 1,948,657 1,629,660 ----------- ----------- Operating Income (Loss) 357,568 (223,582) Other Expenses (Income) 13,257 (2,109) ------------ ------------- Income (Loss) Before Income Taxes 344,311 (225,691) Income Tax Expense (Benefit) 110,000 (89,000) ----------- ------------- Net Income (Loss) 234,311 (136,691) =========== ============ Net Earnings (Loss) Per Share $ .20 $ (.12) Weighted Average Number of Common Shares Used in 1,192,828 1,172,189 Computing Net Earnings (Loss) Per Share
The accompanying notes are an integral part of this statement. 4 OPTELECOM, INC. Consolidated Condensed Statements of Operations for the Six Months Ended June 30, 1996 and 1995 (UNAUDITED)
Six Months Six Months Ended Ended June 30, 1996 June 30, 1995 ------------- ------------- Revenue $4,050,647 $3,192,790 Direct Costs, Overhead and G&A 3,701,979 3,576,371 ---------- ----------- Operating Income (Loss) 348,668 (383,581) Other Expenses (Income) 36,626 (8,619) ----------- ----------- Income (Loss) Before Income Taxes 312,042 (392,200) Income Tax Expense (Benefit) 110,000 (227,000) ----------- ----------- Net Income (Loss) 202,042 (165,200) =========== =========== Net Earnings (Loss) Per Share $ .17 $ (.14) Weighted Average Number of Common Shares Used in 1,187,015 1,175,641 Computing Net Earnings (Loss) Per Share
The accompanying notes are an integral part of this statement. 5 OPTELECOM, INC. Statements of Cash Flows as of June 30, 1996 and June 30, 1995 (UNAUDITED)
Six Months Ended June 30 1996 1995 Cash Flows From Operating Activities Net Income (Loss) $ 202,042 $(165,200) Reconciliation of Net Income (Loss) to Net Cash (Used In) Operating Activities: Depreciation and Amortization 115,001 99,419 Deferred Rent (5,782) (2,965) Deferred Income Taxes 40,693 (188,000) Decrease (Increase) in Assets: Accounts Receivable (477,323) 247,160 Inventories (97,323) 40,199 Prepaid Expenses and Other Receivables (39,231) (7,507) Increase (Decrease) in Liabilities: Accounts Payable 13,469 194,546 Accrued Payroll 10,809 (10,495) Accrued Annual Leave 13,075 14,073 Other Current Liabilities 58,164 (284,020) Accrued Commission 7,613 9,807 Accrued Income Tax 110,000 (45,000) ----------- ----------- Net Cash (Used In) Operating Activities (48,793) (97,983) Investing Activities Acquisition of Property and Equipment (65,274) (224,218) ----------- ----------- Net Cash (Used In) Investing Activities (65,274) (224,218) Financing Activities Net (Payments) on Note Payable (17,413) Net Borrowings on Note Payable to Bank 250,000 98,655 Proceeds from Stock Options 7,818 4,501 ----------- ----------- Net Cash Provided by Financing Activities 240,405 103,156 Net Increase (Decrease) in Cash 126,338 (219,045) Cash - Beginning of Period 62,436 316,183 - -------------------------- ----------- ----------- Cash - End of Period 188,774 97,138 - -------------------- =========== =========== Supplemental Disclosures of Cash Flow Information - ------------------------------------------------- Cash Paid During the Period for Interest 15,860 1,362
The accompanying notes are an integral part of this statement. 6 OPTELECOM, Inc. Notes to Condensed Financial Statements 1. Basis of Presentation The accompanying unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures included in the annual financial statements, prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. In the opinion of management, the unaudited accompanying financial statements reflect all necessary adjustments and reclassifications (all of which are of a normal, recurring nature) that are necessary for fair presentation for the periods presented. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report to the Securities and Exchange Commission on Form 10-K for the year ended December 31, 1995. 2. Line of Credit The Company has a credit agreement with a bank, whereby it may borrow up to $1,000,000 with interest at the bank's prime rate plus 3/4%. The total amount of borrowings which may be outstanding at any given time is based upon a percentage of certain eligible receivables. The amount available under the credit agreement as of June 30, 1996 is $690,000 subject to available receivables. 3. Inventory Inventory consisted of the following: June 30, 1996 June 30, 1995 ------------- ------------- Raw Materials $486,153 $480,892 WIP 405,379 146,232 Finished Goods 286,132 109,673 ----------- ------- Total $1,177,664 $736,797 ========== ======== 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Set forth below is management's discussion and analysis of the Company's financial condition and results of operations. Results of Operations For the first six months of 1996, revenues were $4,050,647 and net income was $202,042 as compared to revenues of $3,192,790 and a net loss of ($165,200) for the same period of 1995. In 1996, second quarter revenues were $2,306,225 with a net income of $234,310 compared to revenues of $1,406,078 and net loss of ($136,691) for the second quarter of 1995. Communication Products Division (CPD) second quarter 1996 revenues were $1,716,515 compared to $1,161,330 for the same period in 1995. The division achieved net income of $129,148 compared to a net loss of ($197,167) for the second quarter of 1995. These results reflected higher levels of OEM (Original Equipment Manufacturers - sales of products to be included in a customer's product) sales and generally higher margins on product sales. Revenues for the R&D Division were $165,193 compared to $56,511 for the second quarter of 1995. The division realized a loss of ($9,179) for the second quarter, which was substantially lower than the loss of ($109,092) incurred in the same quarter of 1995. The higher revenue reflects the impact of the new contract work on fiber optic gyros booked in the beginning of the second quarter of 1996. We anticipate continuation of these improved revenue levels for the balance of the year from new contracts in this area. Laser Illuminator Division revenues were $424,516 for the quarter compared to $188,235 for the equivalent period of 1995; net income was $114,342 compared to a net income of $178,540 for the same quarter in 1995. The anomalous increase in this division's net income in 1995 was due to recognition of tax benefits amounting to $98,000. The 1996 net income figure does not reflect any tax carryback provision. We anticipate continuing significant revenues for this segment throughout the remainder of the year as the work load increases on our current contracts. Company backlog at June 30, 1996 was $1,371,582. Liquidity and Capital Resources There were no significant changes in the Company's financial condition in the second quarter of 1996. At the end of this quarter the current ratio was 2.1 compared to 2.3 at the end of 1995 and 2.1 at the end of the second quarter of 1995. The overall cash used by operating activities for the six months of 1996 was ($48,793) as compared to ($97,903) for the same period of 1995. 8 PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS None ITEM 2 - CHANGES IN SECURITIES None ITEM 3 - DEFAULTS UPON SENIOR SECURITIES None ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5 - OTHER INFORMATION None ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K The Company did not file any reports on Form 8-K during the three months ending June 30, 1996. EXHIBIT 11 - STATEMENT REGARDING COMPUTATION OF NET INCOME (LOSS) PER SHARE Three Months Ended Three Months Ended Primary Earnings Per Share June 30, 1996 June 30, 1995 - -------------------------- ----------------- ------------- Average Common Shares Outstanding 1,192,828 1,182,189 Net Income (Loss) 234,311 (136,691) Primary Earnings Per Share .20 (.12) Fully Diluted Earnings Per Share - -------------------------------- Average Common Shares Outstanding 1,193,353 1,177,198 Net Income (Loss) 234,311 (136,691) Fully Diluted Earnings Per Share .20 (.12) 9 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. OPTELECOM, INC. Date: 8/13/96 /s/ William H. Culver William H. Culver, Chairman and Treasurer /s/ Edmund D. Ludwig Edmund D. Ludwig, President and CEO /s/ Robert S. Lalley Robert S. Lalley, Chief Financial Officer 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1995 JUN-30-1996 188,774 0 1,888,532 0 1,177,664 3,578,160 745,639 115,001 4,323,799 1,679,072 0 0 0 35,206 0 4,323,799 4,050,647 4,050,647 3,738,605 3,738,605 0 0 0 312,042 110,000 0 0 0 0 202,042 .20 .20
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