0000310056-95-000007.txt : 19950815 0000310056-95-000007.hdr.sgml : 19950815 ACCESSION NUMBER: 0000310056-95-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 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: 95562905 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 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, 1995 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, 1995, 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 ------------------ 6/30/95 6/30/94 ------- ------- Net sales....................... $10,287,108 $12,005,256 Costs and expenses: Cost of goods sold............ 8,039,902 9,263,496 Selling, general & admin. expenses.................... 2,534,706 2,515,369 Interest expense.............. 259,006 184,889 Unrealized foreign exchange gain............... (6,021) - ----------- ----------- Total costs and expenses... 10,827,593 11,963,754 ----------- ----------- Income (loss) before income taxes................ (540,485) 41,502 Provision for income taxes................ - 10,000 ----------- ----------- Net income (loss)............... $ (540,485) $ 31,502 =========== =========== Net income (loss) per share $ (.20) $ .01 ====== ===== Shares outstanding 2,762,828 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 ------------------ 6/30/95 6/30/94 ------- ------- Net sales....................... $33,066,787 $35,948,363 Costs and expenses: Cost of goods sold............ 25,770,958 27,983,840 Selling, general & admin. expenses.................... 7,364,758 7,485,820 Interest expense.............. 792,588 506,824 Unrealized foreign exchange loss (gain)........ 89,646 (23,041) ----------- ----------- Total costs and expenses... 34,017,950 35,953,443 ----------- ----------- Loss before income taxes........ (951,163) (5,080) Provision for income taxes................ 40,000 22,000 ----------- ----------- Net loss........................ $ (991,163) $ (27,080) =========== =========== Net loss per share $ (.36) $ (.01) ====== ====== Shares outstanding 2,762,828 2,762,828 See Notes to (Condensed) Consolidated Financial Statements.
- 3 - VICON INDUSTRIES, INC. AND SUBSIDIARIES (CONDENSED) CONSOLIDATED BALANCE SHEETS --------------------------------------- (UNAUDITED)
6/30/95 9/30/94 ------- ------- ASSETS ------ CURRENT ASSETS -------------- Cash................................. $ 1,829,218 $ 910,400 Accounts receivable (less allowance of $530,000 at June 30, 1995 and $309,000 at September 30, 1994).... 7,301,703 9,733,383 Other receivables.................... 223,647 301,548 Inventories: Parts, components, and materials... 1,831,269 2,458,840 Work-in-process.................... 1,740,541 1,267,344 Finished products.................. 9,052,353 9,739,832 ----------- ----------- 12,624,163 13,466,016 Prepaid expenses..................... 450,831 322,953 ----------- ----------- TOTAL CURRENT ASSETS................. 22,429,562 24,734,300 -------------------- Property, plant and equipment........ 13,105,617 12,476,239 Less: accumulated depreciation...... (9,793,560) (9,296,420) ----------- ----------- 3,312,057 3,179,819 Other assets......................... 991,839 943,107 ----------- ----------- TOTAL ASSETS......................... $26,733,458 $28,857,226 =========== ===========
- 4 - VICON INDUSTRIES, INC. AND SUBSIDIARIES (CONDENSED) CONSOLIDATED BALANCE SHEETS --------------------------------------- (UNAUDITED)
6/30/95 9/30/94 ------- ------- LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES ------------------- Borrowings under revolving credit agreement.......................... $ 856,469 $ 936,466 Current maturities of long-term debt. 3,751,165 1,260,158 Accounts payable: Related party...................... 6,847,476 5,711,951 Other.............................. 1,286,299 1,812,756 Accrued wages and expenses........... 1,445,219 1,289,511 Income taxes payable................. 33,066 32,270 Deferred gain on sale and leaseback.. 332,100 332,100 ----------- ----------- TOTAL CURRENT LIABILITIES 14,551,794 11,375,212 ------------------------- Long-term debt: Related party...................... 2,007,673 2,332,632 Other.............................. 121,102 3,726,270 Deferred gain on sale and leaseback.. 517,018 766,093 Other long-term liabilities.......... 563,838 614,487 SHAREHOLDERS' EQUITY -------------------- Common stock, par value $.01......... 27,882 27,882 Capital in excess of par value....... 9,396,890 9,396,890 Retained (deficit) earnings.......... (227,907) 763,256 ----------- ----------- 9,196,865 10,188,028 Less Treasury stock 25,400 shares, at cost............................ (82,901) (82,901) Foreign currency translation adjustment......................... (141,931) (62,595) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 8,972,033 10,042,532 -------------------------- ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............................ $26,733,458 $28,857,226 =========== =========== See Notes to (Condensed) Consolidated Financial Statements
- 5 - VICON INDUSTRIES, INC. AND SUBSIDIARIES (CONDENSED) CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------------------- (UNAUDITED)
Nine Months Ended ----------------- 6/30/95 6/30/94 ------- ------- Cash flows from operating activities: Net loss..................................... $ (991,163) $ (27,080) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization.............. 494,607 537,947 Amortization of deferred gain on sale and leaseback....................... (249,075) (249,075) Unrealized foreign exchange loss (gain) 89,646 (23,041) Change in assets and liabilities: Accounts receivable.......................... 2,443,523 250,446 Other receivables............................ 77,901 246,207 Inventories.................................. 855,550 (2,577,992) Prepaid expenses............................. (127,467) (136,219) Other assets................................. (48,732) (289,893) Accounts payable............................. 607,823 28,008 Accrued wages and expenses................... 153,664 (53,496) Income taxes payable......................... 1,813 1,427 Other liabilities............................ (50,649) (23,568) ----------- ----------- Total adjustments........................... 4,248,604 (2,289,249) ----------- ----------- Net cash provided by (used in) operating activities................... 3,257,441 (2,316,329) ----------- ----------- Cash flows from investing activities: Capital expenditures, net of minor disposals. (439,444) (514,351) ----------- ----------- Net cash used in investing activities.......... (439,444) (514,351) ----------- ----------- Cash flows from financing activities: Increase in UK bank and other borrowings..... - 777,358 Issuance of promissory note to related party.............................. - 2,000,000 Repayments of revolving credit borrowings and other debt.................. (1,800,201) (607,390) ----------- ----------- Net cash (used in) provided by financing activities................................... (1,800,201) 2,169,968 Effect of exchange rate changes on cash........ (98,978) 6,625 ----------- ----------- Net increase (decrease) in cash................ 918,818 (654,087) Cash at beginning of year...................... 910,400 1,039,113 ----------- ----------- Cash at end of period.......................... $ 1,829,218 $ 385,026 =========== =========== Non cash investing and financing activities: Capital lease obligations entered into....... $ 178,151 $ - See Notes to (Condensed) Consolidated Financial Statements.
- 6 - VICON INDUSTRIES, INC. AND SUBSIDIARIES --------------------------------------- NOTES TO (CONDENSED) CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) --------------------------------------------------------------------------- June 30, 1995 -------------- 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, 1995 are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 1995. 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, 1994. - 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- Financial Condition and Changes Thereto at June 30, 1995 and September 30, 1994 ---------------------------------------- Working capital declined by approximately $5.5 million to $7.9 million at June 30, 1995. The decline in working capital resulted from the current classification of $3.0 million of borrowings under the U.S. revolving credit agreement which expires in October 1995, the repayment of $1.5 million of borrowings under such agreement and current period operating losses. Accounts receivable decreased approximately $2.4 million to $7.3 million at June 30, 1995. The decline was principally the result of lower sales. Inventories decreased $.8 million to $12.6 million at June 30, 1995. Inventories declined throughout the period as the Company sold certain products which had high inventory levels at September 30, 1994. Accounts payable - related party increased $1.1 million to $6.8 million at June 30, 1995 due to the further extension of interest bearing payment terms by a related party to meet financing needs not provided by bank lines of credit. Accounts payble - other decreased by $.5 million to $1.3 million due primarily to the change in sourcing of certain product purchases to the related party above. The Company maintains a line of credit of 700,000 pounds sterling (approximately $1,050,000) in the U.K. to support local operating cash requirements. Borrowings under this line decreased approximately $80,000 to $856,000 at June 30, 1995 as Vicon's U.K. subsidiary inventory levels declined during the period. At June 30, 1995, the Company was not in compliance with certain financial covenants of its revolving credit agreement which was subsequently waived by the banks. In connection with the granting of this waiver, the Company paid the banks $200,000 and reduced the revolving credit line to $2.8 million. The Company is no longer in the process of seeking financing with alternative lenders and is discussing with its current lenders a new credit agreement. - 8 - Results of Operations --------------------- Three Months Ended June 30, 1995 compared with June 30, 1994 -------------------------------------------------------------- Net sales for the quarter ended June 30, 1995 were approximately $10.3 million compared with $12.0 million in the corresponding quarter last year. This decrease of 14.3% was due to lower sales in both the United States and abroad. The backlog of orders increased by $1.0 million during the quarter to $2.7 million at June 30, 1995 due to increased order intake for both domestic and European markets. Gross profit margins for the current quarter were 21.8% compared with 22.8% in the corresponding quarter one year ago. The margin decline was due principally to the unfavorable impact of lower sales in relation to fixed overhead costs. Operating expenses for the current quarter were comparable to last year at $2.5 million. Included in the current quarter was an additional provision for bad debts of $150,000 required as a result of certain customer bank- ruptcies. Interest expense increased by $74,000 to $259,000 for the current year quarter as a result of higher interest rates. During the current quarter, the Japanese yen remained fairly steady versus the U.S. dollar resulting in a small foreign exchange gain of $6,000 from the revaluation of a yen denominated mortgage obligation. The increase in the pretax loss of $582,000 was due mainly to reduced sales, higher interest costs and the additional provision for bad debts. Nine Months Ended June 30, 1995 compared with June 30, 1994 ------------------------------------------------------------ Net sales for the nine months ended June 30, 1995 were $33.1 million, a decrease of 8.0% compared with $35.9 million for the comparable period last fiscal year. The shortfall was due principally to lower sales in the U.S. The gross margin was 22.1% compared with 22.2% in the corresponding period last year. This slight margin decline was principally the result of the unfavorable impact of lower sales in relation to fixed overhead costs, offset in part by higher margins on U.S. produced products sold in Europe. Operating expenses were $7.4 million for the current period compared to $7.5 million last fiscal year. This decrease related primarily to ongoing cost reduction efforts. Interest expense increased by $286,000 to $793,000 due to higher interest rates. Since the beginning of the fiscal year, the Japanese yen has appreciated significantly versus the U.S. dollar resulting in a foreign exchange loss of $90,000 from the revaluation of a yen denominated mortgage obligation. Last year, the yen depreciated against the dollar resulting in a foreign exchange gain of $23,000. The increase in the pretax loss of $946,000 was the result of lower sales, higher interest costs, higher foreign currency losses and the additional provision for bad debts referred to in the quarter commentary above. - 9 - 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 ------ ------------------------------- See "Management's Discussion and Analysis of Financial Condition" for information regarding certain loan covenant matters. 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. - 10 - 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, 1995 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 - 11 - 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. May 11, 1995 ---------------------- VICON INDUSTRIES, INC. ----------------------- ---------------------- Kenneth M. Darby Arthur D. Roche President Executive Vice President Chief Executive Officer Chief Financial Officer - 12 - EX-27 2
5 3-MOS 9-MOS SEP-30-1995 SEP-30-1995 JUN-30-1995 JUN-30-1995 1,829,218 1,829,218 0 0 8,505,773 8,505,773 (529,592) (529,592) 12,624,163 12,624,163 22,429,562 22,429,562 14,097,456 14,097,456 (9,793,560) (9,793,560) 26,733,458 26,733,458 14,551,794 14,551,794 3,209,631 3,209,631 27,882 27,882 0 0 0 0 8,944,151 8,944,151 26,733,458 26,733,458 10,287,108 33,066,787 0 0 8,039,902 25,770,958 0 0 2,333,685 7,169,404 195,000 285,000 259,006 792,588 (540,485) (951,163) 0 40,000 (540,485) (991,163) 0 0 0 0 0 0 (540,485) (991,163) (.20) (.36) (.20) (.36)