-----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, CHKo+4rtYuigHIcKWYiPUK90Bwk2fsrUp0LJ5po/VdWGe4y5dQRHEcvfFtuYoAWD dhx9LqBDEPCdBOjgkiIbbA== 0000032312-01-500035.txt : 20010815 0000032312-01-500035.hdr.sgml : 20010815 ACCESSION NUMBER: 0000032312-01-500035 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMCEE BROADCAST PRODUCTS INC CENTRAL INDEX KEY: 0000032312 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 131926296 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-06299 FILM NUMBER: 1708422 BUSINESS ADDRESS: STREET 1: PO BOX 68 STREET 2: SUSQUEHANNA ST. EXTENSION WEST CITY: WHITE HAVEN STATE: PA ZIP: 18661-0068 BUSINESS PHONE: 570-443-9575 MAIL ADDRESS: STREET 1: PO BOX 68 CITY: WHITE HAVEN STATE: PA ZIP: 18661-0068 FORMER COMPANY: FORMER CONFORMED NAME: ELECTRONICS MISSILES & COMMUNICATIONS INC DATE OF NAME CHANGE: 19920703 10QSB 1 test.txt 1ST QUARTER OF FISCAL 2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended June 30, 2001 Commission file number 1-6299 EMCEE Broadcast Products, Inc. (Exact name of registrant as specified in its charter) Delaware 13-1926296 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) Registrant's telephone number, including area code: 570-443-9575 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 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: Common stock, $ .01-2/3 par value - 5,206,361 shares as of August 13, 2001. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES I N D E X PART I. FINANCIAL INFORMATION: PAGE (S) CONSOLIDATED BALANCE SHEETS - June 30, 2001 and March 31, 2001 3 CONSOLIDATED STATEMENTS OF LOSS - Three months ended June 30, 2001 and 2000 4 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - Three months ended June 30, 2001 5 CONSOLIDATED STATEMENTS OF CASH FLOW - Three months ended June 30, 2001 and 2000 6 - 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8 - 10 INDEPENDENT ACCOUNTANTS' REPORT 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS 12 - 15 PART II. OTHER INFORMATION: SIGNATURES 16 NOTE: Any questions concerning this report should be addressed to Ms. Kerry M. Turner, C.P.A, Controller/CFO. JUNE 30, 2001 MARCH 31, 2001 (Unaudited) ----------------------------------- LIABILITIES & SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 108,000 $ 108,000 Accounts payable 641,954 756,430 Accrued expenses: Payroll and related expenses 355,759 233,766 Other 610,956 608,113 Deposits from customers 693,941 914,796 --------- --------- TOTAL CURRENT LIABILITIES 2,410,610 2,621,105 --------- --------- LONG-TERM DEBT, net of current portions 1,916,359 1,028,488 --------- --------- SHAREHOLDERS' EQUITY: Common stock issued, $.01-2/3 par; authorized 9,000,000 shares; issued 5,206,361 and 4,406,361 shares for June 30, 2001 and March 31,2001, respectively 86,783 73,450 Additional paid-in capital 4,152,435 3,583,484 Retained earnings 3,324,555 3,512,795 --------- --------- 7,563,773 7,169,729 --------- --------- Less shares held in treasury at cost: 391,980 shares June 2001 and 396,880 shares March 2001 1,815,292 1,838,008 --------- --------- TOTAL SHAREHOLDERS' EQUITY 5,748,481 5,331,721 --------- --------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 10,075,450 $ 8,981,314 ========= ========= SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF LOSS THREE MONTHS ENDED JUNE 30, 2001 AND 2000 (Unaudited) THREE (3) MONTHS 06/30/01 06/30/00 ------------------------------- NET SALES $ 1,835,656 1,680,281 COST OF PRODUCTS SOLD 1,470,886 1,339,912 --------- --------- GROSS PROFIT 364,770 340,369 --------- --------- OPERATING EXPENSES: Selling expenses 232,148 254,079 General and Administrative 391,810 367,811 Research and development 87,930 118,444 --------- --------- TOTAL OPERATING EXPENSES 711,888 740,334 --------- --------- LOSS FROM OPERATIONS ( 347,118) ( 399,965) --------- --------- OTHER INCOME (EXPENSE) Interest expense ( 27,837) ( 30,370) Interest income 1,103 36,403 Other 90,612 ( 2,923) --------- --------- TOTAL OTHER INCOME 63,878 3,110 --------- --------- NET LOSS BEFORE INCOME TAXES ( 283,240) ( 396,855) INCOME TAX BENEFIT ( 95,000) ( 122,700) --------- --------- NET LOSS $( 188,240) $ ( 274,155) ========= ========= COMMON STOCK AND COMMON STOCK EQUIVALENT OUTSTANDING: Basic 4,137,138 4,035,184 --------- --------- Diluted 4,137,138 4,037,266 --------- --------- LOSS PER COMMON SHARE AND COMMON SHARE EQUIVALENT: Basic $ (.05) $ (.07) -- -- Diluted $ (.05) $ (.07) -- -- SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY THREE MONTHS ENDED JUNE 30, 2001 (Unaudited) ADDITIONAL COMMON STOCK PAID-IN RETAINED TREASURY STOCK SHARES AMOUNT CAPITAL EARNINGS SHARES AMOUNT TOTAL ---------------- ---------- -------- ---------------- --------- BALANCE - 3/31/01 4,406,361$73,450 $3,583,484 $3,512,795 396,880$(1,838,008)$5,331,721 COMMON STOCK ISSUED 800,000 13,333 586,667 600,000 TREASURY STOCK ISSUED (17,716) (4,900) 22,716 5,000 NET LOSS FOR THE PERIOD (188,240) (188,240) --------- ------ --------- --------- ------- -------- --------- BALANCE - 06/30/01 5,206,361$86,783 $4,152,435 $3,324,555 391,980$(1,815,292)$5,748,481 ========= ====== ========= ========= ======= ========= ========= SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS THREE (3) MONTHS ENDED JUNE 30, 2001 AND 2000 (Unaudited) THREE (3) MONTHS 06/30/01 06/30/00 ------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $( 188,240) $( 274,155) Adjustments: Depreciation 49,209 67,172 Amortization 7,167 Provision for doubtful accounts 12,000 12,000 Gain on sale of assets ( 88,300) Treasury stock issued for directors fees 5,000 (Increase) decrease in (net of effect of acquisition): Accounts receivable ( 114,707) ( 805,096) Inventories 32,283 ( 424,452) Prepaid expenses ( 130,739) ( 32,006) Income taxes refundable ( 95,000) Deferred income taxes ( 95,000) ( 28,000) Other assets ( 145,426) 13,382 Increase (decrease) in: Accounts payable ( 114,476) 155,953 Accrued expenses 124,836 158,812 Deposits from customers ( 220,855) 217,327 -------- --------- NET CASH USED IN OPERATING ACTIVITIES ( 867,248) (1,034,063) -------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant and equipment ( 13,632) Purchase of U. S. Treasury Bills ( 412,104) Proceeds from: Maturities of U.S. Treasury Bills 600,000 Sale of land 100,000 Purchase of Advanced Broadcast Systems, Inc. ( 500,000) Increase in restricted cash ( 100,000) ------- -------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 0 ( 325,736) ------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Payments on long-term debt (1,112,129) ( 26,400) Issuance of: Long-term debt 2,000,000 Common stock 600,000 Proceeds from line of credit borrowing 1,100,000 --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 1,487,871 1,073,600 --------- --------- NET INCREASE (DECREASE) IN CASH 620,623 ( 286,199) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 69,210 261,304 ------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 689,833 $( 24,895) ======= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest expense $ 17,443 $ 27,619 ======= ======== Fair value of assets acquired and liabilities assumed for purchase of Advanced Broadcast Systems, Inc.: Equipment $ 245,000 Inventory 178,568 Accounts receivable 90,595 Goodwill 200,505 Accounts payable ( 44,529) Accrued liabilities ( 20,139) Inter-company payables ( 150,000) -------- Cash paid $ 500,000 ======== SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The financial information presented as of any date other than March 31 has been prepared from the books and records of the Company without audit. Financial information as of March 31 has been derived from the audited financial statements of the Company, but does not include all disclosures required by generally accepted accounting principles. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly EMCEE Broadcast Products, Inc. and Subsidiaries' financial position, and the results of their operations and changes in cash flow for the periods presented. 2. The results of operations for the three-month periods ended June 30, 2001 and 2000 are not necessarily indicative of the results to be expected for the full year. 3. At June 30, 2001, cash equivalents included $538,000 invested in a money market portfolio. 4. INVENTORIES consisted of the following: June 30, 2001 March 31, 2001 (UNAUDITED) FINISHED GOODS $ 183,000 $ 433,000 WORK-IN-PROCESS $ 894,000 $ 731,000 RAW MATERIALS $1,689,000 $1,225,000 MANUFACTURED COMPONENTS $1,301,636 $1,710,919 --------- --------- $4,067,636 $4,099,919 ========= ========= Inventories are stated at the lower of standard cost, which approximates current actual cost (on a first-in, first-out basis) or market (net realizable value). 5. SEGMENT INFORMATION. The Company has two operating segments which manufacture and sell a variety of products; EMCEE and ABS. EMCEE manufactures principally multi-channel multipoint distribution service (MMDS) equipment. ABS manufactures medium to high power UHF television transmitters. The following is a summary of certain financial information relating to the two segments: June 30, 2001 June 30, 2000 Total Revenue by Segment: EMCEE $ 874,000 $1,531,000 ABS $ 962,000 $ 149,000 Operating Income (Loss) by Segment: EMCEE $ ( 529,000) $( 367,000) ABS $ 182,000 $( 33,000) Identifiable Assets by Segment: EMCEE $ 7,465,000 $ 9,535,000 ABS $ 2,165,000 $ 750,000 Corporate $ 445,000 $ 385,000 ---------- ---------- Total Assets $10,075,000 $ 10,670,000 ========== ========== Depreciation and Amortization by Segment: EMCEE $ 31,000 $ 47,000 ABS $ 25,000 $ 20,000 ------- ------- Total $ 56,000 $ 67,000 ======= ======== Capital Expenditures by Segment: EMCEE $ 14,000 The Company evaluates segment performance based on profit or loss from operations before interest, other income/expense and taxes. 6. LOSS PER SHARE. Basic loss per share is computed by dividing loss applicable to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share is similar to basic loss per share except that the weighted average of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. There were no dilutive potential common shares in the period ended June 30, 2001 because the assumed exercise of the options would be anti-dilutive. 7. DEFERRED TAX ASSET. The Company has recorded a deferred tax asset of $1,442,000. Realization is dependent on generating sufficient taxable income prior to expiration of the loss carryforwards. Although realization is not assured, management believes it is more likely than not that all of the deferred tax asset will be realized. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. 8. LONG-TERM DEBT. On June 7, 2001, the Company's indebtedness was refinanced with $1,500,00 and $500,000 term loans. The notes mature in 2016 and 2006, and require monthly payments of $15,214 and $10,379, respectively. Interest is calculated at 9% for the $500,000 term loan and 2.0% above the national prime rate for the $1,500,000 term loan. The interest rate of the $1,500,000 note adjusts every three years. These loans are collateralized by principally all assets of the Company and contain certain financial and restrictive covenants. In addition, both loans contain prepayment penalties. Principal repayment of the refinanced loans and other debt is as follows: 2002 $ 108,000 2003 149,000 2004 158,000 2005 173,000 2006 188,000 Thereafter 1,248,359 --------- $2,024,359 ========= 9. Issuance of shares: In June, 2001, the Company entered into two stock option agreements which were exercised and provided for the issuance of 800,000 shares of common stock at $.75 per share. Independent Accountants' Report Officers and Directors EMCEE Broadcast Products, Inc. We have reviewed the accompanying condensed consolidated balance sheet of EMCEE Broadcast Products, Inc. and subsidiaries as of June 30, 2001, and the related condensed consolidated statements of loss, stockholders' equity and cash flows for the three-months June 30, 2001 and 2000. These financial statements are the responsibility of the company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit con- ducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of EMCEE Broadcast Products, Inc. and subsidiaries as of March 31, 2001, and the related consolidated statements of loss, stockholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated June 26, 2001, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of March 31, 2001 is fairly stated, in all material respects to the consolidated balance sheet from which it has been derived. /s/ KRONICK KALADA BERDY & CO. Kingston, Pennsylvania August 9, 2001 SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Any statements contained in this report which are not historical facts are forwarding looking statements; and, therefore, many important facts could cause actual results to differ materially from those in the forward looking statements. Such factors include, but not limited to, changes (legislative, regulatory and otherwise) in the Multi-Chanel Multipoint Distribution Service (MMDS) or Low Power Television (LPTV) industries or medium to high definition television (HDTV) products, demand for the Company's products (both domestically and internationally), the development of competitive products, competitive pricing, the timing of foreign shipments, market acceptance of new product introductions (including, but not limited to, the Company's digital and internet products), technological changes, economic conditions, litigation and other factors, risks and uncertainties identified in the Company's Securities and Exchange Commission filings. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales for the first quarter of fiscal 2002 which ended June 30, 2001 totaled $1,835,000 for an increase of 9.2% over the first quarter of fiscal year 2001. Sales attributable to the subsidiary, Advanced Broadcast Systems, Inc. (ABS), which was acquired in April 2000, were $149,000 and $962,000 for the quarter ended June 30, 2000 and 2001, respectively. The improvement in ABS sales was partially offset by the decline in foreign sales. Foreign sales were $1,159,000 for the quarter ended June 30, 2000 compared with $318,000 for the quarter ended June 30, 2001. Sales to one Korean customer accounted for approximately 65% of foreign sales for the three months ended June 30, 2000. Certain accounts receivable arising from sales to this customer during fiscal 2000 and 2001, totaling approximately $1,370,000, are seriously past due. The Registrant is actively pursuing collection of these amounts. However, given the current financial difficulties of this customer, it is unlikely that future sales will approach volumes of the prior two years. For the last several years, foreign sales have been more than half of total sales for the Company. However, foreign sales have declined due primarily to the lack of continued business with the Korean customer and in part to international economic conditions and the strength of the U.S. dollar. Foreign sales for the first quarter of fiscal 2002, 2001 and 2000 comprised 17%, 69% and 56% of total sales, respectively. The following table illustrates foreign shipments by geographic area: QUARTER ENDING JUNE 30 REGION 2001 2000 1999 (000's omitted) Asia/Pacific Rim $ 5 $ 819 $ 141 Middle East - 8 157 South America 148 20 35 North America - 215 - Central America 12 10 16 Caribbean 96 4 72 Europe 51 43 23 Africa - 23 - Other 6 17 8 --- ---- --- $ 318 $1,159 $ 452 ========================= Based on customers with $2,500 or more of sales Management anticipates that domestic demand, especially for high power products, will be the significant component of sales for the next year or two years. Although first quarter of fiscal year 2002 showed an improvement in total sales, gross margin on sales remained constant at approximately 20% of sales. Margin on sales remains tight due to the market conditions for both our MMDS and Broadcast products. An industry wide slow down in both building and replacing systems has created a fiercely competitive market. Manufacturers and distributors continue to compromise profit to retain market share. Selling expenses for the quarters ended June 30, 2001 and 2000 were $232,000 and $254,000, respectively. The majority of this decline is due to the decrease in travel expenditures. During the first quarter of fiscal year 2001, approximately $30,000 was incurred for travel expenses in connection with the sale to the Korean customer. General and administrative expenses increased approximately 6.5% from $368,000 for the three months ended June 30, 2000 to $392,000 for the three months ended June 30, 2001. The significant portion of this increase is due to the additional legal fees incurred in connection with negotiations with the Company's former lender and legal fees in connection with the collection of the Korea receivable. Fees to board members also increased due to special meetings held during the quarter related to the new bank debt and stock option agreements. Research and development costs declined from $118,000 to $88,000 for the three months ended June 30, 2000 and 2001, respectively. The decline is due to the engineering department dedicating more hours to direct labor for routine product testing during the first quarter of this fiscal year. Overall, operating expenses declined from $740,000 to $711,000 for the quarters ended June 20, 2000 and 2001 respectively. Interest expense for the three months ended June 30, 2001 and June 30, 2000 was $28,000 and $30,000, respectively. Interest income declined significantly from $36,000 for the three months ended June 30, 2000 to $1,000 for the three months ended June 30, 2001. The reason for the decline is that investments in U.S. Treasury Bills and cash and cash equivalent balances were depleted during fiscal 2001 to meet operating needs. The increase in other income (expense)from $(3,000) for the three months ended June 30, 2000 to $91,000 is due to the sale of a non-operating asset for a net profit of approximately $88,000. Net loss before income tax benefits for the quarter ended June 30, 2001 totaled $283,000, which was reduced by a tax benefit of $95,000, thereby reducing the net loss to $188,000 or loss per common share outstanding of five cents. Net loss before income tax benefit for the first quarter ended June 30, 2000 was $397,000 which was reduced by a tax benefit of $123,000, thereby reducing the net loss to $274,000 or seven cents per common share outstanding. Financial Condition: Cash and cash equivalents increased from $69,000 as of March 31, 2001 to $689,833 as of June 30, 2001. In June 2001, the Company's indebtedness was refinanced. The refinancing net of fees, loan closing costs and debt reserve fund requirement of $100,000 provided a cash infusion of approximately $804,000. Additionally, in June the Company entered into two stock option agreements which were exercised and provided for the issuance of 800,000 shares of common stock at $.75 per share. A portion of the loan proceeds and proceeds from stock issuance were used to pay trade vendors. Net increase in cash and cash equivalents excluding the restricted balance is $620,000. Accounts receivable net of reserve for doubtful accounts increased from $1,628,000 at March 31, 2001 to $1,731,000 at June 30, 2001. As previously discussed, the Registrant continues to aggressively pursue collection of the balances due from the Korean customer. However, until such time as amounts are collected, receivable balances shall remain at higher levels. Prepaid expenses totaled $291,000 as of June 30, 2001, an increase of $130,000 over the balance as of March 31, 2001. The increase is due to advance payments made to trade vendors for inventory ordered for specific customer purchases. Land and land improvements decreased by $11,000 as approximately 6 acres of land was sold for $100,000 to provide cash to meet operating needs. Other assets increased from $2,398,000 at March 31, 2001 to $2,631,000 at June 30, 2001. The increase is due to additional deferred tax asset of $95,000 recorded during the first quarter of fiscal year 2002. Also contributing to the increase is approximately $86,000 in unamortized fees and costs associated with the refinancing of the Company's long-term debt. Accounts payable decreased approximately $114,000 from $756,000 at March 31, 2001 to $642,000 at June 30, 2001. Cash infusion from refinancing and proceeds from stock options provided the working capital to bring payments to vendors current. Payroll and related expenses increased approximately $122,000 from March 31, 2001 to June 30, 2001. Substantially all of this increase is due to the deferred compensation plan. In an effort to preserve cash, the Company initiated a deferred compensation plan whereby employees and directors were permitted to defer the payment of wages and fees in exchange for a premium interest paid on the amount deferred. At June 30, 2001, the wages and fees deferred including accrued interest were approximately $100,000. Customer deposits decreased from $915,000 at March 31, 2001 to $694,000 as of June 30, 2001. The decrease is largely due to the stage of contracts at month end and the extent of progress billing on long-term contracts. Long term debt increased approximately $900,000 as the Company refinanced its debt. On June 7, 2001, the Registrant entered into a guaranteed loan agreement with First Federal Bank of Hazleton and the United States Department of Agriculture Rural Development Division. The Registrant secured a $500,000 term loan and a $1,500,000 mortgage loan. Of the aggregate $2,000,000, approximately $1,035,000 was used to satisfy outstanding debt including approximately $25,000 in legal fees to First Union. One hundred thousand dollars ($100,000) is being held by First Federal in a debt reserve fund as cash collateral. Origination costs totaling $52,000 were paid to First Federal Bank and Rural Development. The remaining balance of $804,000 provided an infusion of cash to meet working capital demand. Shares of treasury stock decreased during the first quarter of fiscal 2002 by 4900 and a value of $22,716. These unregistered shares were issued to directors in lieu of cash for payment of directors fees. As previously discussed, during the first quarter 2002, the Company entered into two stock option agreements which were exercised and provided $600,000 in equity in exchange for 800,000 shares of common stock with a par value of $13,333. The back log of unsold orders for the Company totaled $1,552,000 as of June 30, 2001 compared to $2,047,000 as of March 31, 2001. Employment for the Company totaled 58 full-time employees and 2 part- time employees. PART II. OTHER INFORMATION 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 thereto duly authorized. EMCEE BROADCAST PRODUCTS, INC. Date: August 13, 2001 /s/ JAMES L. DeSTEFANO James L. DeStefano President/CEO Date: August 13, 2001 /s/ KERRY M. TURNER Kerry M. Turner, C.P.A. Controller/CFO -----END PRIVACY-ENHANCED MESSAGE-----