-----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, EytatuSwOmT6R0Rlj6VJMAXo9KqAiKAEPUvRhevw+hUUunXhUE4ck+wMFGXzDR4n R9Q/u2592PTdbOd/TFgEYA== 0000310056-96-000008.txt : 19960816 0000310056-96-000008.hdr.sgml : 19960816 ACCESSION NUMBER: 0000310056-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: VICON INDUSTRIES INC /NY/ CENTRAL INDEX KEY: 0000310056 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 112160665 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07939 FILM NUMBER: 96611459 BUSINESS ADDRESS: STREET 1: 525 BROAD HOLLOW RD CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 5162932200 MAIL ADDRESS: STREET 1: 525 BROAD HOLLOW ROAD CITY: MELVILLE STATE: NY ZIP: 11747 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 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. 1-7939 ------------------------- ------- VICON INDUSTRIES, INC. (Exact name of registrant as specified in its charter) NEW YORK STATE 11-2160665 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 525 Broad Hollow Road, Melville, New York 11747 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (516) 293-2200 (Former name, address, and fiscal year, if changed since last report) 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 At June 30, 1996, the registrant had outstanding 2,762,828 shares of Common Stock, $.01 par value. PART I - FINANCIAL INFORMATION VICON INDUSTRIES, INC. AND SUBSIDIARIES (CONDENSED) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended 6/30/96 6/30/95 Net sales........................... $10,901,705 $10,287,108 Costs and expenses: Cost of goods sold................ 8,166,548 8,039,902 Selling, general & admin. expenses........................ 2,474,716 2,534,706 Interest expense.................. 209,270 259,006 Unrealized foreign exchange gain................... (14,365) (6,021) ----------- ----------- Total costs and expenses....... 10,836,169 10,827,593 Income (loss) before income taxes... 65,536 (540,485) Provision for income taxes.................... 25,000 - ----------- ----------- Net income (loss)................... $ 40,536 $ (540,485) =========== =========== Net income (loss) per share $ .01 $ (.20) === === Weighted average number of shares used in computing net income (loss) per share 2,857,545 2,762,828 See Notes to (Condensed) Consolidated Financial Statements. 2 PART I - FINANCIAL INFORMATION VICON INDUSTRIES, INC. AND SUBSIDIARIES (CONDENSED) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Nine Months Ended 6/30/96 6/30/95 Net sales........................... $32,269,800 $33,066,787 Costs and expenses: Cost of goods sold................ 24,080,725 25,770,958 Selling, general & admin. expenses........................ 7,250,572 7,364,758 Interest expense.................. 629,608 792,588 Unrealized foreign exchange (gain) loss............ (33,749) 89,646 ----------- ----------- Total costs and expenses....... 31,927,156 34,017,950 ----------- ----------- Income (loss) before income taxes... 342,644 (951,163) Provision for income taxes.................... 75,000 40,000 ----------- ----------- Net income (loss)................... $ 267,644 $ (991,163) =========== =========== Net income (loss) per share: Primary $ .10 $ (.36) === === Fully diluted $ .09 $ (.36) === === Weighted average number of shares used in computing net income (loss) per share: Primary 2,788,299 2,762,828 Fully diluted 2,893,889 2,762,828 See Notes to (Condensed) Consolidated Financial Statements. 3 VICON INDUSTRIES, INC. AND SUBSIDIARIES (CONDENSED) CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS 6/30/96 9/30/95 CURRENT ASSETS Cash............................................ $ 39,786 $ 1,151,850 Accounts receivable (less allowance of $358,000 at June 30, 1996 and $542,000 at September 30, 1995)............... 9,054,343 8,352,845 Other receivables............................... 224,934 261,864 Inventories: Parts, components, and materials.............. 1,849,383 1,594,462 Work-in-process............................... 1,984,091 1,686,287 Finished products............................. 11,384,494 8,831,852 ----------- ----------- 15,217,968 12,112,601 Prepaid expenses................................ 378,253 309,288 ----------- ----------- TOTAL CURRENT ASSETS............................ 24,915,284 22,188,448 - -------------------- Property, plant and equipment................... 13,540,439 13,222,497 Less: accumulated depreciation................. (10,469,548) (9,960,558) ----------- ----------- 3,070,891 3,261,939 Other assets.................................... 1,032,342 973,107 ----------- ----------- TOTAL ASSETS.................................... $29,018,517 $26,423,494 - ------------ =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Borrowings under revolving credit agreement..... $ 897,569 $ 906,955 Current maturities of long-term debt............ 207,432 220,739 Accounts payable: Related party................................. 7,932,643 6,895,073 Other......................................... 2,520,948 1,335,935 Accrued wages and expenses...................... 1,166,469 1,697,732 Income taxes payable............................ 76,035 78,583 Deferred gain on sale and leaseback............. 332,100 332,100 ------------ ----------- TOTAL CURRENT LIABILITIES 13,133,196 11,467,117 - ------------------------- Long-term debt: Related party................................. 2,264,142 2,437,259 Other......................................... 4,016,548 2,901,490 Deferred gain on sale and leaseback............. 184,918 433,993 Other long-term liabilities..................... 519,433 550,609 SHAREHOLDERS' EQUITY Common stock, par value $.01.................... 27,882 27,882 Capital in excess of par value.................. 9,396,890 9,396,890 Accumulated deficit............................. (316,145) (583,789) ------------ ----------- 9,108,627 8,840,983 Less Treasury stock 25,400 shares, at cost...... (82,901) (82,901) Foreign currency translation adjustment......... (125,446) (125,056) ------------ ----------- TOTAL SHAREHOLDERS' EQUITY 8,900,280 8,633,026 - -------------------------- ------------ ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...... $ 29,018,517 $26,423,494 - ------------------------------------------ ============ =========== See Notes to (Condensed) Consolidated Financial Statements. 4 VICON INDUSTRIES, INC. AND SUBSIDIARIES (CONDENSED) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended 6/30/96 6/30/95 Cash flows from operating activities: Net income (loss).............................. $ 267,644 $ (991,163) Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation and amortization................ 516,834 494,607 Amortization of sale and leaseback........... (249,075) (249,075) Unrealized foreign exchange (gain) loss...... (33,749) 89,646 Change in assets and liabilities: Accounts receivable.......................... (747,546) 2,443,523 Other receivables............................ 36,930 77,901 Inventories.................................. (3,128,810) 855,550 Prepaid expenses............................ (70,221) (127,467) Other assets................................. (59,235) (48,732) Accounts payable............................ 2,232,871 607,823 Accrued wages and expenses................... (520,030) 153,664 Income taxes payable......................... (2,484) 1,813 Other liabilities........................... (31,176) (50,649) --------- --------- Net cash (used in) provided by operating activities.................. (1,788,047) 3,257,441 --------- --------- Cash flows from investing activities: Capital expenditures, net of minor disposals........................... (352,918) (439,444) --------- ---------- Net cash used in investing activities.... (352,918) (439,444) --------- ---------- Cash flows from financing activities: Net borrowings under new credit and security agreement......................... 3,976,344 - Repayments of U.S. revolving credit agreement.................................. (2,800,000) (1,500,000) Increase (decrease) in borrowings under U.K. revolving credit agreement................. 7,782 (85,923) Repayments of other debt..................... (201,758) (214,278) ---------- ---------- Net cash provided by (used in) financing activities...................... 982,368 (1,800,201) ---------- ---------- Effect of exchange rate changes on cash.......... 46,533 (98,978) ---------- ---------- Net (decrease) increase in cash.................. (1,112,064) 918,818 Cash at beginning of year........................ 1,151,850 910,400 ---------- ---------- Cash at end of period............................ $ 39,786 $1,829,218 ========== ========== Non-cash investing and financing activities: Capital lease obligations entered into....... $ - $ 178,151 See Notes to (Condensed) Consolidated Financial Statements. 5 VICON INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO (CONDENSED) CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 1996 Note 1: Basis of Presentation The accompanying unaudited (condensed) consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended June 30, 1996 are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the fiscal year ended September 30, 1995. 6 MANAGEMENT'S DISCUSSION AND ANALYSIS Results of Operations Three Months Ended June 30, 1996 Compared with June 30, 1995 Net sales for the quarter ended June 30, 1996 were approximately $10.9 million compared with $10.3 million in the corresponding quarter last year. The increase was principally due to higher international sales. The backlog of orders decreased $.3 million during the quarter to $2.5 million at June 30, 1996 due to lower order intake principally in the U.S. market. Gross profit margins for the current quarter were 25.1% compared with 21.8% in the corresponding quarter one year ago. The margin increase was due principally to a beneficial sales mix of products with higher margins such as control and certain new digital video products. Operating expenses for the current quarter were similar to last year at $2.5 million. Inflationary increases were offset by ongoing cost control measures. Interest expense decreased approximately $50,000 to $209,000 for the current year quarter due principally to a lower cost of borrowing. During the current quarter, the Company incurred an unrealized foreign exchange gain of approximately $14,000 compared with a $6,000 gain in the corresponding quarter last year. These gains resulted from the Company's revaluation of its yen denominated mortgage obligation into U.S. dollars. The increase in current quarter pretax income of approximately $606,000 was principally due to higher sales and gross profit margins on sales, lower interest expense and favorable foreign currency effects during the quarter. Results of Operations Nine Months Ended June 30, 1996 Compared with June 30, 1995 Net sales for the nine months ended June 30, 1996 were approximately $32.3 million compared with $33.1 million in the corresponding period last year. The decrease of 2.4% was principally due to lower European sales. Gross profit margins for the nine months ended June 30, 1996 were 25.4% compared with 22.1% in the corresponding period one year ago. The margin increase was due principally to a beneficial sales mix of products with higher margins such as control and certain new digital video products. Operating expenses for the nine months ended June 30, 1996 declined to $7.3 million from $7.4 million in the corresponding period last year due to ongoing cost control measures. Interest expense decreased by approximately $163,000 to $630,000 for the current period due principally to a lower cost of borrowing. During the current period, the Company incurred an unrealized foreign exchange gain of $34,000 compared with a $90,000 loss in the corresponding period last year. These gains and losses resulted from the Company's revaluation of its yen denominated mortgage obligation into U.S. dollars. The increase in current period pretax income of approximately $1.3 million was principally due to increased gross profit margins on sales, lower operating expenses, lower interest expense, and favorable foreign currency effects during the period. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS LIQUIDITY AND FINANCIAL CONDITION June 30, 1996 Compared with September 30, 1995 Working capital increased approximately $1.1 million to $11.8 million at June 30, 1996 principally as a result of increased bank borrowings used to finance higher inventory levels. Accounts receivable increased approximately $.7 million to $9.1 million at June 30, 1996, principally as a result of slower receivable turnover. Inventories increased approximately $3.1 million to $15.2 million at June 30, 1996 due mainly to increased inventory levels of new products. Accounts payable increased approximately $2.2 million to $10.5 million at June 30, 1996 to support the inventory levels. The Company has a revolving credit facility of 700,000 pounds sterling (approx. $1.1 million) in the U.K. to support local working capital requirements. At June 30, 1996, borrowings under this agreement were approximately $898,000. In December 1995, the Company repaid $2.8 million of bank debt with the proceeds of a new U.S. bank loan. The new two year loan agreement provides for maximum borrowings of $4,000,000, subject to an availability formula based on U.S. accounts receivable and inventories. Borrowings under such agreement amounted to approximately $4.0 million at June 30, 1996. Concurrent with the new loan agreement, the Company amended its $2,000,000 secured promissory note with Chugai Boyeki Co., Ltd., a related party, to defer all scheduled principal installments to July 1998. The Company believes that the new loan agreement and its other sources of credit provide adequate funding to meet its near term cash requirements. 8 PART II ITEM 1 - LEGAL PROCEEDINGS The Company has no material outstanding litigation. 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 No Form 8-K was required to be filed during the current quarter. 9 Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. August 13, 1996 VICON INDUSTRIES, INC. VICON INDUSTRIES, INC. Kenneth M. Darby Arthur D. Roche Kenneth M. Darby Arthur D. Roche President Executive Vice President Chief Executive Officer Chief Financial Officer 10 EX-27 2
5 3-MOS 9-MOS SEP-30-1996 SEP-30-1996 JUN-30-1996 JUN-30-1996 39,786 39,786 0 0 10,015,392 10,015,392 (357,862) (357,862) 15,217,968 15,217,968 24,915,284 24,915,284 14,572,781 14,572,781 (10,469,548) (10,469,548) 29,018,517 29,018,517 13,133,196 13,133,196 6,985,041 6,985,041 0 0 0 0 27,882 27,882 8,872,398 8,872,398 29,018,517 29,018,517 10,901,705 32,269,800 0 0 8,166,548 24,080,725 0 0 2,415,351 7,081,823 45,000 135,000 209,270 629,608 65,536 342,644 25,000 75,000 40,536 267,644 0 0 0 0 0 0 40,536 267,644 .01 .10 .01 .09
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