10QSB 1 draft.txt 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 September 30, 2002 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 - 4,876,951 shares as of November 13, 2002. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES I N D E X PART I. FINANCIAL INFORMATION: PAGE (S) CONSOLIDATED BALANCE SHEETS - September 30, 2002 and March 31, 2002 3 - 4 CONSOLIDATED STATEMENTS OF LOSS - Six months and three months ended September 30, 2002 and 2001 5 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - Six months ended September 30, 2002 6 CONSOLIDATED STATEMENTS OF CASH FLOWS - Six months ended September 30, 2002 and 2001 7 - 8 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 9 - 11 INDEPENDENT ACCOUNTANTS' REPORT 12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS 13 - 16 PART II. OTHER INFORMATION: REPORTS ON FORM 8-KSB 17 SIGNATURES 17 CERTIFICATE OF COMPLIANCE PURSUANT TO SARBANES-OXLEY ACT 18 NOTE: Any questions concerning this report should be addressed to Joan Pecora, Controller/CFO. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2002 AND MARCH 31, 2002 ASSETS Sept. 30, 2002 March 31, 2002 (Unaudited) Current Assets: Cash $ 500,809 $ 353,655 Accounts receivable, net of allowance for doubtful accounts Sept.-$1,305,000 March-$1,281,000 404,887 603,045 Costs and estimated earnings in excess of billing on uncompleted contracts 0 252,511 Inventories 3,070,943 3,113,284 Prepaid expenses 168,383 230,994 Income taxes refundable 0 569,581 ---------- ---------- Total Current Assets $4,145,022 5,123,070 ---------- ---------- Property, Plant and Equipment: Land and land improvements 235,142 235,142 Building 617,475 617,475 Machinery 2,180,262 2,180,262 ---------- ---------- 3,032,879 3,032,879 Less accumulated depreciation 2,657,822 2,595,866 ---------- ---------- 375,057 437,013 ---------- ---------- Other Assets 573,181 584,650 ---------- ---------- Note receivable, sale of license 563,000 555,000 Less deferred portion (563,000) (555,000) ---------- ---------- 0 0 ---------- ---------- TOTAL ASSETS $5,093,260 $6,144,733 ========== ========== EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2002 AND MARCH 31, 2002 LIABILITIES AND SHAREHOLDERS' EQUITY Sept. 30, 2002 March 31, 2002 (Unaudited) Current Liabilities: Current portion of long-term debt $ 149,000 $ 149,000 Accounts Payable 766,495 973,951 Accrued Expenses: Payroll and related expenses 123,691 232,679 Other 204,695 203,721 Billings in excess of costs and estimated earnings on uncompleted contracts 63,306 150,383 Deposits from customers 233,536 420,906 ---------- --------- Total current liabilities 1,540,723 2,130,640 ---------- --------- Long-term debt, net of current portion 1,699,120 1,771,465 --------- --------- Shareholders' equity: Common stock, $.01-2/3 par; authorized 9,000,000 shares; issued 5,206,361 shares for Sept. 30, 2002 and March 31, 2002 86,783 86,783 Additional paid in-capital 3,766,835 3,974,385 Deficit (581,316) (180,698) --------- --------- 3,272,302 3,880,470 --------- --------- Less shares held in treasury, at cost: 306,412 shares Sept. 2002 and 353,655 shares March 2002 1,418,885 1,637,842 --------- --------- Total Shareholders' Equity 1,853,417 2,242,628 --------- --------- TOTAL LIABILITIES AND EQUITY $ 5,093,260 $ 6,144,733 ========== ========== See notes to condensed consolidated financial statements. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF LOSS THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 30,2002 AND 2001 (Unaudited) SIX (6) MONTHS THREE (3) MONTHS 30-Sep-02 30-Sep-01 30-Sep-02 30-Sep-01 Net Sales $ 2,631,297 $ 3,083,686 $1,247,959 $ 1,248,030 Cost of Products Sold 1,851,368 2,811,846 752,006 1,340,960 --------- --------- --------- --------- Gross Profit 779,929 271,840 495,953 (92,930) ---------- --------- -------- --------- Operating Expenses: Selling 367,789 489,512 190,392 257,364 General and Administrative 637,159 718,064 346,149 337,254 Provision for Bad Debts 24,000 198,000 14,000 187,000 Research and development 74,280 165,637 36,024 77,707 --------- --------- -------- ------- Total Operating Expenses 1,103,228 1,571,213 586,565 859,325 --------- --------- -------- ------- Loss from Operations (323,299) (1,299,373) (90,612) (952,255) --------- --------- -------- ------- Other Income (Expense), net: Interest expense (86,913) (75,998) (43,047) (48,161) Interest income 3,358 6,263 1,889 5,160 Other 6,236 91,795 361 1,183 --------- --------- -------- -------- Total Other Income (Expense) (77,319) 22,060 (40,797) (41,818) -------- --------- -------- -------- Loss before income taxes (400,618) (1,277,313) (131,409) (994,073) Income tax (expense) 0 (1,347,000) 0 (1,442,000) --------- --------- -------- --------- NET LOSS ($400,618)($2,624,313) ($131,409)($2,436,073) ======== ========= ======= ========= Basic loss per share ($0.08) ($0.59) ($0.03) ($0.51) ==== ==== ==== ==== Weighted average shares of common stock outstanding 4,871,424 4,476,231 4,880,130 4,811,637 See notes to condensed consolidated financial statements. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY SIX (6) MONTHS ENDED SEPTEMBER 30, 2002 (Unaudited) Additional Retained Common Stock paid-in Earnings Shares Amount Capital (Deficit) Balance, March 31, 2002 5,206,361 $ 86,783 $ 3,974,385 $ (180,698) Treasury stock issued (207,550) Net loss for the period (400,618) -------- ------- --------- ------- Balance, Sept. 30, 2002 5,206,361 $ 86,783 $ 3,766,835 $ (581,316) ========= ====== ========= ======= CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Cont'd) Treasury Stock Shares Amount Total Balance, March 31, 2002 353,655 ($1,637,842) $2,242,628 Treasury stock issued (47,243) 218,957 $11,407 Net loss for the period $400,618 ------- ---------- --------- Balance, Sept. 30, 2002 306,412 ($1,418,885) $1,853,417 ======= ========= ========= See notes to condensed consolidated financial statements. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX (6) MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Unaudited) SIX (6) MONTHS 30-Sep-02 30-Sep-01 Cash flows from Operating Activities: Net loss $(400,618) ($2,624,313) Adjustments: Depreciation 61,956 98,418 Amortization 9,060 17,212 Gain on sale of assets, net 0 (88,300) Provision for doubtful accounts 24,000 198,000 Treasury stock issued for directors fees and vacation pay 11,407 14,500 Change in assets and liabilities: (Increase) decrease in: Accounts receivable 174,158 (29,633) Costs and estimated earnings in excess of billings on uncompleted contracts 252,511 0 Inventory 42,341 92,317 Prepaid expenses 62,611 (51,232) Income taxes refundable 569,581 0 Deferred income taxes 0 1,347,000 Other assets 2,409 37,281 Increase (decrease) in: Accounts payable (207,456) 60,824 Accrued expenses (108,014) 23,892 Billings in excess of costs and estimated earnings on uncompleted contracts (87,077) 0 Deposits from customers (187,370) (312,438) ---------- --------- Net cash provided by (used in) operating activities 219,499 (1,216,472) ---------- ---------- Cash flows from investing accounts: Proceeds from: Sale of land 0 100,000 Increase in restricted cash 0 (100,000) --------- ---------- Net cash provided by investing activities 0 0 --------- ----------- Cash flows from financing activities: Proceeds from issuance of: Long-term debt 0 2,000,000 Common stock, net 0 577,900 Payments on long-term debt (72,345) (1,145,500) ---------- ---------- Net cash provided by (used in) financing activities (72,345) 1,432,400 ---------- ---------- Net increase in cash 147,154 215,928 Cash, beginning 353,655 69,210 --------- ---------- Cash, ending $500,809 $285,138 ========= ========== Supplemental disclosures of cash flow information: Cash paid (refunded) during the year for: Interest $86,913 $64,498 Income taxes ($569,581) $ 0 See notes to condensed consolidated financial statements. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES NOTES TO CONDENSED 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, including 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 six-month periods ended September 30, 2002 and 2001 are not necessarily indicative of the results to be expected for the full year. 3. INVENTORIES consisted of the following: Sept. 30, 2002 March 31, 2002 (Unaudited) Finished goods $ 393,486 $ 404,000 Work-in-process $ 456,229 $ 627,000 Raw materials $ 739,908 $ 624,000 Manufactured components $1,481,320 $1,458,284 --------- --------- $3,070,943 $3,113,284 ========= ========= 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). 4. 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: Sept. 30, 2002 Sept. 30, 2001 ------------------------------------------ Total Revenue by Segment: EMCEE $1,758,992 $ 1,282,000 ABS $ 872,305 $ 1,802,000 Operating Income (Loss) by Segment: EMCEE $( 417,749) $(1,522,000) ABS $ 94,450 $ 223,000 Identifiable Assets by Segment: EMCEE $4,282,280 $ 5,529,000 ABS $ 615,000 $ 1,000,000 Corporate $ 195,980 $ 445,000 ---------- ---------- Total Assets $5,093,260 $ 6,974,000 ========= ========== Depreciation and Amortization by Segment: EMCEE $ 41,000 $ 65,000 ABS $ 30,000 $ 51,000 ------- ------- Total $ 71,000 $ 116,000 ======= ======== Capital Expenditures by Segment: EMCEE $ 0 $ 14,000 The Company evaluates segment performance based on profit or loss from operations before interest, other income/expense and taxes. 5. 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 periods ended September 30, 2002 or September 30, 20001 because the assumed exercise of the options would be anti-dilutive. 6. INCOME TAX. The Company has established a valuation allowance for deferred income taxes. A valuation allowance is required when it is more likely than not that some portion of the deferred tax asset will not be realized. Realization is dependent on generating sufficient future taxable income. INDEPENDENT ACCOUNTANTS' REPORT Officers and Directors EMCEE Broadcast Products, Inc. We have reviewed the accompanying condensed consolidated financial statements of EMCEE Broadcast Products, Inc. and subsidiaries as listed in the accompanying index at September 30, 2002 and for the periods ended September 30, 2002 and 2001. 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 conducted 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 reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. 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, 2002, 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 6, 2002, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph concerning matters that raise substantial doubt about the Company's ability to continue as a going concern. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of March 31, 2002 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 October 30, 2002 SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Any statements contained in this report that are not historical facts are forward-looking statements. Many important factors could cause actual results to differ materially from those in the forward looking statements. Such factors include, but are not limited to, changes (legislative, regulatory and otherwise) in the Multichannel Multipoint Distribution Service (MMDS), 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(both foreign and domestic), 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 second quarter of fiscal 2003, which ended September 30, 2002, were $1,248,000, the same as net sales for the second quarter of fiscal 2002. Sales for the six months ended September 30, 2002 and 2001 were $2,631,000 and $3,084,000 respectively. Sales attributable to the subsidiary, Advanced Broadcast Systems (ABS,) were $872,000 (33.2%) and $1,802,000 (58.4%) for the six months ended September 30, 2002 and 2001, respectively. Foreign sales were $228,000 for the second quarter of fiscal 2003 and $318,000 for the six months ended September 30, 2002. $197,000 of these sales was a shipment to one customer in Mexico. Foreign sales were $170,000 for the second quarter of fiscal 2002 and $489,000 for the six months ended September 30, 2001. Foreign sales continue to decline primarily due to international economic conditions and the credit worthiness of our historical customer base. Foreign sales for the six months ended September 30, 2002, 2001, and 2000 comprised 12%, 16% and 61% of total sales, respectively. The Company continued to lay the groundwork for sales opportunities both within and outside of our historical customer base. The Company continues to solicit broadcasters for DTV (digital television) equipment but remains skeptical of improving conditions. The MMDS (Multichannel Multipoint Distribution Service) market shows signs of improvement domestically. MMDS orders and inquiries for product have risen. We continue to work diligently to uncover every opportunity domestically and have taken a cautionary approach on the international side due to creditworthiness of interested buyers. Gross profit equaled $780,000 or 29.6% of net sales for the six months ended September 30, 2002 compared to $272,000 or 8.8% of sales for the six months ended September 30, 2001. Gross profit for the second quarter of fiscal 2003 was $496,000 or 39.7% of sales compared to a loss of $93,000 or (7.4%) for the second quarter of fiscal 2002. Total operating expenses were $1,103,000 for the six months ended September 30, 2002, a decrease of $468,000 from the six months ended September 30, 2001. This decrease is composed of $122,000 in selling expenses, $81,000 in general and administrative expenses and $91,000 in research and development. A large portion of this reduction is due to the ongoing cost cutting measures implemented over the past nine months. Additionally, during the six months ended September 30, 2001, the reserve for doubtful accounts was increased $198,000 due to concern over the collection of accounts receivable of a Korean and a Brazilian customer. Although both these accounts have been fully reserved prior to the close of fiscal 2002, collection efforts continue. During the six months ended September 30, 2002, the reserve for doubtful accounts was increased by $24,000 to allow for incidental collection problems. As a result of the above, loss from operations improved to ($323,000) or (12.3%) of sales for the six months ended September 30, 2002 from ($1,299,000) or (42.1%) of sales for the six months ended September 30, 2001. Interest expense, net increased from $69,000 for the six months ended September 30,2001 to $84,000 for the six months ended September 30, 2002, due to increased indebtedness. Other income decreased $85,000 from the first six months of fiscal year 2002 to the first six months of fiscal year 2003. In the first quarter of fiscal year 2002, a non-operating asset was sold at a profit of approximately $88,000. Net loss before income taxes for the second quarter of fiscal 2003 was $131,000 compared to a net loss before income taxes of $994,000 for the second quarter of 2002. Net loss before income taxes for the six months ended September 30, 2002 was $401,000 compared to a net loss before income taxes of $1,277,000 for the six months ended September 30, 2001. During the second quarter of 2002, a valuation allowance was established for deferred income taxes because of the likelihood that these tax benefits would expire before the Company would have the opportunity to use them. Therefore, no income tax impact was recorded for the six months ended September 30, 2002, and the net loss of the period remained $401,000. During the six months ended September 30, 2001, the creation of the valuation allowance required the reversal of previously recorded tax benefits of $1,347,000 increasing the net loss for that period to $2,624,000. Financial condition: Cash increased from $353,655 as of March 31, 2002 to $500,809 as of September 30, 2002. The change is due to the receipt of a $570,000 income tax refund and the timing of cash receipts and disbursements. Accounts receivable net of reserve for doubtful accounts decreased from $603,000 at March 31, 2002 to $405,000 at September 30, 2002. During the year ended March 31, 2002, specific reserves were established against two foreign customers - a Korean customer who is in default of a settlement agreement and a Brazilian customer who has not adhered to the payment terms of a payment restructuring agreement. Although these accounts have been fully reserved against, the Company is considering its options to recover monies due. Revenues from long-term contracts are recorded on the basis of the estimated percentage of completion of individual contracts determined under the cost-to- cost method. As of March 31, 2002, the Company recorded an asset of $253,000 for cost and estimated earnings in excess of billing and a liability of $150,000 for billing in excess of costs and estimated earnings. At September 30, 2002, the Company had one contract that was accounted for using this method. Since this customer's deposits exceeded estimated billings, no asset and a liability of $63,000 were recorded. Inventories decreased from $3,113,000 at March 31, 2002 to $3,071,000 at September 30, 2002, a $42,000 decrease. Prepaid expenses totaled $168,000 as of September 30, 2002, a decrease of $63,000. The decrease was primarily due to shipping and invoicing an OEM part that had required a vendor deposit during the period ended March 31, 2002. Accounts Payable decreased approximately $208,000 from $974,000 at March 31, 2002 to $766,000 at September 30, 2002. Accrued Expenses decreased $108,000 over the same time period. During the first six months of fiscal 2003, the Company used an income tax refund of $570,000 to bring vendor liabilities closer to normal credit terms. Customer deposits decreased from $421,000 at March 31, 2002 to $234,000 as of September 30, 2002. The decrease is due to the stage of contracts at month end and the decrease in the backlog of unsold orders. On June 7, 2001, the Company entered into a loan agreement with First Federal Bank in the aggregate amount of $2,000,000, 80% of which is guaranteed by the United States Department of Agriculture Rural Development Division. This agreement consists of a $500,000 equipment loan and a $1,500,000 term loan. Of the aggregate $2,000,000, approximately $1,115,000 was used to satisfy outstanding debt to the Company's former lender. The remainder was used as working capital. The mortgage loan matures in 2016 and requires monthly payments of $15,214. The term loan matures in 2006 and requires monthly payments of $10,379. These loans are collateralized by all assets of the Company and contain certain financial and other covenants. At September 30, 2002, the Company was in violation of the debt/tangible net worth ratio. The bank waived this covenant violation. Shares of treasury stock decreased during the first six months of fiscal 2003 by 47,243 and a value, net, of $11,000. These unregistered shares were issued to directors in lieu of cash for payment of directors' fees and 3 employees in lieu of vacation pay. The backlog of unsold orders for the Company totaled $973,000 as of September 30, 2002, compared to $2,097,000 as of March 31, 2002. Employment for the Company totaled 40 full-time employees at its facilities in Pennsylvania and Kentucky as of September 30, 2002. The Registrant continues to have limited ability to secure additional funds from debt or equity transactions. This, along with depressed market conditions, has created a level of doubt concerning the Company's ability to continue as a going concern. The Company has implemented and continues to implement plans to attempt to increase revenue by (i) marketing excess capacity in the Company's machine shop, (ii) attempting to secure repair orders for competitors' transmitters and affiliated equipment, such as beam-benders, up and down converters, encoders and amplifiers, (iii) initiating a program to expand the Company's transmitter frequency from 2.5GHz to 3.5 GHZ, of which the first sale will ship in November of 2002, (iv) increasing the company's in-house sales force. The Company also continues to implement plans to reduce its monthly "cash burn" rate by (i) improved purchasing management, (ii) re-establishing favorable vendor relations by using an income tax refund of $570,000 to reduce accounts payable to within normal credit terms, (iii) utilizing engineering talent to redesign product to take advantage of in-house inventory, and (iv) eliminating or minimizing extraneous expenses. In addition to the foregoing, the Company is exploring the possibility of merging with a complementary company and raising investment capital within the investment community. The Company has signed non-disclosure agreements with three companies (two of which are public) paving the way for merger discussions. At this time, however, management has no ability to assess the viability of these initiatives or the likelihood of their success to enable the Company to continue as a going concern. Controls and Procedures: The Company carried out an evaluation of the effectiveness of its disclosure controls and procedures within 90 days prior to the filing of this report. This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's President and Chief Executive Officer and the Chief Financial Officer. Based on that evaluation, the Company's President and Chief Executive Officer and the Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective. There have not been any significant changes in the Company's internal controls, or in other factors which would significantly affect internal controls subsequent to the date the Company carried out its evaluation, or any corrective actions taken with regard to significant deficiencies or material weaknesses. PART II. OTHER INFORMATION ITEM 6. REPORTS ON FORM 8-K 1. A Form 8-K was filed with the Securities and Exchange Commission on July 18, 2002 to announce the resignation of Robert G. Nash as Vice President of the Company effective July 11, 2002. Mr. Nash's status change is related to the Company's re-organization plans. 2. A Form 8-K was filed with the Securities and Exchange Commission on September 11, 2002 to announce that the Company had received a Nasdaq Staff Determination indicating that the Company failed to comply with the minimum bid price/net tangible assets/shareholders' equity/market value of listed securities/net income requirements for continued listing, and its securities were subject to delisting from The Nasdaq SmallCap Market. The Company further announced that it had requested an oral hearing before the Nasdaq Listing Qualifications Panel to review the Staff Determination; that hearing date was set for September 27, 2002. 3. A Form 8-K was filed with the Securities and Exchange Commission on September 11, 2002 to announce the election of Joan H. Pecora as Controller/Chief Financial Officer of the Company effective immediately. In addition, subsequent to the quarter ended September 30, 2002, the following Form 8-K's were filed with the Securities and Exchange Comission: A Form 8-K was filed on October 30, 2002 to announce that the Company had been notified by The Nasdaq Stock Market's Listing Qualifications Panel that it had determined to delist the Company's securities (ticker: ECIN) with the opening of business on October 29, 2002. The Company stated it was currently making arrangements to be listed on the Over-The-Counter Bulletin Board (OTCBB). A Form 8-K was filed on November 6, 2002 to announce that the Company had signed non-disclosure agreements with three companies (two of which are public), paving the way for merger discussions. 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: November 14, 2002 /s/ Richard J. Nardone RICHARD J. NARDONE President/CEO Date: November 14, 2002 /s/ Joan Pecora JOAN PECORA Controller/CFO CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of EMCEE Broadcast Products, Inc. and subsidiaries (the "Company") on Form 10-QSB for the period ending September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I Richard J. Nardone, Chief Executive Officer of the Company, and Joan Pecora, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ RICHARD J. NARDONE Richard J. Nardone President/Chief Executive Officer /s/ JOAN PECORA Joan Pecora Controller Dated: November 14, 2002