-----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, JI7NO8LftLW8ITNbBAxo5rxv4UdHgxj9SV7rCNfRiITQzDltOnmhz0xyp+IoQlIZ Kj3J9sXAXCmJm0hbuw1+tw== 0000310056-97-000004.txt : 19970222 0000310056-97-000004.hdr.sgml : 19970222 ACCESSION NUMBER: 0000310056-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970213 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: 97529091 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 December 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 December 31 1996, the registrant had outstanding 2,777,328 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 12/31/96 12/31/95 Net sales........................... $11,297,775 $10,512,468 Costs and expenses: Cost of goods sold................ 8,116,967 7,806,854 Selling, general & admin. expenses........................ 2,721,195 2,357,942 Interest expense.................. 263,948 235,372 Unrealized foreign exchange gain................... (33,623) (14,372) ----------- ----------- Total costs and expenses....... 11,068,487 10,385,796 Income before income taxes.......... 229,288 126,672 Provision for income taxes.................... 14,000 25,000 ----------- ----------- Net income.......................... $ 215,288 $ 101,672 =========== =========== Net income per share $ .08 $ .04 === === Weighted average number of shares outstanding and equivalent shares 2,870,000 2,763,000 See Notes to (Condensed) Consolidated Financial Statements. 2 VICON INDUSTRIES, INC. AND SUBSIDIARIES (CONDENSED) CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS 12/31/96 9/30/96 CURRENT ASSETS Cash............................................ $ 124,994 $ 205,876 Accounts receivable (less allowance of $449,000 at December 31, 1996 and $396,000 at September 30, 1996)............... 8,800,449 8,635,020 Other receivables............................... 69,058 71,819 Inventories: Parts, components, and materials.............. 2,808,332 2,175,408 Work-in-process............................... 2,384,297 1,391,552 Finished products............................. 10,475,281 11,135,798 ----------- ----------- 15,667,910 14,702,758 Prepaid expenses................................ 601,902 529,631 ----------- ----------- TOTAL CURRENT ASSETS............................ 25,264,313 24,145,104 - -------------------- Property, plant and equipment................... 13,751,068 13,640,198 Less: accumulated depreciation................. (10,675,885) (10,606,013) ----------- ----------- 3,075,183 3,034,185 Other assets.................................... 919,055 905,327 ----------- ----------- TOTAL ASSETS.................................... $29,258,551 $28,084,616 - ------------ =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Borrowings under revolving credit agreement..... $ 1,262,092 $ 959,583 Current maturities of long-term debt............ 393,989 203,719 Accounts payable: Related party................................. 7,331,514 7,457,482 Other......................................... 1,861,218 1,811,730 Accrued wages and expenses...................... 1,464,496 1,229,087 Income taxes payable............................ 108,770 87,205 Deferred gain on sale and leaseback............. 90,783 332,100 ------------ ----------- TOTAL CURRENT LIABILITIES 12,512,862 12,080,906 - ------------------------- Long-term debt: Related party................................. 1,923,989 2,262,005 Other......................................... 4,917,678 4,166,881 Deferred gain on sale and leaseback............. - 101,893 Other long-term liabilities..................... 489,640 504,776 SHAREHOLDERS' EQUITY Common stock, par value $.01.................... 28,027 28,027 Capital in excess of par value.................. 9,423,089 9,423,089 Accumulated deficit............................. (68,323) (283,611) ------------ ----------- 9,382,793 9,167,505 Less Treasury stock 25,400 shares, at cost...... (82,901) (82,901) Foreign currency translation adjustment......... 114,490 (116,449) ------------ ----------- TOTAL SHAREHOLDERS' EQUITY 9,414,382 8,968,155 - -------------------------- ------------ ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...... $ 29,258,551 $28,084,616 - ------------------------------------------ ============ =========== See Notes to (Condensed) Consolidated Financial Statements. 3 VICON INDUSTRIES, INC. AND SUBSIDIARIES (CONDENSED) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended 12/31/96 12/31/95 Cash flows from operating activities: Net income................................... $ 215,288 $ 101,672 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization.............. 183,127 164,207 Amortization of sale and leaseback......... (343,210) (83,025) Unrealized foreign exchange gain........... (33,623) (14,372) Change in assets and liabilities: Accounts receivable........................ (29,940) 45,762 Other receivables............................ 2,761 10,586 Inventories.................................. (819,790) (591,402) Prepaid expenses............................ (57,163) (60,592) Other assets................................. (13,728) (51,194) Accounts payable............................ (107,485) 1,721,152 Accrued wages and expenses................... 217,849 (377,884) Income taxes payable......................... 13,844 26,912 Other liabilities........................... (15,136) (14,246) --------- --------- Net cash (used in) provided by operating activities.................. (787,206) 877,576 --------- --------- Cash flows from investing activities: Capital expenditures, net of minor disposals........................... (102,286) (74,136) --------- ---------- Net cash used in investing activities.... (102,286) (74,136) --------- ---------- Cash flows from financing activities: Net borrowings under new credit and security agreement......................... 767,426 1,882,078 Repayments of U.S. revolving credit agreement.................................. - (2,800,000) Increase (decrease) in borrowings under U.K. revolving credit agreement................ 302,509 (69,556) Repayments of other debt..................... (158,425) (178,639) ---------- ---------- Net cash provided by (used in) financing activities.................... 911,510 (1,166,117) ---------- ----------- Effect of exchange rate changes on cash.......... (102,900) 36,027 ---------- ---------- Net decrease in cash............................. (80,882) (326,650) Cash at beginning of quarter..................... 205,876 1,151,850 ---------- ---------- Cash at end of period............................ $ 124,994 $ 825,200 ========== ========== See Notes to (Condensed) Consolidated Financial Statements. 4 VICON INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO (CONDENSED) CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) December 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 three months ended December 31, 1996 are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 1997. 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, 1996. 5 MANAGEMENT'S DISCUSSION AND ANALYSIS Results of Operations Three Months Ended December 31, 1996 Compared with December 31, 1995 Net sales for the quarter ended December 31, 1996 were approximately $11.3 million compared with $10.5 million in the corresponding quarter last fiscal year. The increase was due principally to sales of the Company's new Aurora digital video product line. The backlog of orders increased $1.4 million to $4.4 million at December 31, 1996. Gross profit margins for the quarter increased to 28.2% compared with 25.7% in the corresponding quarter one year ago. The margin improvement was due principally to increased sales of higher margin products, particularly new proprietary digital video products. The Company's video product margins also rose principally as a result of cost reductions. Operating expenses for the current quarter increased to $2.7 million compared with $2.4 million in the corresponding quarter last year due principally to higher selling expenses. Interest expense increased by approximately $29,000 to $264,000 for the current year quarter as the level of bank borrowings increased. During the quarter, the Company recorded an unrealized foreign exchange gain of $34,000 compared with a $14,000 gain in the corresponding quarter last year. This gain resulted from the Company's revaluation of its yen denominated mortgage obligation into U.S. dollars as the value of the British pound sterling gained against the Japanese yen during the period. The increase in pretax income of $103,000 was due principally to higher sales and gross margins, offset in part by increased operating expenses. 6 MANAGEMENT'S DISCUSSION AND ANALYSIS LIQUIDITY AND FINANCIAL CONDITION December 31, 1996 Compared with September 30, 1996 Working capital increased $.7 million to $12.8 million at December 31, 1996 principally as a result of increased bank borrowings, which were used to finance higher inventory levels. Accounts receivable increased $.2 million to $8.8 million at December 31, 1996 due principally to higher sales levels. Inventories increased $1.0 million to $15.7 million at December 31, 1996 as a result of increased component part and work-in-process inventories related to the production of a new dome camera product line. Total accounts payable remained principally unchanged at approximately $9.2 million at December 31, 1996 since inventory increases were financed through additional bank borrowings and operating profits. The Company has a revolving line of credit of 700,000 pounds sterling (approx. $1.2 million) in the U.K. to support local cash requirements. At December 31, 1996, borrowings under this agreement were approximately $1,262,000, which was used for general working capital purposes. The Company's bank loan agreement provides for maximum borrowings of $5.5 million subject to an availability formula based on accounts receivable and inventories and expires in December 1997. Borrowings under such agreement amounted to approximately $4.9 million at December 31, 1996 compared with $4.1 million at September 30, 1996. The increase was used principally to finance the higher inventory levels. In February 1997, the loan agreement was amended to increase maximum borrowings to $6.5 million. Further, the term of the agreement was extended to January 31, 1999 and the interest rate was reduced from 1.25% to 1% over the prime rate. Concurrent with this amendment, the Company amended its $2,000,000 secured promissory note with Chugai Boyeki Co., Ltd., a related party, to require installments of $200,000 upon execution, $360,000 in July 1998 and the balance of $1,440,000 upon expiration in July 1999. The Company believes that its bank loan agreements and other sources of credit provide adequate funding to meet its near term cash requirements. 7 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. 8 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. February 13, 1997 VICON INDUSTRIES, INC. Kenneth M. Darby Arthur D. Roche President Executive Vice President Chief Executive Officer Chief Financial Officer 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. February 13, 1997 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 9 EX-27 2
5 3-MOS SEP-30-1997 DEC-31-1996 124,994 0 9,920,877 (449,468) 15,667,910 25,264,313 14,670,123 (10,675,885) 29,258,551 12,512,862 7,331,307 0 0 28,027 9,386,355 29,258,551 11,297,775 0 8,116,967 0 2,642,572 45,000 263,948 229,288 14,000 215,288 0 0 0 215,288 .08 .08
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