-----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, Iz0JnyI7DQ9kt8Q5OiDXSS108B9rW0u4AhdyLAeUQ4pfUFMwfTJ1wolrW1Jn95r2 We8464ZvOJxwFiFWU9rpQw== 0000950169-99-000035.txt : 19990518 0000950169-99-000035.hdr.sgml : 19990518 ACCESSION NUMBER: 0000950169-99-000035 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 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: SEC FILE NUMBER: 000-08828 FILM NUMBER: 99625182 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 March 31, 1999 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 Offices) (Zip Code) 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 May 5, 1999 2,156,557 1 OPTELECOM, INC. FORM 10-Q CONTENTS PART I. FINANCIAL INFORMATION ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheets as of March 31, 1999 (Unaudited) and December 31, 1998 (Audited).................................. 3 Consolidated Statements of Operations for the Three Months Ended March 31, 1999 and 1998 (Unaudited) ....................... 4 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1999 and 1998 (Unaudited) ............................. 5 Notes to Consolidated Financial Statements (Unaudited)........... 6 ITEM 2. MANAGEMENT`S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PART II. OTHER INFORMATION
2 OPTELECOM, INC. Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998
ASSETS 1999 1998 ------ ---------- ---------- (Unaudited) (Audited) Current Assets: Cash and cash equivalents 186,871 $ 394,096 Restricted cash 320,523 328,700 Accounts and contracts receivable 1,893,688 1,426,306 Inventories, net 1,895,933 1,847,113 Prepaid expenses and other assets 439,418 344,448 Deferred tax asset 307,960 307,960 ---------- ---------- Total current assets 5,044,393 4,648,623 2,263,818 2,351,563 Intangible Assets, net 231,302 238,493 Goodwill, net Property and Equipment, at cost less accumulated depreciated 1,352,121 1,361,095 Deferred Tax Assets 32,174 32,174 ---------- ---------- TOTAL ASSETS $8,923,808 $8,631,948 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current Liabilities: Bank line-of-credit payable 750,000 $ 650,000 Accounts payable 1,328,703 765,971 Accrued payroll 270,408 204,888 Income taxes payable 338,523 328,700 Other current liabilities 544,910 892,848 Current portion of notes payable 624,996 624,996 ---------- ---------- Total current liabilities 3,857,540 3,467,403 ---------- ---------- LONG-TERM LIABILITIES: Notes payable 1,570,423 1,726,672 Deferred rent liability 141,916 147,241 ---------- ---------- TOTAL LIABILITIES 5,569,879 5,341,316 ---------- ---------- Commitments and Contingencies - - STOCKHOLDERS' EQUITY: Common stock, $.03 par value - shares authorized, 15,000,000; issued and outstanding, 2,156,557 shares 64,697 64,697 Discount on common stock (11,161) (11,161) Additional paid-in capital 4,105,029 4,105,029 Foreign currency translation adjustment 30,182 6,033 Retained (deficit) (834,818) (873,966) ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $8,923,808 $8,631,948 ========== ==========
The accompanying notes are an integral part of this statement. 3 OPTELECOM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31,
1999 1998 ---------- ---------- Revenues $3,528,854 $4,380,922 Cost of goods sold 2,033,977 2,668,844 ---------- ---------- Gross profit 1,494,877 1,712,078 Operating expenses: Engineering 353,200 403,044 Selling and marketing 384,504 451,619 General and administrative 638,740 814,112 ---------- ---------- Total operating expenses 1,376,444 1,668,775 Operating income 118,433 43,303 Other expenses: Interest expense 54,094 58,385 Amortization of goodwill 7,191 47,596 ---------- ---------- Total other expenses 61,285 105,981 Income (loss) before provision (benefit) for income taxes 57,148 (62,678) Provision (Benefit) for income taxes 18,000 (18,974) ---------- ---------- Net income (loss) $ 39,148 $ (43,704) ========== ========== Basic earnings (loss) per share $ 0.02 $ (0.02) ========== ========== Diluted earnings (loss) per share $ 0.02 $ (0.02) ========== =========
The accompanying notes are in integral part of this statement. 4 OPTELECOM, INC. CONSOLIDATED STATEMENTS OF CASH FOR THE THREE MONTHS ENDED MARCH 31,
1999 1998 --------- --------- Cash Flows From Operating Activities Net income (loss) $ 39,148 $ (43,704) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 191,864 217,888 Deferred rent (5,325) (6,107) Change in assets and liabilities: Accounts and contracts receivable (467,382) (301,278) Inventories (48,820) (418,886) Prepaid expenses and other assets (94,970) 23,477 Restricted cash - 400,390 Accounts payable 562,732 542,460 Accrued payroll 65,520 (753) Other current liabilities (347,938) (75,148) Income taxes payable 18,000 (400,426) --------- --------- Net cash (used in) operating activities (87,171) (62,087) Cash Flows From Investing Activities Capital expenditures (87,954) (253,200) --------- --------- Net cash (used in) investing activities (87,954) (253,200) Cash Flows From Financing Activities Borrowings on bank line-of-credit payable 250,000 1,907,232 Payments on bank line-of-credit payable (150,000) (1,095,859) Payments under factoring agreement - (362,868) Payments on long term debt (156,249) - Borrowings of long term debt - 8,930 Proceeds from exercise of stock options - 6,103 --------- --------- Net cash (used in) provided by financing activities (56,249) 463,538 Effect on cash from currency translation adjustment 24,149 - --------- --------- Net (decrease) increase in cash and cash equivalents (207,225) 148,251 Cash and cash equivalents - beginning of period 394,096 242,656 --------- --------- Cash and cash equivalents - end of period $ 186,871 $ 390,907 ========= ========= Supplemental Disclosures of Cash Flow Information Cash paid during the year for interest $ 62,871 $ 75,520 ========= ========= Cash paid during the year for income taxes $ 0 $ 0 ========= =========
The accompanying notes are an integral part of this statement. 5 OPTELECOM, INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 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 normally 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, 1998. 2. Line of Credit On May 13, 1999, the Company renewed, through May 31, 2000, its credit agreement with a bank whereby it may borrow up to $1,700,000 with interest at the bank's prime rate plus 1%. The total amount of the borrowing which may be outstanding at any given time is based on the sum of a percentage of certain eligible accounts receivable plus a percentage of qualifying inventory, with a maximum borrowing against inventory of $400,000. Also, the Company is to adhere to certain covenants, quarterly and at year-end. The amount available under the line-of-credit as of March 31, 1999 is $627,000, reflecting the balance of certain eligible receivables, as calculated under the old credit agreement, which expired May 13, 1999. 3. Inventory Inventory consisted of the following: March 31, 1999 March 31, 1998 -------------- -------------- Raw materials $ 796,140 $ 781,779 WIP 390,657 603,282 Finished goods 709,136 786,698 ---------- ---------- Total $1,895,933 $2,171,759 ========== ========== The Company had a reserve for inventory obsolescence of $414,135 at March 31, 1999 compared to $364,135 at March 31, 1998. 4. Comprehensive Income The Company's other comprehensive income consists only of foreign currency translation adjustments and is shown separately on the Company's Consolidated Balance Sheet. For the first quarter of 1999 and 1998, the total comprehensive income including net income (loss) and currency translation adjustments were $63,297 and $(43,704), respectively. 5. Earnings Per Share Basic earnings per share is computed using the weighted average number of common shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding and the treasury stock computation method for stock options. The following is a reconciliation of the basic and diluted earnings per share. 6 Quarter ended March 31, 1999 1998 ---------- ---------- Net Income (loss) $ 39,148 $ (43,704) ========== ========== Weighted average shares - basic 2,156,557 2,032,456 ---------- ---------- Earnings (loss) per share - basic $ 0.02 $ (0.02) ========== ========== Weighted average shares - basic 2,156,557 2,032,456 Effect of dilution - stock options 19,531 - ---------- ---------- Weighted average shares - diluted 2,176,088 2,032,456 ---------- ---------- Earnings (loss) per share - diluted $ 0.02 $ (0.02) ========== ========== 6. Segment Information Optelecom has three reportable segments: the Communication Products Division (CPD), the Government Products Division (GPD) and the Paragon Division. These segments reflect management's internal reportable information analysis and approximates the Company's strategic business units' financial results reported before income taxes.
Quarter Ended March 31, 1999 and 1998 (000's) Income (Loss) Gross Additions Revenues Before Income Taxes to Equipment -------- ------------------- ------------ 1999 1998 1999 1998 1999 1998 ------ ------ ------ ------ ------ ------ CPD - gross $2,183 $2,398 Intercompany (28) - ------ ------ CPD - net 2,155 2,398 $205 $(27) $88 $174 GPD 396 436 86 84 - 40 Paragon 978 1,547 (234) (120) - 39 ------ ------ ---- ----- --- ---- Total $3,529 $4,381 $ 57 $(63) $88 $253 ====== ====== ==== ===== === ====
7. New Accounting Pronouncements In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities." This statement requires companies to record derivatives on their balance sheet as assets or liabilities, measured at fair value. Gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of the derivative and whether it qualifies for hedging accounting. SFAS No. 133 will be effective for the Company's fiscal year ending December 31, 2000. The Company had no derivative or hedging activity in any of the periods presented. 8. Legal Proceedings See Part II - Other Information, Item 1 - Legal Proceedings, on page 11 for a discussion of the Company's litigation. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Except for the historical financial information contained herein, the following discussion and analysis may contain "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include declarations regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward looking statements are not guarantees of future performance and involve a number of risks and uncertainties; actual results could differ materially from those indicated by such forward looking statements. The following discussion should be read in conjunction with the Financial Statements and Notes thereto. 7 OVERVIEW Optelecom, Inc. designs, manufactures and markets video communication products, specializing in transmission and distribution equipment for the delivery of real time video. The Company's integrated video solutions include fiber optic transmission, UTP copper distribution, and digital video conversion and access products. From simple baseband transmitters and baluns to complex broadband systems and video distribution switches, Optelecom offers innovative technologies that meet its customers' needs. The Company is organized into three operating divisions: the Communications Products Division (CPD), which develops, manufactures, and sells optical fiber-based data communication equipment to the commercial marketplace, the Government Products Division (GPD) which is primarily focused on electro-optic technology development for government related defense business, and Paragon Audio Visual Ltd., (Paragon), located in the United Kingdom. Paragon, which was acquired at the end of 1997, is a wholly owned subsidiary of Optelecom, Inc. Paragon designs and markets electronic communication products and systems utilizing copper cabling as the transmission media. RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998 REVENUE Revenues recognized were $3,528,854 and $4,380,922 for the three months ended March 31, 1999 and 1998, respectively. The decrease of $(852,068), or 19%, was largely due to a reduction in sales for Paragon and Communication Products Division (CPD). Sales at Paragon were down approximately $569,000 or 37% from 1998. Changes in management during the first quarter had a negative impact on sales at Paragon. Sales in CPD were down approximately $243,000 in 1999 compared to 1998. The reduction in CPD sales was due to the loss of sales positions during the first quarter of 1999 that were replaced in the second quarter of 1999. GROSS PROFIT Gross profits for the three months ended March 31, 1999 and 1998 were $1,494,877 and $1,712,078, respectively. The decrease over 1998 was attributed to the decrease in revenues in the first quarter of 1999 compared to 1998. Gross margins as a percentage of revenues were 42% and 39% for the first quarters of 1999 and 1998, respectively. The improvement in gross margins for the first quarter of 1999 compared to 1998 is attributed primarily to product mix and margin improvements on CPD products offset by an increase in inventory reserves recorded in the first quarter of 1999. Approximately $50,000 in additional inventory reserves related to obsolescence of discontinued Paragon products was recorded during the first quarter of 1999. Gross margins for other product lines remained unchanged. ENGINEERING Engineering costs for the three months ended March 31, 1999 and 1998 were $353,200 and $403,044, respectively. Engineering costs as a percentage of revenues were 10% for the first quarter of 1999 and 9% for the first quarter of 1998. The decline in costs from 1998 is attributed to decreases in prototype materials and outside design consultants. The Company continues to focus on enhancements to core technologies by improvements in manufacturability combined with new feature enhancements. A new CCTV product line for CPD was introduced in January 1999 which rationalizes its product lines for its commercial products sector. The Company expended funds approximating $74,000 during the first quarter of 1999 as compared to $104,000 in 1998 related to research efforts for high speed optical components. 8 SELLING AND MARKETING Selling and marketing costs were $384,504 and $451,619 for the three months ended March 31, 1999 and 1998, respectively. The decrease of $67,115 in the first quarter of 1999 compared with the same period in 1998 is attributed to decreased costs from CPD having significantly fewer employees in its sales and marketing group during 1999 as compared to 1998. The Company recorded an additional $20,000 to increase the reserves for bad debt. GENERAL AND ADMINISTRATIVE General and administrative expenses were $638,740 and $814,112 for the first quarter 1999 and 1998, respectively. The decrease in expenses of $175,372 in the first quarter of 1999 compared to 1998 is attributed to an overall reduction in expenses, offset by an increase in amortization of intangibles acquired from Paragon. OTHER EXPENSES Other expenses for the three months ended March 31, 1999 and 1998 were $61,285 and $105,981, respectively. The decrease of $44,696 in 1999 compared with 1998 is attributed to a reduction in amortization of the goodwill from the Paragon acquisition. During the last quarter of 1998, substantially all the goodwill was reclassified to intangible assets employment agreements and written off to reflect the termination of the former Paragon individuals. INCOME TAXES An income tax provision of $18,000 was recorded during the first quarter of 1999 compared with income tax benefit of $18,974 for the first quarter of 1998. The effective tax rate during the first quarter of 1999 was 31% as compared to 30% in 1998. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1999, the Company had combined balances of cash and cash equivalents of $186,871 compared with $394,096 at December 31, 1998. Cash used in operating activities approximated $88,000 in 1999 and is primarily the result of its net loss adjusted for depreciation and amortization, increases in accounts receivables and offset by increases in current payables. Net cash of $244,203 was used for purchasing property and equipment and paying acquisition debt for Paragon. The Company continues to invest in capital equipment to support its employee and facility growth and its research and development and manufacturing activities. The Company has a working capital line-of-credit with a bank for an amount up to $1,700,000 with interest at the bank's prime rate plus one percent. The amount available on the line is based on a percentage of eligible receivables and inventory. The Company's future capital requirements depend on many factors, including continued research and development activities, competing technological and market developments and successful full integration of Paragon, its U.K. subsidiary. The Company expects to fund operations over the next 12 months from its available working capital line and operating cash flows. Company backlog at the end of March 31, 1999 was $989,643. 9 YEAR 2000 POTENTIAL ISSUES The Year 2000 is an issue because many computers, software and other devices with embedded technology use programs written using two digits rather than four to identify the applicable year and this may prevent them from accurately processing information with dates beyond 1999. This could result in system failures or miscalculations causing disruptions of operations, including, among other things, a temporary inability to manufacture products, acquire or ship inventory, process transactions or engage in other normal business activities. The Company has developed and is well into implementing a Company-wide Year 2000 plan to identify all systems which will require modification or replacement and to establish appropriate contingency plans to avoid an impact on the Company's ability to provide its products and services. This plan encompasses the Company's products, financial reporting and operating systems, external suppliers and facilities. The Company's plan includes a series of initiatives to ensure that all of the Company's computer equipment and software will function properly and includes broad identification, assessment, remediation and testing efforts. Based upon its inventory of systems and assessment efforts to date, the Company believes that certain of its computer equipment and software will require replacement or modification. In addition, in the ordinary course of business, the Company replaces computer equipment and software, and in so doing, seeks to acquire only Year 2000 compliant software and hardware. The Company believes that its planned modifications or replacements will be completed on a timely basis so as to avoid any disruptions or malfunctions due to any Year 2000 related problems. The Company has substantially completed its compliance review of virtually all of its products and has not learned of any products which it manufactures that will cease functioning or experience an interruption of operation as a result of the transition to the Year 2000. The Company is currently assessing the Year 2000 readiness of suppliers to determine the extent to which the Company may be vulnerable if those parties fail to properly identify and fix their own Year 2000 issues. The Company intends to monitor the progress made by reviewing key suppliers web pages for discussions of their Year 2000 readiness and by sending out letters in July to all suppliers requesting confirmation of their Year 2000 compliance. The costs of the plan are based on management's best estimates and are not expected to be material to the Company's financial condition. The Company's total cost of the Year 2000 plan, which will be funded through operating cash flow, line-of-credit borrowings and capital lease obligations are estimated to be approximately $500,000 of which $200,000 is anticipated to be spent on capital assets. These estimated costs include the internal costs, including training, and those of external resources to implement any new software needed to become Year 2000 compliant. The Company has spent approximately $25,000 at the end of the first quarter of 1999. Management believes, based on the information currently available to them, that the most likely worst case scenario would be: failure to be able to serve customers, increased operation costs due to manual processing, legal risks, including customer, supplier or shareholder lawsuits over failure to provide contracted services, product failures or heath and safety issues and inability to bill or invoice resulting in a loss of revenue. Although the Company believes that Year 2000 compliance will be achieved by December 31, 1999, there can be no assurance that the Year 2000 problem will not have a material adverse affect on the Company's business, financial condition and results of operations. 10 The Company's plan requires that contingency plans be developed and validated in the event that any critical system cannot be corrected and certified before the system's failure date. In many cases, the Company already has arrangements with suppliers of goods and services so that in the event a commitment is not met, a substitute is available to the Company. The Company is in the process of installing new enterprise-wide systems that are Year 2000 compliant. However, should this system not be in place and operating in time, the Company's contingency plan calls for the installation of Year 2000 compliant version upgrades from the suppliers of its current operating and financial systems. Final written agreements with these suppliers will be put in place in the third quarter. Some Year 2000 compliant hardware has been purchased during the first quarter 1999. The remainder of the hardware will be installed by the end of June. PARAGON OPERATIONS In December 1997 the Company acquired Paragon Audio Visual Limited ("Paragon"). The integration of Paragon proved to be costly in time and resources. As a result of the length of time to integrate the acquisition, the Paragon operation accumulated a loss of $3,000,718 during 1998, including employee severance charges and write-offs of intangibles acquired at the acquisition of Paragon. During 1998, the Company invested in Paragon an additional $790,000 to fund working capital requirements. At the end of 1998, the Chairman of Paragon was terminated. Subsequently, the remaining Directors of Paragon were terminated. Optelecom has named a new management team from existing Paragon employees that has significant experience in Paragon's markets and believes the operations will return to profitability during 1999 by materially reducing its overhead costs. Significant reductions include employee terminations, closing of its New York City office, elimination of company vehicles, travel and entertainment expenses. Sales for 1999 are expected to be lower than 1998 levels. However, there can be no assurance that profitability will, in fact, be achieved. With the acquisition of Paragon, the Company expects to expand its presence in international markets and may in the future derive an even more significant portion of its revenues from these markets. The Company's current and future international business activities are subject to a variety of potential risks, including political, regulatory and trade and economic policy risks. The Company will also be subject to the risks attendant to translations in foreign currencies. These factors could have a material adverse effect on the Company. PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS On March 18, 1999, David Brown, formerly Chairman and Marketing Director of Paragon Audio Visual Ltd., lodged an Originating Application with the Employment Tribunal of the United Kingdom in Reading, England. Mr. Brown alleges that Paragon dismissed Mr. Brown unlawfully and in breach of his alleged employment contract rights. He seeks an award of money in an unspecified amount. The Company filed its Notice of Appearance on April 12, 1999 asserting Mr. Brown's claims are without merit. The Company also believes that it may have counterclaims that may be asserted against Mr. Brown in this proceeding and is considering the assertion of such counter-claims. From time to time, the Company is involved in legal proceedings and litigation arising in the ordinary course of business. As of the date of this report, except as described above, the Company is not a party to any litigation or other legal proceeding that, in the opinion of management, could have a material adverse effect on the Company's business, financial condition or results of operations. 11 ITEM 2 - CHANGES IN SECURITIES None ITEM 3 - DEFAULTS UPON SENIOR SECURITIES None ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted during the first quarter of 1999 to a vote of security holders. ITEM 5 - OTHER INFORMATION None ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K None ITEM 11 - STATEMENT REGARDING COMPUTATION OF NET INCOME (LOSS) PER SHARE 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: May 14, 1999 ________________________________________ Edmund D. Ludwig, President and CEO Date: May 14, 1999 ________________________________________ Carole D. Argo, Chief Financial Officer 12 EX-27 2 FDS -- OPTELECOM
5 US$ 3-MOS DEC-31-1998 MAR-31-1999 1 186,871 0 2,080,465 (186,777) 1,895,933 5,044,393 3,535,588 (2,183,467) 8,923,808 3,857,540 0 0 0 64,697 4,105,029 8,923,808 3,528,854 3,528,854 2,033,977 2,033,977 0 0 54,094 57,148 18,000 0 0 0 0 39,148 0.02 0.02
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