-----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, QhPQ1YcAiyXjQOtRbV3sOOmTCljdNjM1kJIxFWDFPmUtkM9tbsmkUPjnMXFC/LsO BF+/+wF/0ODkWU7pS8+tBQ== 0000950169-96-000444.txt : 19961113 0000950169-96-000444.hdr.sgml : 19961113 ACCESSION NUMBER: 0000950169-96-000444 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 SROS: NONE 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: 96659581 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, INC. 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 September 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 September 30, 1996 1,175,533 --------- OPTELECOM, INC. FORM 10-Q CONTENTS PART I. FINANCIAL INFORMATION ITEM 1. UNAUDITED FINANCIAL STATEMENTS Condensed Balance Sheets as of September 30, 1996 (Unaudited) and December 31, 1995 Condensed Statements of Operations for the Three Months Ended September 30, 1996 and 1995 (Unaudited) Condensed Statements of Operations for the Nine Months Ended September 30, 1996 and 1995 (Unaudited) Statements of Cash Flows for the Nine Months Ended September 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 September 30, 1996 and December 31, 1995
ASSETS 1996 1995 (Unaudited) (Audited) Current Assets: Cash $ 78,447 $ 62,436 Accounts Receivable 1,969,983 1,411,209 Inventory 1,440,686 1,080,341 Prepaid Expenses 89,360 108,960 Income Tax Refund Receivable 52,371 215,693 ---------- ---------- Total Current Assets 3,630,847 2,878,639 Plant and Equipment, at Cost Less Accumulated Depreciation and Amortization 739,071 795,365 ---------- ---------- TOTAL ASSETS $4,369,918 $3,674,004 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Demand Note Payable to Bank $ 50,000 $ 60,000 Accounts Payable 631,370 800,409 Accrued Payroll 94,948 95,956 Accrued Annual Leave 101,689 89,210 Income Taxes Payable 110,000 0 Current Portion of Notes Payable 8,704 34,819 Other Current Liabilities 393,375 152,962 ---------- ---------- Total Current Liabilities 1,390,086 1,233,356 ---------- ---------- Long-Term Liabilities Note Payable 46,426 46,426 Other Long-term Liabilities 196,770 205,445 ---------- ---------- Total Long-term Liabilities 243,196 251,871 ---------- ---------- TOTAL LIABILITIES $1,633,282 $1,485,227 ---------- ---------- Stockholders' Equity Common Stock - Par Value $.03 Per Share, Authorized 5,000,000 Shares, Issued and Outstanding 1,175,533 and 1,171,042 35,266 35,131 Discount on Common Stock (11,161) (11,161) Additional Paid-In Capital 1,911,670 1,898,239 Retained Earnings 800,861 266,568 ---------- ---------- 2,736,636 2,188,777 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,369,918 $3,674,004 ========== ==========
The accompanying notes are an integral part of this statement. 3 OPTELECOM, INC. Condensed Statements of Operations for the Three Months Ended September 30, 1996 and 1995 (UNAUDITED)
Three Months Three Months Ended Ended September 30, 1996 September 30, 1995 Revenue $2,382,428 $1,658,467 Direct Costs, Overhead and G&A 1,823,850 1,547,536 ---------- ---------- Operating Income 558,578 110,931 Other Expenses (Income) 7,081 1,634 ---------- ---------- Income Before Income Taxes 551,497 109,297 Income Tax Expense 219,249 38,285 ---------- ---------- Net Income 332,248 71,012 ========== ========== Net Earnings Per Share $ .28 $ .06 Weighted Average Number of Common Shares Used in 1,197,904 1,170,054 Computing Net Earnings Per Share
The accompanying notes are an integral part of this statement. 4 OPTELECOM, INC. Condensed Statements of Operations for the Nine Months Ended September 30, 1996 and 1995 (UNAUDITED)
Nine Months Nine Months Ended Ended September 30, 1996 September 30, 1995 Revenue $6,433,078 $4,851,257 Direct Costs, Overhead and G&A 5,525,829 5,123,907 ---------- ---------- Operating Income (Loss) 907,249 (272,650) Other Expenses (Income) 42,907 10,253 ---------- ---------- Income (Loss) Before Income Taxes 864,342 (282,903) Income Tax Expense (Benefit) 330,049 (188,715) ---------- ---------- Net Income (Loss) 534,293 (94,188) ========== ========== Net Earnings (Loss) Per Share $ .45 $ (.08) Weighted Average Number of Common Shares Used in 1,175,356 1,168,413 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 September 30, 1996 and September 30, 1995 (UNAUDITED)
Nine Months Ended September 1996 1995 ---------- --------- Cash Flows From Operating Activities Net Income (Loss) $ 534,293 $ (94,188) Reconciliation of Net Income (Loss) to Net Cash (Used In) Operating Activities: Depreciation and Amortization 173,664 154,263 Deferred Rent (8,676) 0 Decrease (Increase) in Assets: Accounts Receivable (558,774) 194,726 Inventory (360,345) 76,711 Prepaid Expenses 19,600 (16,691) Income Taxes Receivable 163,322 (149,715) Increase (Decrease) in Liabilities: Accounts Payable (169,039) 59,386 Accrued Payroll (1,008) (48,654) Accrued Annual Leave 12,479 (1,411) Other Current Liabilities 240,413 (271,160) Accrued Income Tax 110,000 (45,000) ---------- ---------- Net Cash Provided by (Used In) Operating Activities 155,929 (141,733) Investing Activities Acquisition of Property and Equipment (117,366) (260,092) ---------- ---------- Net Cash (Used In) Investing Activities (117,366) (260,092) Financing Activities Net (Payments) on Note Payable (26,115) Net (Repayments) Borrowings on Note Payable to Bank (10,000) 85,034 Proceeds from Exercise of Stock Options 13,563 8,608 ---------- ---------- Net Cash Provided by Financing Activities (22,552) 93,642 Net Increase (Decrease) in Cash 16,011 (308,183) Cash - Beginning of Period 62,436 316,183 ---------- ---------- Cash - End of Period 78,447 8,000 ========== ========== Supplemental Disclosures of Cash Flow Information Cash Paid During the Period for Interest 19,473 3,721
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 September 30, 1996 is $950,000 subject to available receivables. 3. Inventory Inventory consisted of the following: Sept. 30, 1996 Sept. 30, 1995 -------------- -------------- Raw Materials $605,683 $429,970 WIP 537,128 133,666 Finished Goods 297,875 136,649 ---------- -------- Total $1,440,686 $700,285 ========== ======== 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 nine months of 1996, revenues were $6,433,078 and net income was $534,293 compared to revenues of $4,851,257 and a net loss of ($94,188) for the same period of 1995. In 1996, third quarter revenues were $2,382,428 with a net income of $332,248 compared to revenues of $1,658,467 and net income of $71,012 for the third quarter of 1995. Communication Products Division (CPD) third quarter 1996 revenues were $1,511,605 compared to $1,109,479 for the same period in 1995. The division achieved net income of $28,675 compared to a net loss of ($181,972) for the third 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 $133,346 compared to $179,172 for the third quarter of 1995. The division recorded a loss of ($20,662) for the third quarter, which was substantially lower than the profit of $14,194 realized in the same quarter of 1995. The current quarter revenue reflects the impact of new contract work on fiber optic gyros booked in the beginning of the third quarter of 1996. We anticipate the same performance for the balance of the year. Laser Illuminator Division revenues were $737,477 for the quarter compared to $369,816 for the equivalent period of 1995; net income was $324,235 compared to a net income of $238,790 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 reflect a tax accrual provision. We anticipate continuing significant revenues for this segment through the remainder of the year as work continues on our current contracts. Increases in Inventory levels were necessary to ensure responsivity to our marketplace. We anticipate some reduction in these levels through improved forecasting and modified supplier arrangements. Company backlog at September 30, 1996 was $1,365,362. Liquidity and Capital Resources There were no significant changes in the Company's financial condition in the third quarter of 1996. At the end of this quarter the current ratio was 2.61 compared to 2.33 at the end of 1995 and 3.24 at the end of the third quarter of 1995. The overall cash provided by (used in) operating activities for the nine months of 1996 was $155,929 as compared to (141,733)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 September 30, 1996. EXHIBIT 11 - STATEMENT REGARDING COMPUTATION OF NET INCOME (LOSS) PER SHARE Three Months Ended Three Months Ended Primary Earnings Per Share September 30, 1996 September 30, 1995 - -------------------------- ------------------ ------------------ Average Common Shares Outstanding 1,197,904 1,170,054 Net Income (Loss) 332,248 71,012 Primary Earnings Per Share .28 .06 Fully Diluted Earnings Per Share - -------------------------------- Average Common Shares Outstanding 1,210,569 1,170,054 Net Income (Loss) 332,248 71,012 Fully Diluted Earnings Per Share .27 .06 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: 11-11-96 /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 9-MOS DEC-31-1995 SEP-30-1996 78,447 0 1,969,983 0 1,440,686 3,630,847 2,122,376 1,383,305 4,369,918 1,390,086 0 0 0 35,266 0 4,369,918 6,433,078 6,433,078 5,525,829 5,525,829 42,907 0 0 864,342 330,049 0 0 0 0 534,293 .45 .45
-----END PRIVACY-ENHANCED MESSAGE-----