-----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, IJ4GnJcp9aeA+vpq0btV4WvlbblybynMdgJIuSrC6NABzjPtifFoNVhXN7HVK1Lz BQazv1LS31vBpiAXgO8L0g== 0000032312-99-000009.txt : 19990813 0000032312-99-000009.hdr.sgml : 19990813 ACCESSION NUMBER: 0000032312-99-000009 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990812 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: SEC FILE NUMBER: 001-06299 FILM NUMBER: 99684834 BUSINESS ADDRESS: STREET 1: P O BOX 68 STREET 2: SUSQUEHANNA STREET EXTENSION WEST CITY: WHITE HAVEN STATE: PA ZIP: 18661-0068 BUSINESS PHONE: 7174439575 MAIL ADDRESS: STREET 1: P O BOX 68 STREET 2: SUSQUEHANNA STREET EXTENSION CITY: WHITE HAVEN STATE: PA ZIP: 18661 FORMER COMPANY: FORMER CONFORMED NAME: ELECTRONICS MISSILES & COMMUNICATIONS INC DATE OF NAME CHANGE: 19920703 10QSB 1 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, 1999 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 - 3,982,397 shares as of August 5, 1999. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES I N D E X PAGE(S) PART I. FINANCIAL INFORMATION: CONSOLIDATED BALANCE SHEETS - June 30, 1999 and March 31, 1999 3 CONSOLIDATED STATEMENTS OF INCOME (LOSS) - Three Months ended June 30, 1999 and 1998 4 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - Three Months ended June 30, 1999 5 CONSOLIDATED STATEMENTS OF CASH FLOWS - Three Months ended June 30, 1999 and 1998 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8 - 11 PART II. OTHER INFORMATION: SIGNATURES 12 NOTE: Any questions concerning this report should be addressed to Mr. Allan J. Harding, Vice President-Finance.
PART I. FINANCIAL INFORMATION EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - JUNE 30, 1999 and MARCH 31, 1999 - JUNE 30, 1999 MARCH 31,1999 Unaudited ======================================== ASSETS CURRENT ASSETS: Cash and cash equivalents $1,303,356 $1,572,423 U. S. Treasury Bills 1,783,484 1,775,933 Accounts receivable, net of allowance for doubtful accts.June -$44,000/ March-$35,000 476,746 603,248 Inventories 3,502,569 3,522,579 Prepaid expenses 609,162 660,842 Deferred income taxes 111,000 132,000 ---------------------------------- TOTAL CURRENT ASSETS 7,786,317 8,267,025 ---------------------------------- PROPERTY, PLANT & EQUIPMENT: Land & land improvements 246,841 246,841 Building 617,670 617,670 Machinery & equipment 2,024,529 2,017,084 ---------------------------------- 2,889,040 2,881,595 Less accumulated depreciation 2,217,013 2,150,315 ---------------------------------- NET PROPERTY, PLANT & EQUIPMENT 672,027 731,280 ---------------------------------- OTHER ASSETS 493,649 492,149 ---------------------------------- NOTE RECEIVABLE 515,000 510,000 Less deferred portion (515,000) (510,000) ----------------------------------- 0 0 ----------------------------------- TOTAL ASSETS $8,951,993 $9,490,454 =================================== LIABILITIES & SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $119,000 $119,000 Accounts payable 27,995 288,029 Accrued expenses 305,909 297,754 Deposits from customers 106,355 76,745 ----------------------------------- TOTAL CURRENT LIABILITIES 559,259 781,528 ----------------------------------- LONG-TERM DEBT, net of current portion 633,422 649,287 ----------------------------------- SHAREHOLDERS' EQUITY: Common stock issued, $.01-2/3 par; authorized 9,000,000 shares; issued-4,384,161 shares 73,084 73,084 Additional paid-in capital 3,502,092 3,502,092 Retained earnings 6,044,787 6,345,114 ----------------------------------- 9,619,963 9,920,290 Less shares held in treasury at cost: 401,764 shares June '99 and Mar '99 1,860,651 1,860,651 ----------------------------------- TOTAL SHAREHOLDERS' EQUITY 7,759,312 8,059,639 ----------------------------------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $8,951,993 $9,490,454 =================================== SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (LOSS) THREE MONTHS ENDED JUNE 30, 1999 AND 1998 (Unaudited) ============================= THREE (3) MONTHS 06/30/99 06/30/98 ============================= NET SALES $812,425 $2,198,765 COST OF PRODUCTS SOLD 705,012 1,542,337 ----------------------------- GROSS PROFIT 107,413 656,428 ----------------------------- OPERATING EXPENSES: Selling 229,892 323,216 General and administrative 225,677 262,508 Research and development 76,485 100,279 ----------------------------- TOTAL OPERATING EXPENSES 532,054 686,003 ----------------------------- LOSS FROM OPERATIONS (424,641) (29,575) ----------------------------- OTHER INCOME (EXPENSE), NET: Interest expense (18,864) (17,507) Interest income 40,335 61,435 Other 4,693 7,621 ------------------------------ TOTAL OTHER INCOME, NET 26,164 51,549 ------------------------------ Net income (loss) before income taxes (398,477) 21,974 INCOME TAX EXPENSE (BENEFIT) (98,150) 5,500 ------------------------------ NET INCOME (LOSS) $(300,327) $16,474 ============================== COMMON SHARE AND COMMON SHARE EQUIVALENT OUTSTANDING: Basic 3,982,397 4,039,880 ============================== Diluted 3,982,397 4,039,880 ============================== EARNINGS (LOSS) PER COMMON AND COMMON SHARE EQUIVALENT: Basic $(.08) Nil ============================== Diluted $(.08) Nil ============================== SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY THREE MONTHS ENDED JUNE 30, 1999 (Unaudited) ADDDITIONAL COMMON STOCK PAID-IN RETAINED TREASURY STOCK SHARES AMOUNT CAPITAL EARNINGS SHARES AMOUNT TOTAL ===================================================================== == BALANCE - 3/31/99 4,384,161 $73,084 $3,502,092 $6,345,114 401,764($1,860,651) $8,059,639 NET LOSS FOR THE PERIOD (300,327) (300,327) ---------- --------- BALANCE 6/30-/99 4,384,161 $73,084 $3,502,092 $6,044,787 401,764 ($1,860,651)$7,759,312 ======================================================================= SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS THREE (3) MONTHS ENDED JUNE 30, 1999 AND 1998 (Unaudited) THREE (3) MONTHS 6/30/99 06/30/98 ======================== CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $(300,327) $16,474 Adjustments: Depreciation 66,698 72,510 Provision for doubtful accounts 9,000 (11,500) (Increase) decrease in: Accounts receivable 117,502 (309,099) Inventories 20,010 (93,386) Prepaid expenses 51,680 20,053 Deferred income taxes 21,000 (22,000) Other assets (1,500) (76,863) Increase (decrease) in: Accounts payable (260,034) (99,345) Accrued expenses 8,155 31,721 Deposits from customers 29,610 (1,517) Accrued federal income taxes (3,110) ------------------------ NET CASH USED IN OPERATING ACTIVITIES (238,206) (476,062) ------------------------ CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant and equipment (7,445) (59,989) Purchase of U. S. Treasury Bills (607,551) (1,101,425) Proceeds from maturities of US Treasury Bills 600,000 1,100,000 ------------------------ NET CASH USED IN INVESTING ACTIVITIES (14,996) (61,414) ------------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long term debt (15,865) (15,828) Acquisition of company stock 0 (122,260) ------------------------ NET CASH USED IN FINANCING ACTIVITIES (15,865) (138,088) ------------------------ NET DECREASE IN CASH (269,067) (675,564) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR $1,572,423 2,529,594 ------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,303,356 $1,854,030 ========================= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period: Interest Expense $13,839 $11,687 ========================= Income Taxes $0 $0 =========================
[FN] SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. [FN] 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 ofthe 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 period ended June 30, 1999 and 1998 are not necessarily indicative of the results to be expected for the full year. 3. At June 30, 1999, cash equivalents included $943,830 invested in a money market portfolio. 4. INVENTORIES consisted of the following: June 30,1999 March 31, 1999 (UNAUDITED) FINISHED GOODS $242,000 $266,000 WORK-IN-PROCESS $677,000 $686,000 RAW MATERIALS $1,042,000 $1,008,000 MANUFACTURED COMPONENTS $1,541,569 $1,562,579 -------------------------------- $3,502,569 $3,522,579 ================================ 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. INCOME (LOSS) PER SHARE. Basic income (loss) per share is computed by dividing earnings (loss) applicable to common shareholders by the weighted average number of common shares outstanding. Diluted income (loss) per share is similar to basic income (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, 1999 and 1998 because the assumed exercise of the options would be anti-dilutive. The number of options and warrants that could potentially dilute basic earnings (loss) per share that have been excluded from the computation of diluted earnings (loss) per share were 315,200 at June 30, 1999 and 1998. EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS The sales decline that started in the Registrant's third quarter of the last fiscal year has continued into the first quarter ended June 30, 1999 for both domestic and foreign sales. Net sales for the first quarter ended June 30, 1999 totaled $812,000, a decrease of 63% compared to net sales of $2,199,000 for the quarter ended June 30, 1998. Domestic sales for the quarter ended June 30, 1999 totaled $360,000 or 44% of shipments compared to sales of $1,326,000 (60% of total sales) for the period one year ago as virtually no new Multichannel Multipoint Distribution Services("MMDS") are being built. Domestic sales for the quarter are primarily for Internet systems, low power or replacement transmitters. Export sales for the quarter ended June 30, 1999 totaled $452,000 or 56% of shipments and were down 48% from the amount of shipments for the first quarter one year earlier. The reduction of export shipments is attributed to the economic and currency problems in foreign countries that commenced in mid-calendar 1998. A comparison of export shipments by region is as follows:
Quarter ending June 30 Region 1999* 1998* (000's omitted) ========================= Asia/Pacific Rim 141 386 Middle East 157 19 South America 35 79 North America --- 143 Central America 16 39 Caribbean 72 41 Europe 23 151 Africa --- 5 Other 8 10 ========================= 452 873 *Based on customers with $2,500 or more of sales
The Company recognizes that the domestic market for its traditional television transmitters for MMDS service is almost non-existent and that export shipments will not compensate for this reduction for at least the next six months. Therefore, the Company has entered into the following two activities to increase sales and earnings. 1. The Company is becoming involved in high speed Internet service by integrating developed technology with the installation and operation of this service. The Registrant has partnered with other companies to develop two sites in the next four months. The Company further is involved in raising capital to secure Federal Communications Commission ("FCC") licenses for domestic areas to develop 40-50 additional high speed Internet sites. 2. The Registrant has continued its efforts in developing high definition television (HDTV) transmitters to compete in the new service mandated by the FCC. The Company has developed a low cost transmitter that management believes will be well received. The low volume of shipments and the higher ratio (34% vs. 18%) of original equipment manufactured by others (O.E.M), for which the Company receives lower margins, for the quarter ended June 30, 1999 reduced gross profit to $107,000 or 13% of net shipments compared to gross profit of $656,000 or 30% of net shipments for the quarter ended June 30, 1998. Total operating expenses of $532,000 for the first quarter of fiscal 2000 decreased 22% compared to the first quarter of the previous year. Selling expense for the quarter ended June 30, 1999 of $230,000 was $93,000 less than the same quarter one year ago with decreases in all major categories; however, more than half of the decrease is due to decreases in salary and salary related expenses. General and administrative expense totaled $226,000 for the quarter ended June 30, 1999 compared to $263,000 for the quarter ended June 30, 1998 with the decrease primarily in salary and related expenses. Research and development totaled $76,000 for the first quarter of fiscal year 2000, a decrease of $24,000 compared to the first quarter of fiscal 1999. Although the expense was less than the prior year period, the Company has continued its efforts in developing new products for the digital Internet, HDTV and low power transmitter services. Although total operating expenses were reduced for this quarter compared to the same quarter one year ago, the reduced volume of net shipments produced a loss from operations of $425,000 for the quarter ended June 30, 1999 compared to a loss from operations of $30,000 for the quarter ended June 30, 1998. Interest expense for the quarter ended June 30, 1999 totaled $19,000 compared to $18,000 for the same period one year ago. Interest income decreased from $61,000 for the first quarter ended June 30, 1998 to $40,000 for the first quarter ended June 30, 1999 due to the reduction of cash and cash equivalent available for investment. Other income, net for the first quarter of fiscal 2000 totaled $26,000 and reduced the loss from operations to a net loss before income tax benefits to $398,000. One year ago, other income, net of $52,000 created a net profit before income tax of $22,000. Income tax benefits reduced the net loss to $300,000 or $.08 cents per share outstanding for the quarter ended June 30, 1999. A tax provision of $6,000 reduced the net income to $16,000 for the quarter ended June 30, 1998. The amount calculates to less than one half of a cent per share outstanding. There are no state tax liabilities for either periods under discussion since all profitable companies in the consolidated reporting group are domiciled in jurisdictions that do not impose income taxes. Cash and cash equivalents (consisting of a money market portfolio) decreased $269,000 from March 31, 1999 to June 30, 1999 as cash was used primarily for ongoing operations. United States Treasury Bills increased $8,000 to $1,783,000 for the same period for interest and net transfers. Accounts receivable, net of reserve for doubtful accounts, decreased from $603,000 as of March 31, 1999 to $477,000 as of June 30, 1999 due to the reduced sales volume. The allowance for doubtful accounts was increased from $35,000 as of March 31, 1999 to $44,000 as of June 30, 1999 and is believed by management to be adequate to cover anticipated losses for the fiscal year ended March 31, 2000. Inventories of $3,503,000 as of June 30, 1999 were reduced by $20,000 compared to March 31, 1999. Although the Company has attempted to reduce inventories through sales, the high content of O.E.M. shipments (which are not stocked) hindered this endeavor for the quarter ended June 30, 1999. Prepaid expenses decreased $52,000 from March 31, 1999 to June 30, 1999 due to expensing a portion of shows and conventions during the first quarter ending June 30, 1999. Deferred income taxes decreased $21,000 during the same period due to the timing of temporary differences. Purchase of capital assets for the first quarter of fiscal 2000 was nominal at $7,000 for computer equipment. Depreciation for the same period totaled $67,000 thus reducing net property, plant and equipment from $731,000 as of March 31, 1999 to $672,000 as of June 30, 1999. Other assets totaled $494,000 as of June 30, 1999 which increased less than $2,000 from the balance as of March 31, 1999 and consisted primarily of the Registrant's investments in two high speed Internet systems. Also included in this balance is a note receivable of $109,000 due from a principal in these investments. Note Receivable increased from $510,000 as of March 31, 1999 to $515,000 as of June 30,1999 reflecting additional accrued interest. This receivable was a settlement of a sale of a cellular license in which the Registrant received a prior payment of $2,500,000. As there is no definite collection period, and there is not a reasonable basis to evaluate the likelihood of collection, the full amount, including interest, is reserved. Accounts payable was reduced from $288,000 as of March 31, 1999 to $28,000 as of June 30,1999 reflecting timing of payments. Accrued expenses of $305,000 as of June 30, 1999 increased a non-significant $8,000 as compared to March 31, 1999. Deposits from customers increased $30,000 to $106,000 as of June 30, 1999 as the backlog, which is still depressed, did increase from $239,000 as of March 31, 1999 to $482,000 as of June 30, 1999. Long term debt, including the current portion, decreased from $768,000 as of March 31, 1999 to $752,000 as scheduled payments were made. The Registrant believes that its working capital coupled with the cash flow from operations will be sufficient to fund anticipated working capital and debt payment requirements for fiscal 2000. However, an expected entrance and operating high speed Internet systems will involve outside funding anticipate to be at least $50,000,000. Large corporations such as MCI WorldCom and Sprint have been acquiring MMDS spectrum in the last six months. These companies will need equipment such as manufactured by the Registrant to utilize this communication venue. While this is expected to have a favorable impact on the Registrant's sales, this improvement is not anticipated until the fourth quarter of the present fiscal year. Employment for the Company as of June 30, 1999 was 44 persons including 2 part time employees. The Registrant does not anticipate any sizeable increase in employment for the next three months. The Registrant has now entered into its second quarter of fiscal Year 2000 and has encountered minimal software problems that have been resolved. Contingency plans for the Year 2000 related interruptions have been basically completed. A potential failure of a power grid or public telecommunication system, including international in nature, is still in final planning. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 ===================================================================== == Any statements contained in this report which are not historical facts are forward looking statements; and, therefore, 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 MMDS or LPTV industry, 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. PART II. OTHER INFORMATION ITEM 1 LEGAL PROCEEDINGS There is no information relevant to the Registrant which must be disclosed under this item. 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 12 , 1999 /s/ JAMES L. DeSTEFANO JAMES L. DeSTEFANO President/CEO Date: August 12, 1999 /s/ ALLAN J. HARDING ALLAN J. HARDING Vice President-Finance EX-27 2
5 0000032312 EMCEE Broadcast Products, Inc. 3-MOS MAR-31-1999 APR-01-1999 JUN-30-1999 1,303,356 1,783,484 520,746 44,000 3,502,569 7,786,317 2,889,040 2,217,013 8,951,993 559,259 0 73,084 0 0 7,886,228 8,951,993 812,425 812,425 705,012 1,237,066 (26,164) 9,000 18,864 (398,477) (98,150) (300,327) 0 0 0 (300,327) (.08) (.08)
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