-----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, Us6tB+Ie7XbrynUkR97Rh7R6JOH0wEGOT2Gx57hBbyJIv4C4GgTMqzIbR6GmceYC 3PIRASdlJC2H99KtLqLNgg== 0000310056-96-000006.txt : 19960515 0000310056-96-000006.hdr.sgml : 19960515 ACCESSION NUMBER: 0000310056-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 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: 96564420 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 March 31, 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 March 31, 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 3/31/96 3/31/95 Net sales........................... $10,855,627 $10,952,150 Costs and expenses: Cost of goods sold................ 8,107,322 8,601,648 Selling, general & admin. expenses........................ 2,417,914 2,451,930 Interest expense.................. 184,967 253,974 Unrealized foreign exchange (gain) loss............ (5,012) 95,667 ----------- ----------- Total costs and expenses....... 10,705,191 11,403,219 Income (loss) before income taxes... 150,436 (451,069) Provision for income taxes.................... 25,000 16,000 ----------- ----------- Net income (loss)................... $ 125,436 $ (467,069) =========== =========== Net income (loss) per share $ .05 $ (.17) === === 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) Six Months Ended 3/31/96 3/31/95 Net sales........................... $21,368,095 $22,779,679 Costs and expenses: Cost of goods sold................ 15,914,178 17,731,056 Selling, general & admin. expenses........................ 4,775,855 4,830,051 Interest expense.................. 420,338 533,583 Unrealized foreign exchange (gain) loss............ (19,384) 95,667 ----------- ----------- Total costs and expenses....... 21,090,987 23,190,357 ----------- ----------- Income (loss) before income taxes... 277,108 (410,678) Provision for income taxes.................... 50,000 40,000 ----------- ----------- Net income (loss)................... $ 227,108 $ (450,678) =========== =========== Net income (loss) per share $ .08 $ (.16) === === 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) ASSETS 3/31/96 9/30/95 CURRENT ASSETS Cash............................................ $ 23,669 $ 1,151,850 Accounts receivable (less allowance of $306,000 at March 31, 1996 and $542,000 at September 30, 1995)............... 8,866,616 8,352,845 Other receivables............................... 228,335 261,864 Inventories: Parts, components, and materials.............. 1,331,736 1,594,462 Work-in-process............................... 2,545,726 1,686,287 Finished products............................. 9,731,287 8,831,852 ----------- ----------- 13,608,749 12,112,601 Prepaid expenses................................ 339,483 309,288 ----------- ----------- TOTAL CURRENT ASSETS............................ 23,066,852 22,188,448 - -------------------- Property, plant and equipment................... 13,412,378 13,222,497 Less: accumulated depreciation................. (10,281,832) (9,960,558) ----------- ----------- 3,130,546 3,261,939 Other assets.................................... 1,067,002 973,107 ----------- ----------- TOTAL ASSETS.................................... $27,264,400 $26,423,494 - ------------ =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Borrowings under revolving credit agreement..... $ 776,402 $ 906,955 Current maturities of long-term debt............ 209,172 220,739 Accounts payable: Related party................................. 7,318,362 6,895,073 Other......................................... 2,200,696 1,335,935 Accrued wages and expenses...................... 1,336,514 1,697,732 Income taxes payable............................ 127,912 78,583 Deferred gain on sale and leaseback............. 332,100 332,100 ------------ ----------- TOTAL CURRENT LIABILITIES 12,301,158 11,467,117 - ------------------------- Long-term debt: Related party................................. 2,270,331 2,437,259 Other......................................... 3,070,514 2,901,490 Deferred gain on sale and leaseback............. 267,944 433,993 Other long-term liabilities..................... 534,092 550,609 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............................. (356,681) (583,789) ------------ ----------- 9,068,091 8,840,983 Less Treasury stock 25,400 shares, at cost...... (82,901) (82,901) Foreign currency translation adjustment......... (164,829) (125,056) ------------ ----------- TOTAL SHAREHOLDERS' EQUITY 8,820,361 8,633,026 - -------------------------- ------------ ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...... $ 27,264,400 $26,423,494 - ------------------------------------------ ============ =========== See Notes to (Condensed) Consolidated Financial Statements. 4 VICON INDUSTRIES, INC. AND SUBSIDIARIES (CONDENSED) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended 3/31/96 3/31/95 Cash flows from operating activities: Net income (loss).............................. $ 227,108 $ (450,678) Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation and amortization................ 335,947 305,325 Amortization of sale and leaseback........... (166,050) (166,050) Unrealized foreign exchange (gain) loss...... (19,384) 95,667 Change in assets and liabilities: Accounts receivable.......................... (585,249) 1,873,040 Other receivables............................ 13,086 36,621 Inventories.................................. (1,538,560) 1,247,311 Prepaid expenses............................ (33,460) (78,185) Other assets................................. (93,895) 5,008 Accounts payable............................ 1,304,196 (1,132,578) Accrued wages and expenses................... (346,606) 109,274 Income taxes payable......................... 50,711 36,445 Other liabilities........................... (16,517) (37,774) --------- --------- Net cash (used in) provided by operating activities.................. (868,673) 1,843,426 --------- --------- Cash flows from investing activities: Capital expenditures, net of minor disposals........................... (249,979) (372,237) --------- ---------- Net cash used in investing activities.... (249,979) (372,237) --------- ---------- Cash flows from financing activities: Net borrowings under new credit and security agreement......................... 3,011,904 - Repayments of U.S. revolving credit agreement.................................. (2,800,000) (1,100,000) Decrease in borrowings under U.K. revolving credit agreement........................... (102,516) (451,935) Repayments of other debt..................... (203,965) (87,939) ---------- ---------- Net cash used in financing activities...... (94,577) (1,639,874) ---------- ---------- Effect of exchange rate changes on cash.......... 85,048 5,467 ---------- ---------- Net decrease in cash............................. (1,128,181) (163,218) Cash at beginning of year........................ 1,151,850 910,400 ---------- ---------- Cash at end of period............................ $ 23,669 $ 747,182 ========== ========== See Notes to (Condensed) Consolidated Financial Statements. 5 VICON INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO (CONDENSED) CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) March 31, 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 six months ended March 31, 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 March 31, 1996 Compared with March 31, 1995 Net sales for the quarter ended March 31, 1996 were approximately $10.9 million compared with $11.0 million in the corresponding quarter last year. The backlog of orders decreased $.5 million during the quarter to $2.8 million at March 31, 1996 due to lower order intake principally in the U.S. market. Gross profit margins for the current quarter were 25.3% compared with 21.5% 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 $2.4 million. Inflationary increases were offset by ongoing cost control measures. Interest expense decreased approximately $69,000 to $185,000 for the current year quarter due principally to a lower cost of borrowing. During the prior year quarter, the Company incurred an unrealized foreign exchange loss of approximately $96,000. This loss 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 $602,000 was principally due to increased gross profit margins on sales, lower interest expense and favorable foreign currency effects during the quarter. Results of Operations Six Months Ended March 31, 1996 Compared with March 31, 1995 Net sales for the six months ended March 31, 1996 were approximately $21.4 million compared with $22.8 million in the corresponding period last year. The decrease of 6.2% was principally due to lower European sales. Gross profit margins for the six months ended March 31, 1996 were 25.5% compared with 22.2% 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 six months ended March 31, 1996 were similar to last year at $4.8 million. Inflationary increases were offset by ongoing cost control measures. Interest expense decreased by approximately $113,000 to $420,000 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 $19,000 compared with a $96,000 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 $688,000 was principally due to increased gross profit margins on sales, lower interest expense and favorable foreign currency effects during the period. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS LIQUIDITY AND FINANCIAL CONDITION March 31, 1996 Compared with September 30, 1995 Working capital remained essentially the same at approximately $10.8 million at March 31, 1996. Accounts receivable increased approximately $.5 million to $8.9 million at March 31, 1996, principally as a result of slower receivable turnover. Inventories increased approximately $1.5 million to $13.6 million at March 31, 1996 due mainly to increased inventory levels of new products. Accounts payable increased approximately $1.3 million to $9.5 million at March 31, 1996 as a result of the increased 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 cash requirements. At March 31, 1996, borrowings under this agreement were approximately $776,000, which was used for general working capital purposes. 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 $3.0 million at March 31, 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 The Company's annual meeting was held on April 25, 1996. The following directors were elected at the meeting: Donald H. Horn Peter F. Barry Arthur D. Roche The terms of the following directors continued after the meeting: Kenneth M. Darby Milton F. Gidge Michael D. Katz Peter F. Neumann Kazuyoshi P. Sudo W. Gregory Robertson Arthur V. Wallace The matters voted upon at the meeting and the results of each vote are as follows: Nominees Withhold For Directors: For Authority Mr. Horn 2,572,982 39,317 Mr. Barry 2,282,775 329,524 Mr. Roche 2,572,332 39,967 Ratification of Auditors 2,589,541 19,925 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. May 9, 1996 VICON INDUSTRIES, INC. Kenneth M. Darby Arthur D. Roche President Executive Vice President Chief Executive Officer Chief Financial Officer 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. May 9, 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 6-MOS SEP-30-1996 SEP-30-1996 MAR-31-1996 MAR-31-1996 23,669 23,669 0 0 9,740,310 9,740,310 (305,876) (305,876) 13,608,749 13,608,749 23,066,852 23,066,852 14,479,380 14,479,380 (10,281,832) (10,281,832) 27,264,400 27,264,400 12,301,158 12,301,158 6,142,881 6,142,881 0 0 0 0 27,882 27,882 8,792,479 8,792,479 27,264,400 27,264,400 10,855,627 21,368,095 0 0 8,107,322 15,914,178 0 0 2,367,902 4,666,471 45,000 90,000 184,967 420,338 150,436 277,108 25,000 50,000 125,436 227,108 0 0 0 0 0 0 125,436 227,108 .05 .08 .05 .08
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