FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2012
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from Not Applicable to Not Applicable
Commission file number: 0-147
HICKOK INCORPORATED
(Exact name of registrant as specified in its charter)
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Registrant's telephone number (216) 541-8060
Securities registered pursuant to
Section
12(b)
of the Act:
NONE
Securities
registered pursuant to Section 12(g) of the Act:
Class
A
Common Shares, without par value
(Title of
Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as
defined by
Rule 405 of the Securities Act. Yes
[ ] No
[X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
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
by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation
S-K(229.405 of this chapter) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information
statements incorporated by reference in Part III of this Form 10-K or
any
amendment to this Form 10-K. [ ]
Indicate
by check
mark
whether the registrant is a large accelerated filer, an accelerated
filer,
a non-accelerated
filer, or a smaller reporting company. See the definitions of "large
accelerated filer,""accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act.
| Large accelerated filer [ ] |
Accelerated
filer [
] |
| Non-accelerated
filer
[ ] |
Smaller
reporting
company
[X] |
Indicate
by
check mark whether the registrant is a shell company (as defined in
Rule 12b-2
of the Act). Yes
[ ] No [X]
As of March 31, 2012, the Registrant had 919,412 voting shares of Class A Common Stock outstanding and 474,866 voting shares of Class B Common Stock outstanding. As of such date, non-affiliates held 626,905 shares of Class A Common Stock and 85,056 shares of Class B Common Stock. As of March 31, 2012, based on the closing price of $1.80 per Class A Common Share on the Over The Counter Bulletin Board, the aggregate market value of the Class A Common Stock held by such non-affiliates was approximately $1,128,429. There is no trading market in the shares of Class B Common Stock.
Documents Incorporated by Reference:
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PART
OF FORM
10-K
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DOCUMENT
INCORPORATED
BY REFERENCE
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Part
III (Items
10,
11, 12, 13 and 14)
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Portions
of the
Registrant's
Definitive Proxy Statement to be used in connection with its Annual
Meeting
of Shareholders to be held on February 27, 2013.
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Except as otherwise stated, the information contained in this Form 10-K is as of September 30, 2012.
PART I
General Development of Business
Hickok
Incorporated
was founded in 1910 and organized in 1915 as an Ohio corporation, and
first offered its
securities
to the public in 1959. Except as otherwise stated, the terms "Company"
or
"Hickok" as used herein mean Hickok Incorporated and its two
wholly-owned
subsidiaries, Supreme Electronics Corp. and Waekon Corporation. Hickok
develops
and manufactures products used by companies in the transportation
industry.
Primary markets served are automotive, emissions testing, aircraft, and
locomotive
with sales both to original equipment manufacturers (OEM's) and to the
aftermarkets.
The
Company's Internet address is http://www.hickok-inc.com.
Hickok
makes available free of charge on or through its website its annual
report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and amendments to those reports filed or furnished pursuant
to Section 12(a) or 15(d) of the Securities Exchange Act of 1934 as
soon as reasonably practicable after the Company electronically files
such materials with, or furnishes it to, the Securities and Exchange
Commission (the "SEC"). The SEC maintains an Internet site that
contains
these reports at www.sec.gov.
Until the mid 1980s, Hickok was known primarily for its ability to develop and manufacture electronic instruments for electronic servicers, precision indicating instruments for aircraft, locomotive, and industrial applications, and electronic teaching systems for vocational schools. For the past twenty-five years the Company has used this expertise to develop and manufacture electronic diagnostic tools and equipment used by automotive technicians in the automotive service market. This is now the Company's largest business segment. The Company generated approximately 66% of its fiscal 2012 revenue from designing and manufacturing diagnostic tools for automotive diagnostics and testing. These tools enable service technicians to identify problems in both electronic systems and other non-electronic systems in automobiles and trucks.
Seventeen years ago, two large automotive OEM companies comprised over 80% of the Company's business. A substantial portion of this business was contingent on large programs initiated by these OEMs on a year-to-year basis. The Company recognized that OEMs were changing and that the likelihood of the continuation of these yearly large programs was diminishing. Recognizing that customer diversification was desirable and that much of the technology that had been developed for OEMs could have application to the non-dealer service market (known as the aftermarket), the Company added new products, customers and an established aftermarket sales channel with the acquisition of Waekon Industries in 1998. As a result, the Company executed a strategy to use this existing technical and manufacturing expertise and to develop sales and marketing skills applicable to the automotive aftermarket service industry. The Company uses Waekon as the brand of its products that are primarily marketed as a technician's personal tool.
In
addition, the Company
embarked on
development
programs to design tools specifically tailored to the needs of the
automotive
aftermarket and develop a variety of sales channels to the market. The
Company also uses the Waekon name as a trademark to
market
its products to technicians in the automotive aftermarket and for
certain
emission inspection grade equipment it manufactures. Also the name
Waekon-Hickok
is used as a trademark for higher complexity equipment primarily aimed
at
automotive service shops as a shop tool. The Hickok brand is used for a
family
of products that are related to OEM grade tools sold to automotive
dealerships
and manufacturers. The Company now concentrates on sales of automotive
diagnostic equipment sold through distribution for both dealer and
non-dealer servicers.
The Company has developed a
reputation as a quality emission testing
product
provider. Our reputation for innovative emissions testing products
began
with sales of our patented Gas Cap Tester in numerous state programs by
emissions testing equipment suppliers. In addition, the Company
developed and marketed a complete emissions testing
platform
for a State of Pennsylvania program and
worked
with the State of California to develop a patented product for testing
leaks
in vehicle evaporative emissions systems and subsequently delivered
equipment used in the State's testing program. The emission
equipment provides an on-going level of business maintaining equipment
in
existing programs. In recent years there have been no such new programs
of
significant size undertaken by various states. Most
new state programs
result in large short-term revenues for the Company, with some residual
benefits
to future years.
The Company's operations are currently concentrated in the United States of America. Sales are primarily to domestic customers, although the Company also makes sales to international customers through domestically based distribution companies.
Operating Segment Information
The Company's operations are combined into two reportable business segments: 1) indicators and gauges and 2) automotive diagnostic tools and equipment. Reference is made to "Segment and Related Information" included in the notes to the financial statements.
Indicators and Gauges
For over one hundred years the Company has developed and manufactured precision indicating instruments used in aircraft, locomotives and other applications. In recent years the Company has specialized in aircraft and locomotive cockpit instruments. Within the aircraft market, instruments are sold primarily to manufacturers or servicers of business, military, and pleasure aircraft. Within the locomotive market, indicators are sold to both original equipment manufacturers and to operators of railroad equipment. Indicators and gauges represented approximately 34% of the Company's sales for fiscal 2012 and 25% for fiscal 2011. A number of the Company's aircraft instruments are FAA certified and a number of others are type certified with aircraft manufacturers. The Company also produces both movements and complete indicators that are used in high-reliability applications on several active military aircraft.
Indicator revenues recovered somewhat in fiscal 2012 from the economic downturn and are expected to remain consistent in foreseeable future years. Although the Company does not view this segment as having a high growth potential, it does contribute significant revenues and margins. The Company believes year to year variation of revenue is more dependent on customer timing than any general market direction.
Automotive Diagnostic Tools and Equipment
The Company has concentrated on designing and marketing instruments used to diagnose automotive electronic systems. These products were initially sold to Ford Motor Company but are now sold to several automotive OEMs, and to the aftermarket using jobbers, wholesalers and mobile distributors. Sales of products designed specifically to OEM requirements have been balanced with products developed for automotive aftermarket servicers and the emissions testing industry. The aftermarket accounted for approximately 43% of the Company's automotive diagnostic and specialty tool sales in fiscal 2012 and 41% for fiscal 2011. As a whole, automotive diagnostic tools and equipment represented approximately 66% of the Company's sales for fiscal 2012 and 75% for fiscal 2011. The percentage decrease was due to slightly lower Shop Tool sales and increased Indicator sales in fiscal 2012 compared to fiscal 2011.
The Company's primary expertise is electronic measurement of physical properties and it has cultivated a reputation for developing innovative tools for automotive diagnostics and uses this reputation as leverage when it introduces new offerings. Our recent focus on tools for automotive technicians results in low cost tools that are easy to use, save technicians time, and improve diagnostic accuracy. OEM tools tend to be tools that are sophisticated and allow the technician diagnostic access to vehicle systems that are otherwise inaccessible for the technician to pinpoint the vehicle’s issue. An example of this is the Active Fuel Injector Tester ("AFIT"), which the Company introduced several years ago to General Motors dealers. In 2009, at the OEM’s request, we developed accessory interfaces that allow the same level of ability to diagnose fuel injection system issues for Diesel engines and the recently introduced Gasoline Direct Injection engines. These products, along with a lower cost more manual version called DI Buzz Box have been recently introduced to the aftermarket and feature multiple manufacturer coverage.Sources and Availability of Raw Materials
Raw materials essential to the business are acquired from a large number of United States of America manufacturers and some materials are now purchased from European and Southeast Asian sources. Materials acquired from the electronic components industry include transistors, integrated circuits, resistors, capacitors, switches, potentiometers, micro controllers, and other passive parts. Fabricated metal or plastic parts are generally purchased from local suppliers or manufactured by the Company from raw materials. In general, the required materials are available, if ordered with sufficient lead times, from multiple sources at current prices.
Importance of Patents, Licenses, Franchises, Trademarks and Concessions
The Company presently has several patents and patent applications that relate to several of its products. The Company believes that its position in the industry is dependent upon its present level of engineering skill, research, sales relationships, production techniques and service. However, the Company does have several basic methodology patents related to products it offers that it considers very important to future revenue. Of the Company's most critical patents, one is related to the testing of evaporative emissions systems that was the basis for the Company's product offering for the State of California. This patent expires in the year 2022. Another critical patent is related to vehicle fuel cap testing which expires in 2018. The Company monitors the marketplace for infringement of its patents and intends to pursue its rights should an infringement take place. The Company is currently engaged in such a proceeding. See Item 3 Legal Proceedings. Other than the names "Hickok" and "Waekon", the Company does not have any material licenses, trademarks, franchises or concessions.
Seasonality
The Company believes that there is a seasonality to the automotive aftermarket revenues. Typically the first and fourth quarters tend to be weaker than the other two quarters in this market. Orders for OEM or emissions testing products are primarily subject to customer timing requirements and have no known seasonality aspect to them. As a result, operating results can fluctuate widely from quarter to quarter and year to year.
Practices Relative to Working Capital Items
The nature of the Company's business requires it to maintain sufficient levels of inventory to meet rapid delivery requirements of customers. The Company provides its customers with payment terms prevalent in the industry.
Dependence on Single or Few Customers
Several aftermarket distribution companies and several equipment OEMs have become significant sources of revenue for the Company. Sales in fiscal 2012 to Bosch, a Tier 1 supplier to numerous OEMs, amounted to approximately $905,000 or 19% of the consolidated sales of the Company, sales to General Electric amounted to approximately $710,000 or 15% of the consolidated sales of the Company and sales to ESP amounted to approximately $229,000 or 5% of the consolidated sales of the Company. Sales in fiscal 2011 to Bosch amounted to approximately $883,000 or 17% of the consolidated sales of the Company, sales to General Electric amounted to approximately $459,000 or 9% of the consolidated sales of the Company and sales to ESP amounted to approximately $418,000 or 8% of the consolidated sales of the Company. Sales to Bosch amounted to approximately $542,000 or 10% of the consolidated sales of the Company, sales to General Electric amounted to approximately $455,000 or 9% of the consolidated sales of the Company and sales to ESP amounted to approximately $295,000 or 6% of the consolidated sales of the Company during fiscal 2010. The Company does not have exclusive supply agreements or long-term contractual relationships with these large customers.Backlog
The Company's order backlog as of September 30, 2012 totaled $707,000 as compared to $593,000 as of September 30, 2011 and $529,000 as of September 30, 2010. The increase in fiscal 2012 versus 2011 was primarily due to increased orders for indicators and gauges of $147,000. Automotive diagnostic products orders to OEM's increased by approximately $69,000 offset by a decrease of $35,000 for non-emission aftermarket products and $67,000 for emission products. The increase in fiscal 2011 versus 2010 was primarily due to increased orders for indicators and gauges of $114,000. Automotive diagnostic products orders to OEM's increased by approximately $75,000 offset by a decrease of $106,000 for non-emission aftermarket products and $19,000 for emission products.The Company is engaged in a highly competitive industry and faces competition from domestic and international firms. Several of the Company's competitors have greater financial resources and larger sales organizations than the Company. Competition with respect to the Company's diagnostic tool business arises from the existence of a number of other significant manufacturers in the field, such as Snap-On, and Bosch which dominate the available market in terms of total sales. The instrumentation industry is composed primarily of companies that specialize in the production of particular items as compared to a full line of instruments. The Company believes that its competitive position in this field is in the area of smaller, specialized products, an area in which the Company has operated and in which the Company has established itself competitively by offering high-quality, high-performance products in comparison to high-volume, mass-produced items.
The
Company depends on the automotive industry for sales of its OEM and
aftermarket products. The Company's results of operations were
adversely affected by the deterioration in the automotive industry's
performance during the fiscal 2012, 2011 and 2010 years, as well as
poor economic conditions throughout the country, and the Company
anticipates that it will continue to face significant challenges until
conditions improve substantially. The two markets are driven by
different considerations. The OEM market tends to be driven by the need
for new tools due to the introduction of new technologies in vehicles
or excessive warranty costs. Because of dealership economics, OEMs have
been reluctant to require dealers to purchase service tools for the
past several years. The aftermarket is largely driven by the economics
of fixing vehicles. During poor economic times, purchases can be
delayed. Although aftermarket parts suppliers have done well during the
past few years, aftermarket tool suppliers have not. Our strategy of
developing products that target the technician and low cost tools for
shop use is an outgrowth of these realities in the marketplace. We
believe substantial
opportunities for growth depends primarily on economic recovery in the
sectors we service.
In addition to automotive service products
the Company diversified some years ago into the emissions testing
market. This market has also been depressed partially because EPA
requirements for state emissions testing program requirements have
changed and partially because state budgets have not allowed the
implementation of new testing programs. We believe improved economic
conditions will improve this market for the Company as well.
Research and Development Activities
The Company expensed as incurred product development costs of $938,058 in 2012, $987,114 in 2011 and $1,069,707 in 2010. These expenditures included engineering product support and development of manuals for both of the Company's business segments.
Compliance with Environmental Provisions
The Company's capital expenditures, earnings and competitive position are not materially affected by compliance with federal, state and local environmental provisions which have been enacted or adopted to regulate the distribution of materials into the environment.
Number of Persons Employed
Total employment by the Company at September 30, 2012 was 76 full-time employees which represents a 7% increase from 71 employees in fiscal 2011 and a 8% reduction from 83 employees in fiscal 2010. The Company has no part-time employees. None of the employees are represented by a union. The Company considers its relations with its employees to be good.
Financial Information Concerning Foreign and Domestic Operations and Export Sales
During
the
fiscal
year ended September 30, 2012, all manufacturing, research and
development
and administrative operations were conducted in the United States of
America.
Revenues derived from export sales approximated $163,000 in 2012,
$214,000
in 2011, and $91,000 in 2010. Shipments to
Australia,
Canada,
England, Mexico and Taiwan make
up the
majority
of export sales.
Not
Applicable.
ITEM
1B. UNRESOLVED STAFF COMMENTS.
Not Applicable.
As
of December 14, 2012 the Company had facilities in the United States of
America as
shown below:
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| Cleveland, Ohio |
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Two-story brick construction; used for corporate administrative headquarters, marketing and product development with limited manufacturing. |
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| Greenwood, Mississippi |
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One-story modern concrete block construction; used for manufacturing instruments, test equipment, and fastening systems products. | Leased, with annual renewal options extending through 2061. |
The Company is the plaintiff
in a suit pursuing patent infringement against a competitor in the
emissions
market (Hickok Incorporated v. Systech International, LLC and Delphi
Corporation) currently pending in the United States District Court for
the Northern District of Ohio. The suit alleges infringement by the
defendants on two of
the Company's emission product patents. On one patent, which is related
to gas cap testing, there were multiple items sold by Systech
International, LLC in several markets over a period of several years.
On the second patent, which relates to the Company's method for
evaporative emissions testing used in California, there were multiple
items sold into the California market during 2007 by Systech
International, LLC and Delphi Corporation. The suit against Systech
International, LLC was filed in the United States District Court for
the Northern District of Ohio Eastern Division on November 16, 2007
alleging the gas cap testing
infringement. In January 2008 infringement of the Company's evaporative
emissions
patent was added to the suit. The proceedings recently completed the
Claims Construction phase. The Company anticipates the court may call
for a mediation meeting prior to commencing the next phases of the
legal process. The Company is seeking damages estimated at
approximately $299,000 for
the gas cap testing patent infringement and approximately $3,148,000
for the evaporative emissions testing patent infringement.
The Company was a named defendant along with numerous other companies in a suit in the Eighth Judicial District of the Supreme Court of the State of New York regarding asbestos harm to the plaintiff (Hake v. Hickok Incorporated). The Company was dismissed from the suit in July 2012.
The Company is a named defendant along with numerous other companies in a suit in Wayne County Circuit Court in the State of Michigan regarding asbestos harm to the plaintiff (Becker v. Hickok Incorporated). The Company has engaged a Michigan attorney to provide representation. The Company believes the suit is without merit and is pursuing dismissal of the case.Management
believes that it is not currently possible to estimate the
impact, if any, that the ultimate resolution of these matters will have
on the Company's
results of operations, financial position or cash flows.
ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable.PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
a) MARKET INFORMATION
During fiscal 2012 our Class A Common Shares were traded on The Nasdaq Over-The Counter Bulletin Board Market under the symbol HICKA.QB. There is no market for the Registrant's Class B Common Shares.
The
following table
sets
forth the per share range of high and low bids (Over-The-Counter
Bulletin
Board) for the Registrant's Class A Common Shares for the periods
indicated.
The Over-The-Counter Bulletin Board prices reflect inter-dealer prices
without
retail markup, markdown or commissions and may not represent actual
transactions.
Data was supplied by Nasdaq.
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| First Quarter |
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| Second Quarter |
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| Third Quarter |
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| Fourth Quarter |
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b) HOLDERS
As of December 14, 2012, there were approximately 190 shareholders of record of the Company's outstanding Class A Common Shares and 5 holders of record of the Company's outstanding Class B Common Shares.
c) DIVIDENDS
In
fiscal 2012, 2011 and
2010
the
Company paid no
dividends
on either of its Class A or Class B Common Shares. Pursuant
to the
Company's
Amended Articles of Incorporation, no dividends may be paid on Class B
Common
Shares until cash dividends of ten cents per share per fiscal year are
paid
on Class A Common Shares. Any determination to pay cash dividends in
the future
will be at the discretion of the Board of Directors after taking into
account
various factors, including the Company's financial condition, results
of
operations and current and anticipated cash needs.
FOR THE YEARS ENDED SEPTEMBER 30
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2012
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2011
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2010
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2009
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2008 | |||||||||
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| Net Sales |
$
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4,761
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$
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5,069
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$
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5,259
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$
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6,063
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$
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12,070
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| Net Income (Loss) |
$
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(784)
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$
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(673)
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$
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(949)
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$
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(3,674)
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$
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(770)
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| Working Capital |
$
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1,936
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$
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2,447
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$
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2,784
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$
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3,603
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$
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5,386
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| Total Assets |
$
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3,206
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$
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3,441
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$
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3,809
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$
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4,718
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$
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8,511
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| Long-term Debt |
$
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-0-
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$
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250
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$
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-0-
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$
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-0-
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$
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-0- | |||
| Total Stockholders' Equity |
$
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2,318
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$
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2,621
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$
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3,281
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$
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4,214
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$
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7,872
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| Net Income (Loss) Per Share |
$
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(.57)
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$
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(.54)
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$
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(.76)
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$
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(2.94)
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$
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(.62)
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| Dividends Declared | |||||||||||||
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$
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-0-
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$
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-0-
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$
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-0-
|
$
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-0-
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$
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-0-
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|
$
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-0-
|
$
|
-0-
|
$
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-0-
|
$
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-0-
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$
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-0-
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| Stockholders' Equity | |||||||||||||
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$
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1.52
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$
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2.10
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$
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2.63
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3.38
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$
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6.31
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| Return on Sales |
(16.5%)
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(13.3%)
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(18.1%)
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(60.6%)
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(6.4%)
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| Return on Assets |
(23.6%)
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(18.6%)
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(22.3%)
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(55.6%)
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(7.2%)
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| Return on Equity |
(31.7%)
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(22.8%)
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(25.3%)
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(60.8%)
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(9.4%)
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| Closing Stock Price |
$
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1.25
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$
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1.80
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$
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4.25
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$
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5.01
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$
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9.00
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In December of 2008, management took steps to reduce direct and non-direct product related expenses throughout the Company in response to the economic downturn and the uncertainty in the markets the Company serves. The steps included a substantial reduction in personnel, wage reductions for all personnel and expenditure restrictions in most aspects of the Company’s operations. Management took additional steps in April 2009 and made additional reductions in personnel throughout the Company due to the continued decline in sales to the markets the Company serves. Management implemented additional expense reductions that were effective March 1, 2011 in the form of a substantial reduction in personnel and a wage reduction for the CEO. In addition, the Board of Directors reduced, and then eliminated, all Board of Directors fees until Company financial conditions improve.
The expense
reductions have reduced the Company's annual expenses approximately
$3,600,000 annually, including possible increases in other expenses. During
fiscal 2012, management developed a plan that included a limited
increase in personnel and a small increase in the compensation of
existing personnel. The changes are intended to accelerate both the
introduction of new products and to enhance the sales of existing
products through improved market presence and promotion.
Management believes
its
strategy to
improve revenue and profitability will aid results during fiscal 2013. The savings from the
above cost cutting measures are
expected
to continue and be realized in equal amounts per month with similar
impact on both
future
earnings and cash flows.
The Company is required to report segment information disclosures based on how management evaluates operating performance and resource allocations. The Company has determined that it has two reportable segments: 1) indicators and gauges, and 2) automotive related diagnostic tools and equipment.
Indicators and Gauges
This segment consists of products manufactured and sold primarily to companies in the aircraft and locomotive industry. Within the aircraft market, the primary customers are those companies that manufacture or service business, military and pleasure aircraft. Within the locomotive market, indicators and gauges are sold to original equipment manufacturers, servicers of locomotives, and operators of railroad equipment.
Automotive Diagnostic Tools and Equipment
This segment consists primarily of products designed and manufactured to support the testing or servicing of automotive and truck systems using electronic means to measure vehicle parameters. These products are sold to OEMs and to the aftermarket using several brand names and a variety of distribution methods. Included in this segment are products used for state required testing of vehicle emissions.
Results of Operations
Sales for the fiscal year ended September 30, 2012 decreased to $4,761,289, a decrease of approximately 6% from fiscal 2011 sales of $5,068,613. This decrease in sales was volume-driven and attributable primarily to lower product sales of approximately $241,000. Service sales in fiscal 2012 decreased by approximately $67,000 and the reduction was volume related, compared to fiscal 2011. Product sales were $4,442,133 in fiscal 2012 compared to $4,682,830 in fiscal 2011. The decrease in product sales occurred in the automotive diagnostic equipment segment. Within the automotive diagnostic products, OEM products, aftermarket products and emission products sales decreased approximately $133,000, $169,000 and $323,000 respectively. Sales of indicator products increased in fiscal 2012 by approximately $385,000 and was volume related due primarily to increased Military movement orders. Fiscal 2011 benefited from several small state emissions programs requiring gas cap testing products. The reduction in service sales was volume related and attributable to lower repair sales.
Sales for the fiscal year ended September 30, 2011 decreased to $5,068,613, a decrease of approximately 4% from fiscal 2010 sales of $5,259,012. This decrease in sales was volume-driven and attributable primarily to lower product sales of approximately $186,000. Service sales in fiscal 2011 decreased by approximately $5,000 and the reduction was volume related, compared to fiscal 2010. Product sales were $4,682,830 in fiscal 2011 compared to $4,868,635 in fiscal 2010. The decrease in product sales occurred in both the indicator and gauges segment, and the automotive diagnostic equipment segment. The dollar decreases were approximately $116,000 and $70,000 respectively. Within the automotive diagnostic products, OEM products and aftermarket products sales decreased approximately $1,000 and $269,000 respectively, offset in part by an increase in emission product sales of approximately $200,000. Fiscal 2011 benefited from several small state emissions programs requiring gas cap testing products while fiscal 2010 benefited from an OEM product supplied to all franchised dealers. The reduction in service sales was volume related and attributable to lower repair sales.
Cost of products sold in fiscal 2012 was $2,787,212 or 62.7% of net product sales compared to $2,732,876 or 58.4% of net product sales in fiscal 2011. Cost of products sold during fiscal 2010 was $2,689,469 or 55.2% of net product sales. The dollar and percentage increase in the cost of products sold to product sales between fiscal 2012 and 2011 was due primarily to a change in product mix. The dollar and percentage increase in the cost of products sold to product sales between fiscal 2011 and 2010 was due primarily to a change in product mix.Management
recorded a valuation allowance
on the entire balance of deferred tax
assets at September 30, 2009 in the amount of $1,845,200 due to the
continued losses during
the past several years, the current economic uncertainties, the
negative effects of the current economic crisis on all of the Company's
markets and concern that more likely than not
expiration of the Company's net operating loss and research and
development credit carryforwards could occur before they can be used. In
fiscal 2012, 2011 and 2010 management recorded a valuation allowance in
the amount of $187,400, $255,600 and $310,500 respectively on the
current year deferred taxes. This represents
an effective income tax rate of 0% for each of the past three years. It
is anticipated that the effective tax rate in fiscal 2013
will be similar to fiscal 2012.
The
deferred
tax benefits
begin to expire in 2015.
Liquidity and Capital Resources
Current assets of $2,823,971 at September 30, 2012 were 3.2 times current liabilities and the total of cash and cash equivalents and receivables was 1.1 times current liabilities. These ratios compare to 5.3 and 1.8 respectively at the end of fiscal 2011. Cash and cash equivalents was $258,798 at September 30, 2012 and $274,530 at September 30, 2011. Total current assets decreased by approximately $193,000 from the previous year end due primarily to a decrease in inventory, accounts receivable and cash and cash equivalents of approximately $229,000, $20,000 and $16,000 respectively. The decrease was offset in part by an increase in prepaid expenses of approximately $71,000. The decrease in inventory was due primarily to an increase in the obsolescence reserve during the current year. The increase in prepaid expenses was due primarily to timing.Working
capital at September
30, 2012 was
$1,935,875 as compared to $2,447,080 a year ago. The decrease of
approximately $511,000
was due primarily to a decrease in cash and cash
equivalents, accounts receivable and
inventory, an increase in convertible notes payable and accrued
expenses of
approximately $229,000, $20,000, $16,000, $209,000 and $98,000
respectively,
offset
in part by an increase in prepaid expense of
approximately $71,000. The decrease in inventory was due primarily to
an increase in the obsolescence reserve in
the current year.
Hickok has no off-balance sheet arrangements (as defined in Regulation S-K Item 303 paragraph (a)(4)(ii)) that have or are reasonably likely to have a material current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The Company describes its significant accounting policies in the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K. However, in response to the SEC's Release No. FR-60, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies", issued December 12, 2001, the Company has identified the policies it believes are most critical to an understanding of the Company's financial statements. Since application of these accounting policies involves the exercise of judgment and use of estimates, actual results could differ from those estimates.
Revenue Recognition - Revenue is recognized as manufactured items are shipped to customers, legal title has passed, and all significant contractual obligations of the Company have been satisfied. Revenue from development contracts is recorded as agreed upon milestones are achieved.
Inventory Valuation and Reserves - Inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. The Company's business may require an increase in inventory of component parts, work-in-process and finished goods in order to meet anticipated delivery schedules of customers. However, we are responsible for excess and obsolete inventory purchases in excess of inventory needed to meet customer demand forecasts, as well as inventory purchases generally not covered by supply agreements, or parts that become obsolete before use in production. If our forecasts change or excess inventory becomes obsolete, the inventory reserves included in our financial statements may be understated.
Deferred Taxes - Deferred income taxes are provided for temporary differences between financial and tax reporting. Significant factors considered by the Company in estimating the probability of the realization of deferred taxes include expectations of future earnings and taxable income, as well as application of tax laws in the jurisdictions in which the Company operates.
The Company does not have off-balance sheet arrangements, financing, or other relationships with unconsolidated entities or persons, also known as "special purpose entities" (SPEs).
Impact of Inflation
Over the past three years, inflation has had a minimal effect on the Company because of low rates of inflation and the Company's policy minimizing the acceptance of long-term fixed rate contracts without provisions permitting adjustment for inflation.
Forward-Looking Statements
The
foregoing
discussion
includes forward-looking statements relating to the business of the
Company.
These forward-looking statements, or other statements made by the
Company,
are made based on management's expectations and beliefs concerning
future
events impacting the Company and are subject to uncertainties and
factors
(including, but not limited to, those specified below) which are
difficult
to predict and, in many instances, are beyond the control of the
Company.
As a result, actual results of the Company could differ materially from
those
expressed in or implied by any such forward-looking statements. These
uncertainties and factors include (a) the Company's dependence upon a
limited number of
customers and the automotive industry, (b) the highly competitive
industry in which the Company operates, which includes several
competitors with greater financial resources and larger sales
organizations, (c) the acceptance in the marketplace of new products
and/or services developed or under development by the Company including
automotive diagnostic products and indicating instrument products, (d)
the ability of the Company to further establish distribution and a
customer base in the automotive aftermarket, (e) the Company's
ability
to capitalize on market opportunities including state automotive
emissions
programs and OEM tool programs, and (f) the Company's ability to obtain
cost effective financing.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Market Risk
The Company is exposed to certain market risks from transactions that are entered into during the normal course of business. The Company has not entered into derivative financial instruments for trading purposes. The Company's primary market risks are exposure related to interest rate risk and equity market fluctuations. The Company's only debt subject to interest rate risk is its revolving credit facility. The Company has no outstanding balance on its credit facility at September 30, 2012, which is subject to a variable rate of interest based on the prime commercial rate. As a result, the Company believes that the market risk relating to interest rate movements is minimal.ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The
following
pages contain the Financial Statements and Supplementary Data as
specified
for Item 8 of Part II of Form 10-K.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
SHAREHOLDERS
AND BOARD
OF DIRECTORS
HICKOK
INCORPORATED
CLEVELAND,
OHIO
We have audited the accompanying consolidated balance sheet of HICKOK INCORPORATED as of September 30, 2012 and 2011, and the related consolidated statements of income, stockholders' equity and cash flows for each of the years in the three-year period ended September 30, 2012. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board "United States". Those standards require that we plan and perform the audit to obtain reasonable assurance that the consolidated financial statements are free from material misstatement. The Company has determined it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Hickok Incorporated as of September 30, 2012 and 2011, and the consolidated results of their operations and their cash flows for each of the years in the three-year period ended September 30, 2012 in conformity with accounting principles generally accepted in the United States of America.
MEADEN
& MOORE, Ltd.
CERTIFIED
PUBLIC ACCOUNTANTS
January 3,
2013
CLEVELAND,
OHIO
F-1
|
2012
|
2011
|
||||
|
|
|||||
| CURRENT ASSETS: | |||||
| Cash and cash equivalents |
$258,798
|
$274,530
|
|||
| Accounts receivable-less allowance for |
702,846
|
722,731
|
|||
| doubtful accounts of $10,000 ($10,000, 2011) | |||||
| Notes receivable-current |
3,600 |
2,400 |
|||
| Inventories-less allowance for obsolete |
1,734,770
|
1,963,943
|
|||
| inventory of $851,000 ($714,000, 2011) | |||||
| Deferred
income
taxes-less valuation |
|||||
| allowance of $332,800 ($270,100, 2011) | - |
- |
|||
| Prepaid expenses |
123,957
|
53,267
|
|||
|
|
|||||
| Total Current Assets |
2,823,971
|
3,016,871
|
|||
| PROPERTY, PLANT AND EQUIPMENT: | |||||
| Land |
233,479
|
233,479
|
|||
| Buildings |
1,429,718
|
1,429,718
|
|||
| Machinery and equipment |
2,374,319
|
2,336,995
|
|||
|
|
|||||
|
4,037,516
|
4,000,192
|
||||
|
|
3,688,266
|
3,613,913
|
|||
|
|
|||||
|
349,250
|
386,279
|
||||
| OTHER ASSETS: | |||||
| Deferred
income
taxes-less
valuation |
|||||
| allowance of $3,903,900 ($3,779,200, 2011) | - |
- |
|||
| Notes receivable-long-term |
31,000 |
35,700 |
|||
| Deposits |
1,750
|
1,750
|
|||
|
|
|||||
|
32,750
|
37,450
|
||||
|
|
|||||
| Total Assets |
$3,205,971
|
$3,440,600
|
|||
|
|
|||||
F-2
2012
2011
CURRENT
LIABILITIES:
Convertible notes payable
$208,591
$-
Accounts
payable
178,835
173,848
Accrued
payroll
and
related expenses
149,636
142,949
Accrued
expenses
306,475
205,208
Accrued
taxes
other
than income
44,559
47,786
Total
Current
Liabilities
888,096
569,791
Long-term financing
-
250,000
STOCKHOLDERS'
EQUITY:
Common
shares - no par value
Class
A
3,750,000
shares authorized, 1,045,597
shares
issued
(809,024
shares 2011)
1,045,597
793,229
Class
B
1,000,000
convertible shares authorized,
475,533
shares
issued
474,866
454,866
Contributed
capital
1,662,981
1,862,652
Treasury
shares
- 15,795
(2012 and 2011)
Class A shares and 667
(20,667 2011)
Class B shares
(253,341)
(661,676)
Retained
earnings
(612,228)
171,738
Total
Stockholders'
Equity
2,317,875
2,620,809
Total
Liabilities
and Stockholders' Equity
$3,205,971
$3,440,600
F-3
CONSOLIDATED
STATEMENT OF INCOME
HICKOK
INCORPORATED
FOR THE
YEARS
ENDED SEPTEMBER 30
|
2012
|
2011
|
2010
|
|||
|
|
|||||
| NET SALES: | |||||
| Product sales |
$4,442,133
|
$4,682,830
|
$4,868,635
|
||
| Service sales |
319,156
|
385,783
|
390,377
|
||
|
|
|||||
| Total Net Sales |
4,761,289
|
5,068,613
|
5,259,012
|
||
| COSTS AND EXPENSES: | |||||
| Cost of product sold |
2,787,212
|
2,732,876
|
2,689,469
|
||
| Cost of services sold |
216,949
|
293,641
|
251,258
|
||
| Product development |
938,058
|
987,114
|
1,069,707
|
||
| Marketing and administrative |
1,616,320
|
1,734,257
|
2,217,520
|
||
| expenses | |||||
| Interest charges |
5,956
|
7,610
|
542
|
||
| Other income |
(19,240)
|
(14,350)
|
(19,988)
|
||
|
|
|||||
| Total Costs and Expenses |
5,545,255
|
5,741,148
|
6,208,508
|
||
|
|
|||||
| Loss before Provision for Income Taxes |
(783,966)
|
(672,535)
|
(949,496)
|
||
| Provision For Income Taxes: | |||||
| Deferred |
-
|
-
|
-
|
||
|
|
|||||
|
-
|
-
|
-
|
|||
|
|
|||||
| Net Loss |
$(783,966) |
$(672,535) |
$(949,496) |
||
|
|
|||||
| NET LOSS PER COMMON SHARE - BASIC | $(.57) | $(.54) | $(.76) | ||
|
|
|||||
| NET
LOSS PER COMMON SHARE - DILUTED |
$(.57) | $(.54) | $(.76) | ||
|
|
|||||
| WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING |
1,372,812
|
1,248,095
|
1,248,095
|
||
|
|
|||||
F-4
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY
HICKOK
INCORPORATED
FOR THE
YEARS
ENDED SEPTEMBER 30, 2012, 2011, AND 2010
|
NO PAR VALUE |
||||||
| RETAINED
EARNINGS |
CLASS A | CLASS B | CONTRIBUTED CAPITAL |
TREASURY
SHARES |
TOTAL | |
| Balance at September 30, 2009 | $1,793,769 | $793,229 | $454,866 | $1,833,992 | $(661,676) | $4,214,180 |
| Share-based compensation expense | - |
- |
- |
16,045 |
- |
16,045 |
| Net
Loss |
(949,496) |
- |
- |
- |
- |
(949,496) |
|
|
||||||
| Balance at September 30, 2010 | $844,273 |
$793,229 |
$454,866 |
$1,850,037 |
$(661,676) |
$3,280,729 |
| Share-based compensation expense |
- |
- |
- |
12,615 |
- |
12,615 |
| Net
Loss |
(672,535) |
- |
- |
- |
- |
(672,535) |
|
|
||||||
| Balance
at September 30, 2011 |
$171,738 |
$793,229 |
$454,866 |
$1,862,652 |
$(661,676) |
$2,620,809 |
| Sale of Class B shares from treasury |
- |
- |
20,000 |
(391,335) |
408,335 |
37,000 |
| Conversion of convertible notes payable to Class A shares |
- |
252,368 |
- |
214,511 |
- |
466,879 |
| Convertible notes issue cost |
- |
- |
- |
(34,235) |
- |
(34,235) |
| Share-based compensation expense | - |
- |
- |
11,388 |
- |
11,388 |
| Net Loss | (783,966) |
- |
- |
- |
- |
(783,966) |
|
|
||||||
| Balance at September 30, 2012 | $(612,228) |
$1,045,597 |
$474,866 |
$1,662,981 |
$(253,341) |
$2,317,875 |
|
|
||||||
See accompanying summary of accounting policies and notes to consolidated financial statements.
F-5
CONSOLIDATED
STATEMENT OF CASH FLOWS
HICKOK
INCORPORATED
FOR THE
YEARS
ENDED SEPTEMBER 30
|
2012
|
2011
|
2010
|
||
|
|
||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
| Cash received from customers |
$4,781,174
|
$4,696,268
|
$6,038,214
|
|
| Cash
paid to
suppliers
and employees |
(5,177,377)
|
(5,396,080)
|
(5,972,126)
|
|
| Interest paid |
(6,641)
|
(6,849)
|
-
|
|
| Interest received |
1,057
|
644
|
4,824
|
|
|
|
||||
| Net Cash Provided by (Used in) Operating Activities |
(401,787)
|
(706,017)
|
70,912
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
| Capital expenditures |
(55,180)
|
-
|
(19,456)
|
|
| Payments received (advances) on notes receivable |
3,500 |
(38,100) |
- |
|
| Proceeds on sale of assets | 9,500 |
-
|
325
|
|
|
|
||||
| Net Cash Provided by (Used in) Investing Activities |
(42,180)
|
(38,100)
|
(19,131)
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
| Long-term
borrowings |
- |
250,000 |
- |
|
| Payments on long-term borrowings |
(250,000) |
- |
- |
|
| Increase in Convertible Notes Payable |
675,470 |
- |
- |
|
| Sale of Class B shares from treasury |
37,000 |
- |
- |
|
| Convertible Notes issue costs |
(34,235) |
- |
- |
|
|
|
||||
| Net Cash Provided by (Used in) Financing Activities |
428,235
|
250,000
|
-
|
|
|
|
||||
| Increase (Decrease) in Cash and Cash Equivalents |
(15,732)
|
(494,117)
|
51,781
|
|
| Cash and Cash Equivalents at Beginning of Year |
274,530
|
768,647
|
716,866
|
|
|
|
||||
| Cash and Cash Equivalents at End of Year |
$258,798
|
$274,530
|
$768,647
|
|
|
|
||||
| See
accompanying
summary
of accounting policies and notes to consolidated financial statements. |
||||
F-6
| 2012 |
2011 |
2010 |
|
|
|
|||
| RECONCILIATION
OF
NET LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: |
|||
| Net
Loss |
$(783,966) |
$(672,535) |
$(949,496) |
| ADJUSTMENTS
TO
RECONCILE NET LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: |
|||
| Depreciation |
86,257 |
108,924 |
131,800 |
| (Gain)loss
on
disposal of assets |
(3,548) |
- |
1,938 |
| Share-based compensation expense |
11,388 |
12,615 |
16,045 |
| CHANGES
IN
ASSETS AND LIABILITIES: |
|||
| Decrease
(Increase)
in accounts receivable |
19,885 |
(372,345) |
779,202 |
| Decrease in
inventories |
229,173 |
159,029 |
61,676 |
| Decrease (Increase)
in prepaid
expenses |
(70,690) |
17,156 |
5,129 |
| Increase
(Decrease)
in accounts payable |
4,987 |
(9,188) |
25,709 |
| Increase
(Decrease)
in accrued payroll and related expenses |
6,687 |
(6,852) |
10,459 |
| Increase
(Decrease)
in other accrued expenses and accrued taxes other than income |
98,040 |
57,179 |
(7,590) |
| Increase
(Decrease)
in accrued income taxes |
- |
- |
(3,960) |
|
|
|||
| Total
Adjustments |
382,179 |
(33,482) |
1,020,408 |
|
|
|||
| Net
Cash
Provided by (Used in) Operating Activities |
$(401,787) |
$(706,017) |
$70,912 |
|
|
|||
| Supplemental Schedule of
Non-Cash Financing Activities: |
|||
| Conversion of convertible notes payable to Class A shares |
$466,879 |
$- |
$- |
F-7
F-8
NOTES
TO
CONSOLIDATED FINANCIAL STATEMENTS
HICKOK
INCORPORATED
SEPTEMBER
30, 2012, 2011 AND 2010
Hickok Incorporated and its wholly-owned domestic subsidiaries ("Company") develop and manufacture products used by companies in the transportation and emissions testing industries. Among the products are indicators and gauges sold to companies in aircraft and locomotive markets. On a much larger scale, the Company manufactures diagnostic equipment used by technicians to test the various electronic systems in automobiles and trucks, and emissions testing equipment specified by various states for testing vehicle emissions. The Company serves the automotive, locomotive and general aviation markets predominately in North America. Sales in the Company's principal product classes, as a percent of consolidated sales, are as follows:
| Product Classes |
2012
|
2011
|
2010
|
||||||
|
|
|
||||||||
| Automotive Test Equipment | |
66.1
|
% |
75.3
|
% |
74.2
|
% | ||
| Indicating Instruments |
33.9
|
24.7
|
25.8
|
||||||
|
|
|||||||||
| Total | |
100.0
|
% |
100.0
|
% |
100.0
|
% | ||
|
|
|||||||||
Current operating properties consist of a manufacturing plant in Greenwood, Mississippi, and a corporate headquarters, marketing and product development facility in Cleveland, Ohio.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles
of Consolidation :
The
consolidated
financial statements include the accounts of Hickok Incorporated and
its
wholly-owned domestic subsidiaries. Significant intercompany
transactions
and balances have been eliminated in the financial statements.
Adoption
of New Accounting Standards :
The Company did not
incur any material
impact
to its financial condition or results of operations due to the adoption
of
any new accounting standards during the periods reported.
Concentration
of
Credit Risk :
The
Company
sells its products and services primarily to customers in the United
States
of America and to a lesser extent overseas. All sales are made in
United
States of America dollars. The
Company extends normal credit terms to
its customers. Customers
in
the automotive industry comprise 73%
of outstanding receivables at September 30, 2012 (77%
in 2011).
Sales
to three customers approximated $905,000,
$710,000
and $229,000(2012),
$883,000,
$459,000 and $418,000 (2011), $542,000,
$581,000
and $455,000
(2010), and accounts receivable to these customers amounted to
approximately $327,000,
$66,000 and $25,000 (2012),
$309,000,
$93,000 and $28,000 (2011).
Use
of
Estimates
in the
Preparation of Financial Statements :
The
preparation
of financial statements in conformity with generally accepted
accounting
principles requires management to make estimates and assumptions that
may
affect the reported amounts of certain assets and liabilities and
disclosure
of contingencies at the date of the financial statements, and the
reported
amounts of revenue and expenses during the reporting period. Actual
results
could differ from those estimates.
Revenue
Recognition :
The
Company
records sales as manufactured items are shipped to customers on an FOB
shipping
point arrangement, at which time title passes and the earnings process
is
complete. The Company primarily records service sales as the items are
repaired.
The customer does not have a right to return merchandise unless
defective
or warranty related and there are no formal customer acceptance
provisions.
Sales
returns and allowances were immaterial during each of
the
three years in the period ending September 30, 2012.
Product
Warranties :
The
Company warrants certain products against defects for
periods
ranging primarily from 12 to 48
months. The
Company's
estimated future warranty claims is included
in
"Accrued
expenses"
and are as follows:
|
2012
|
2011
|
2010
|
||
|
|
||||
| Balance
October 1 |
$993 |
$3,415 |
$4,482 |
|
| Current year provisions | 7,564 |
163 |
3,602 |
|
| Expenditures | (8,106) |
(2,585) |
(4,669) |
|
|
|
|
|
||
| Balance
September 30 |
$451
|
$993
|
$3,415
|
|
|
|
||||
Cash
and
Cash
Equivalents :
For
purposes
of the Statement of Cash Flows, the Company considers all highly liquid
debt
instruments purchased with a maturity of three months or less to be
cash equivalents.
From time to time the Company maintains cash balances in excess of the
FDIC
limits. The cash balance at September 30, 2012 and 2011 amounted to $258,798
and
$274,530,
respectively.
Accounts
Receivable
:
The
Company
establishes an allowance for doubtful accounts based upon factors
surrounding
the credit risk of specific customers, historical trends and other
information.
Inventories
:
Inventories
are valued at the lower of cost (first-in, first-out) or market and
consist
of:
Raw
materials
and
component parts
Work-in-process
Finished
products
Property,
Plant and Equipment :
Property,
plant
and equipment are carried at cost. Maintenance and repair costs are
expensed
as incurred. Additions and betterments are capitalized. The
depreciation
policy of the Company is generally as follows:
| Class | Method |
|
|
|
||
| Buildings | Straight-line | 10 to 40 years |
| Machinery and equipment | Straight-line | 3 to 10 years |
| Tools and dies | Straight-line | 3 years |
Depreciation
amounted to $86,257 (2012), $108,924 (2011), and $131,800 (2010).
Valuation
of Long-Lived Assets :
Long-lived
assets
such as property, plant and equipment and software are reviewed for
impairment
whenever events or changes in circumstances indicate that the carrying
amount
may not be recoverable. If the total of the expected future
undiscounted
cash flows is less than the carrying amount of the asset, a loss is
recognized
for the difference between the fair value and carrying value of the
asset.
Shipping
and
Handling
Costs :
Shipping
and
handling costs are classified as cost of product sold.
Advertising
Costs
:
Advertising
costs are expensed as incurred and amounted to $6,940
(2012),
$16,756 (2011)
and $17,854 (2010).
Income
Taxes :
The provision
for
income taxes is determined using the asset and liability approach of
accounting for
income taxes. Under this approach, deferred taxes represent the future
tax
consequences expected to occur when the reported amounts of assets and
liabilities
are recovered or paid. The provision for income taxes represents income
taxes
paid or payable for the current year plus any change in deferred taxes
during
the year. Deferred taxes result from differences between the tax basis
of
assets and liabilities and their reported amounts in the consolidated
financial
statements and are adjusted for changes in tax rates and tax laws when
changes
are enacted. Valuation allowances are recorded to reduce deferred tax
assets
when it is more likely than not that a tax benefit will not be realized.
Income
per Common Share :
Income per
common
share information is computed on the weighted average number of shares
outstanding
during each period as disclosed in Note 10.
| Current Portion |
|
||
|
|
|||
| 2012 |
2012 |
2011 |
|
| Unsecured note receivable from current employee which bears interest at 3% per annum | $- | $4,100 | $4,100 |
| Unsecured note receivable from former employee which bears interest at 3% per annum, currently paying $300 per month | $3,600 | 30,500 | 34,000 |
|
|
|
|
|
| $3,600 |
34,600 |
38,100 |
|
|
|
|||
| Less current portion |
3,600 |
2,400 |
|
|
|
|
||
| Long-term portion |
$31,000 |
$35,700 |
|
|
|
|
||
The agreement provides for a revolving credit facility of $250,000 with interest generally equal to three percent per annum plus prime and is unsecured. In addition, the agreement generally allows for borrowing based on an amount equal to eighty percent of eligible accounts receivables or a maximum of $250,000.
The Company repaid the outstanding balance of $250,000 on February 1, 2012. The Company recorded interest expense of $5,338 through September 30, 2012. As of September 30, 2012 interest in the amount of $6,641 was paid. The Company had no outstanding borrowings under this loan facility at September 30, 2012. Selected details of long-term borrowings are as follows:
| Amount |
Interest Rate |
|
|
|
||
| Balance at September 30, 2012 | $- | 6.25% |
| Average during 2012 | $83,333 | 6.25% |
| Maximum during 2012 (month end) | $250,000 | 6.25% |
| Balance
at September
30,
2011 |
$250,000 |
6.25% |
| Average
during 2011 |
$62,500 |
6.25% |
| Maximum
during 2011
(month
end) |
$250,000 |
6.25% |
Subsequent to September 30, 2012 management entered into a new revolving line of credit which will provide $250,000 of liquidity to meet on going working capital requirements. The Revolving Credit Agreement is by and between the Company and a major shareholder who is also an employee of the Company extending the due date of the line of credit agreement from April 13, 2013 to December 31, 2013 at an interest rate of 0.24% and includes a three year warrant for 100,000 shares of Class A common stock at a price of $2.50 per share.
Operating :|
2013
|
$8,859
|
|
|
2014
|
8,859
|
|
|
2015
|
6,866
|
|
|
|
||
| Total |
$24,584
|
|
|
|
||
A facility held under a capital lease has a net book value of $0 at September 30, 2012. Future minimum lease payments which extend through 2061 are immaterial.
Under the Company's Key Employees Stock Option Plans (collectively the "Employee Plans") the Compensation Committee of the Board of Directors had the authority to grant options to Key Employees to purchase Class A shares. The options were exercisable for up to 10 years. Incentive stock options were available at an exercise price of not less than market price on the date the option were granted. However, options available to an individual owning more than 10% of the Company's Class A shares at the time of grant must be at a price not less than 110% of the market price. Non-qualified stock options may be issued at such exercise price and on such other terms and conditions as the Compensation Committee may determine. No options may be granted at a price less than $2.925. Under the Employee Plans there are no options currently available for grant and there are no options outstanding at September 30, 2012.
The Company's Outside Directors Stock Option Plans (collectively the "Directors Plans") provide for the automatic grant of options to purchase up to 42,000 shares of Class A common stock over a three year period to members of the Board of Directors who are not employees of the Company, at the fair market value on the date of grant. The options are exercisable for up to 10 years. All options granted under the Directors Plans become fully exercisable on March 8, 2015.
Non-cash compensation expense related to stock option plans for fiscal years ended September 30, 2012, 2011 and 2010 was $11,388, $12,615 and $16,045 respectively.
Transactions
involving
the plan are summarized as follows:
Exercise
Exercise
Exercise
Option
Shares
Employee
Plans:
Outstanding
October
1,
Granted
Canceled/expired
Exercised
Outstanding
September
30, ($0 per
share)
Exercisable
September
30,
Directors
Plans:
Outstanding
October
1,
Granted
Canceled/expired
Exercised
Outstanding
September
30, ($2.925 to $11.00
per share)
Exercisable
September
30,
| Directors Plans | Outstanding
Stock Options |
Weighted
Average Exercise Price |
Weighted
Average Remaining Life |
Number
of Stock Options Exercisable |
Weighted
Average Exercise Price |
|
|
|||||
| Range
of exercise prices: |
|||||
| $2.925 - 5.25 | 23,000 | $3.43 | 6.5 | 12,667 | $3.84 |
| $6.00 - 7.25 | 11,000 | $6.46 | 4.5 | 9,333 | $6.55 |
| $10.50 - 11.00 | 8,000 | $10.75 | 5.0 | 8,000 | $10.75 |
| 42,000 | $5.62 | 30,000 | $6.52 | ||
8. CAPITAL STOCK, TREASURY STOCK, AND CONTRIBUTED CAPITAL
Unissued shares of Class A common stock ( 881,985 and 519,716 shares in 2012 and 2011 respectively) are reserved for the share-for-share conversion rights of the Class B common stock and stock options under the Employee Plans and the Directors Plans (see note 7 and 14). The Class A shares have one vote per share and the Class B shares have three votes per share, except under certain circumstances such as voting on voluntary liquidation, sale of substantially all the assets, etc. Dividends up to $.10 per year, noncumulative, must be paid on Class A shares before any dividends are paid on Class B shares.
A
reconciliation of
the provision (recovery) of income taxes to the statutory Federal
income
tax rate is as follows:
Income
(Loss)
Before
Provision for Income Taxes
Statutory
rate
Permanent
differences
Research
and
development
credit - net
Valuation allowance
274,600
255,600
310,500
Other
Deferred
tax assets (liabilities) consist of the following:
|
2012
|
2011
|
||
|
|
|||
| Current: | |||
| Inventories |
$295,300
|
$244,300
|
|
| Bad debts | 3,400 | 3,400 | |
| Accrued liabilities |
45,600
|
39,200
|
|
| Prepaid expense |
(11,500)
|
(16,800) | |
|
|
|||
| 332,800 |
270,100 |
||
| Valuation allowance | (332,800) |
(270,100) |
|
|
|
|||
| Total current deferred income taxes |
-
|
-
|
|
| Noncurrent: | |||
| Depreciation and amortization |
53,400
|
86,500
|
|
| Research and development and other credit carryforwards |
1,716,300
|
1,700,400
|
|
| Net operating loss carryforward | 1,934,200 | 1,709,000 | |
| Contribution carryforward |
163,200 | 250,400 | |
| Directors stock option plan |
36,800
|
32,900
|
|
|
|
|||
|
3,903,900
|
3,779,200
|
||
| Valuation allowance |
(3,903,900) |
(3,779,200) |
|
|
|
|
||
| Total long-term deferred income taxes |
- |
- |
|
|
|
|||
| Total |
$-
|
$-
|
|
|
|
|||
The
Company did not
incur any material impact to its financial condition or results of
operations due to the financial statement recognition and measurement
of a tax position taken
or expected to be taken in a tax return.
The
Company is
subject to U.S federal jurisdiction income tax examinations for the tax
years 2008 through 2010. In addition, the Company is subject to state
and local income tax examinations for the tax years 2008 through 2010.
The
Company has
available a net operating loss carryforward of approximately $5,689,000
and a
contribution carryforward of approximately $480,000. The
net operating loss and
research and
development credit carryforwards will begin to expire in 2015.
The Company's ability to realize the entire benefit of its deferred tax assets requires that the Company achieve certain future earning levels prior to the expiration of its net operating loss and research and development credit carryforwards. Because of the uncertainties involved with this significant estimate, it is reasonably possible that the Company's estimate may change in the near term.
The
following
table
sets forth the computation of basic and diluted earnings per share.
Basic
Loss Per Share
Loss
available
to common stockholders
Shares
denominator
Per
share
amount
Effect
of Dilutive Securities
Average
shares
outstanding
Stock
options
Diluted
Loss Per Share
Loss
available
to common stockholders
Per
share
amount
The
Company
has a formula based profit sharing bonus plan for officers and key
employees.
For fiscal years ended September 30, 2012, 2011 and 2010, the formula
produced
no bonus distribution.
The
bonus
distribution is determined by the Compensation Committee of the Board
of Directors.
12. SEGMENT AND RELATED INFORMATION
The Company's four business units have a common management team and infrastructure. The indicators and gauges unit has different technologies and customers than the other business units. Therefore, the business units have been aggregated into two reportable segments: 1.) indicators and gauges and 2.) automotive related diagnostic tools and equipment. The Company's management evaluates segment performance based primarily on operating earnings before taxes. Non-operating items such as interest income and interest expense are included in general corporate expenses. Depreciation expense on assets used in manufacturing are considered part of each segment's operating performance. Depreciation expense on non-manufacturing assets are included in general corporate expenses.
Indicators and Gauges
This segment consists of products manufactured and sold primarily to companies in the aircraft and locomotive industry. Within the aircraft market, the primary customers are those companies that manufacture or service business and pleasure aircraft. Within the locomotive market, indicators and gauges are sold to both original equipment manufacturers and to operators of railroad equipment.
Automotive Diagnostic Tools and Equipment
This segment consists primarily of products designed and manufactured to support the testing or servicing of automotive systems using electronic means to measure vehicle parameters. These products are sold to OEMs and to the aftermarket using several brand names and a variety of distribution methods. Included in this segment are products used for state required testing of vehicle emissions.
Information
by industry segment is set forth below:
Years
Ended
September
30,
Net
Sales
Indicators
and
Gauges
Automotive
Diagnostic Tools and Equipment
Income
(Loss)
Before
Provision for Income Taxes
Indicators
and
Gauges
Automotive
Diagnostic
Tools and Equipment
General
Corporate
Expenses
Asset
Information
:
Years
Ended
September
30,
Identifiable
Assets
Indicators
and
Gauges
Automotive
Diagnostic Tools and Equipment
1,980,789
Corporate
769,151
758,268
Geographical Information :
Included
in
the consolidated financial statements are the following amounts related
to
geographic locations:
Years
Ended
September
30,
Revenue:
United
States
of
America
Australia
14,018
26,945
44,377
Canada
England
-
28,924
-
Mexico
36,960
23,520
1,681
Taiwan
34,935
-
-
Other
foreign
countries
All
export
sales to Australia, Canada, England, Mexico, Taiwan and other foreign
countries are
made in United States of America Dollars.
The Company was a named defendant along with numerous other companies in a suit in the State of New York regarding asbestos harm to the plaintiff. The Company was dismissed from the suit in July 2012.
The
Company is a named defendant along with numerous other companies in a
suit in the State of Michigan regarding asbestos harm to the plaintiff.
The Company has engaged a Michigan attorney to provide representation.
The Company believes the suit is without merit and expects it will be
able to obtain a dismissal for similar reasons as the dismissal in the
New York action.
15. BUSINESS CONDITION
AND
MANAGEMENT PLAN
|
First
|
Second
|
Third
|
Fourth
|
||
|
|
|||||
| Net Sales | |||||
|
|
$1,181,501
|
$1,178,538
|
$1,271,803
|
$1,129,447
|
|
|
|
1,112,643
|
1,312,896
|
1,276,544
|
1,366,530
|
|
|
|
1,636,717
|
1,394,060
|
1,390,355
|
837,880
|
|
| Gross Profit | |
||||
|
|
392,712
|
402,681
|
479,189
|
482,546 | |
|
|
422,618
|
552,725
|
483,899
|
582,854
|
|
|
|
876,542
|
528,246
|
642,349
|
271,148
|
|
| Net Income (Loss) | |||||
|
|
(183,140)
|
(224,781)
|
(170,975)
|
(205,070)
|
|
|
|
(317,982)
|
(213,681)
|
(125,949)
|
(14,923)
|
|
|
|
64,709
|
(335,542)
|
(151,479)
|
(527,184)
|
|
| Net Income (Loss) per Common Share | |||||
| Basic | |||||
|
|
(.15)
|
(.16)
|
(.12)
|
(.14)
|
|
|
|
(.25)
|
(.17)
|
(.10)
|
(.02)
|
|
|
|
.05
|
(.27)
|
(.12)
|
(.42)
|
|
| Diluted | |||||
|
|
(.15)
|
(.16)
|
(.12)
|
(.14)
|
|
|
|
(.25)
|
(.17)
|
(.10)
|
(.02)
|
|
|
|
.05 |
(.27)
|
(.12)
|
(.42)
|
|
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not
Applicable.
ITEM
9A.
CONTROLS AND PROCEDURES.
As
of September 30,
2012,
an evaluation was performed, under the supervision and with the
participation of the Company's management, including the Company's
Chief Executive Officer along with the Company's Vice President,
Finance and Chief Financial Officer, of the effectiveness of the design
and operation of the Company's
disclosure controls and procedures. Based upon that evaluation, the
Company's
management, including the Chief Executive Officer along with the
Company's Vice President, Finance and Chief Financial Officer,
concluded that the Company's disclosure controls and procedures as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended ("Exchange Act") were effective as of September
30, 2012 to ensure that information required
to be disclosed by the Company in reports that it files and submits
under
the Exchange Act is (1) recorded, processed, summarized and reported,
within
the time periods specified in the Commission's rules and forms, and (2)
is
accumulated and communicated to the Company's management, including its
principal
executive and principal financial officer, as appropriate to allow
timely
decisions regarding required disclosure. There were no changes in the
Company's
internal controls over financial reporting during the fourth fiscal
quarter
ended September 30, 2012 that have materially affected, or are
reasonably
likely to materially affect the Company's internal control over
financial
reporting.
The
Company's internal
control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external reporting purposes in
accordance with generally accepted accounting principles. The Company's
internal control over financial reporting includes
policies and procedures that (1) pertain to maintaining records that,
in reasonable
detail, accurately and fairly reflect the transactions and dispositions
of
the Company assets, (2) provide reasonable assurance that transactions
are
recorded as necessary to permit preparation of financial statements in
accordance
with generally accepted accounting principles, and that the Company's
receipts
and expenditures are being made only in accordance with authorization
of
the Company's management and directors, and (3) provide reasonable
assurance regarding prevention or the timely detection of unauthorized
acquisition, use or disposal of the company's assets that could have a
material effect on the financial statements.
Management, including the Company's Chief Executive Officer along with the Company's Vice President, Finance and Chief Financial Officer, does not expect that the Company's internal controls will prevent or detect all errors and all fraud. An internal control system no matter how well designed and operated can provide only reasonable, not absolute, assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, collusion of two or more people, or by management override of the control. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Hickok Incorporated is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Under the supervision and with the participation of management, including the Company's Chief Executive Officer along with the Company's Vice President, Finance and Chief Financial Officer, we conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of September 30, 2012, as required by Rule 13a-15(c) of the Securities Exchange Act of 1934, as amended. In making this assessment, we used the criteria set forth in the framework in Internal Control-Integrated Framework for Small Public Companies issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control-Integrated Framework for Small Public Companies, our management concluded that our internal control over financial reporting was effective as of September 30, 2012.
This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.
/s/ R. L. Bauman
R.
L. Bauman
Chief Executive Officer
/s/ G. M. Zoloty
G.
M. Zoloty
Chief Financial Officer
January
14, 2013
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The information required by this Item 10 as to the Directors of the Company is incorporated herein by reference to the information set forth under the caption "Information Concerning Nominees for Directors" in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on February 27, 2013, since such Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company's fiscal year pursuant to Regulation 14A. Information required by this Item 10 as to the Executive Officers of the Company is included in Part III of this Annual Report on Form 10-K. Information required by this Item as to the Audit Committee, the Audit Committee financial expert, the procedures for recommending nominees to the Board of Directors and compliance with Section 16(a) of the Exchange Act is incorporated herein by reference to the information set forth under the captions "Information Regarding Meetings and Committees of the Board of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on February 27, 2013.
The
Company
has
historically operated under informal ethical guidelines, under which
the
Company's principal executive, financial, and accounting officers, are
held accountable. In accordance with these guidelines, the Company has
always
promoted honest, ethical and lawful conduct throughout the organization
and
has adopted a written Code of Ethics
for the Chief
Executive
Officer and Chief Financial Officer.
In
addition,
the
Company adopted and the Board of Directors approved a written Code of
Business Conduct for all officers and employees. The Company also
implemented a system to address the "Whistle Blower" provision of the
Sarbanes-Oxley Act of 2002.
EXECUTIVE OFFICERS OF THE REGISTRANT
| OFFICE | OFFICER | AGE |
| President and Chief Executive Officer | Robert L. Bauman | 72 |
| Vice President, Finance and Chief Financial Officer | Gregory M. Zoloty | 60 |
| Vice President, Manufacturing | James F. Allen |
50 |
| Vice President, Sales and Marketing |
Patrick R.
Bauman |
42 |
| Vice President,
Engineering |
George
R. Hart |
55 |
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item 11 is incorporated by reference to the information set forth under the caption "Executive Compensation" in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on February 27, 2013, since such Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company's fiscal year pursuant to Regulation 14A.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Equity Compensation Plan Information
The
following table
provides
information as of September 30, 2012 with respect to compensation plans
(including
individual compensation arrangements) under which Common Stock of the
Company
is authorized for issuance under compensation plans previously approved
and
not previously approved by shareholders of the Company.
Plan
category
Number
of securities to be issued upon exercise of
outstanding
options, warrants and rights
Weighted-average exercise price of outstanding options,
warrants
and rights
Number
of securities remaining available for future issuance
under
equity compensation plans (excluding securities reflected in column
(a))
________________________________________________________________________________
Equity
compensation
plans approved by security holders
Equity
compensation
plans not approved by security holders
Total
Other information required by this Item 12 is incorporated by reference to the information set forth under the captions "Principal Shareholders" and "Share Ownership of Directors and Officers" in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on February 27, 2013, since such Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company's fiscal year pursuant to Regulation 14A.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The
information
required by this Item 13 is incorporated by reference to the
information
set forth under the caption "Transactions with Management" in the
Company's definitive Proxy Statement for the Annual Meeting of
Shareholders to be held
on February 27, 2013,
since
such Proxy
Statement will be filed with the Securities and Exchange Commission not
later than 120 days after the end of the Company's fiscal year pursuant
to Regulation 14A.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The information required by this Item 14 is incorporated by reference to the information set forth under the caption "Independent Public Accountants" in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on February 27, 2013, since such Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company's fiscal year pursuant to Regulation 14A.ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) (1) FINANCIAL STATEMENTS
The
following
Consolidated
Financial Statements of the Registrant and its subsidiaries are
included
in Part
II, Item 8:
Report
of
Independent
Registered Public Accounting Firm
F-1
Consolidated
Balance
Sheet - As of September 30, 2012 and 2011
F-2
Consolidated
Statement
of Income - Years Ended September 30, 2012, 2011 and 2010
F-4
Consolidated
Statement
of Stockholders' Equity - Years Ended
September
30, 2012, 2011 and 2010
F-5
Consolidated
Statement
of Cash Flows - Years Ended September 30, 2012, 2011 and 2010
F-6
Notes
to
Consolidated
Financial Statements
F-8
(a) (2) FINANCIAL STATEMENT SCHEDULES
The following Consolidated Financial Statement Schedules of the Registrant and its subsidiaries are included in Item 15 hereof.
SEQUENTIAL
PAGE
Report
of
Independent
Registered Public Accounting Firm
as to
Schedules
Schedule II - Valuation and Qualifying Accounts
All other Schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions or are
inapplicable, and therefore have been omitted.
Pursuant to the
requirements of
Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to
be signed
on its behalf by the undersigned, thereunto duly authorized.
HICKOK
INCORPORATED
By: /s/
Robert
L. Bauman
Robert
L. Bauman
President
and Chief Executive Officer
Date: January 14, 2013
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on the 14th day of January, 2013:
| SIGNATURE: | TITLE |
| /s/ Janet H. Slade | Chairman |
| Janet H. Slade | |
| /s/ Robert L. Bauman | President and Chief Executive Officer |
| Robert L. Bauman | (Principal Executive Officer) |
| /s/ Gregory M. Zoloty | Vice President and Chief Financial |
| Gregory M. Zoloty | Officer |
| (Principal Financial and Accounting Officer) | |
| /s/ Edward F.
Crawford |
Director |
| Edward F. Crawford |
|
| /s/ Jennifer A.
Elliott |
Director |
| Jennifer A. Elliott |
|
| /s/ T. Harold Hudson | Director |
| T. Harold Hudson | |
| /s/ James T. Martin | Director |
| James T. Martin | |
| /s/ Steven H. Rosen |
Director |
| Steven H. Rosen |
|
| /s/ Kirin M. Smith | Director |
| Kirin M. Smith |
| EXHIBIT NO.: | DOCUMENT |
| 3(a) |
Amended
Articles of Incorporation. |
|
| 3(b) |
Amended
and Restated Code of Regulations. |
|
| 10(a) | Hickok Incorporated 1997 Key Employees Stock Option Plan (incorporated herein by reference to the appropriate exhibit to the Company's Registration Statement on Form S-8 as filed with the Commission on September 17, 1998). | |
| 10(b) | Hickok Incorporated 2000 Outside Directors Stock Option Plan (incorporated herein by reference to the appropriate exhibit to the Company's Registration Statement on Form S-8 as filed with the Commission on June 6, 2001). | |
| 10(c) | Hickok Incorporated 2000 Key Employees Stock Option Plan (incorporated herein by reference to the appropriate exhibit to the Company's Registration Statement on Form S-8 as filed with the Commission on June 6, 2001). | |
| 10(d) | Hickok
Incorporated 2003 Outside Directors Stock Option Plan (incorporated
herein by reference to the appropriate exhibit to the Company's
Registration Statement on Form S-8 as filed with the Commission on June
9, 2005). |
|
| 10(e) | Hickok Incorporated 2010 Outside Directors Stock Option Plan (incorporated herein by reference to Appendix A of the Company's definitive proxy statement for its 2010 annual meeting of shareholders as filed with the Commission on January 26, 2010). | |
| 10(f) |
Convertible Loan Agreement, dated December 30, 2011, among the Company, the Investors, and solely with respect to Section 3 thereof, Robert L. Bauman (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 5, 2012) effective through December 30, 2012. | |
| 10(g) |
Convertible Promissory Note, dated December 30, 2011, issued by the Company to Roundball in the principal amount of $466,879.87 (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 5, 2012) effective through December 30, 2012. | |
| 10(h) |
Convertible Promissory Note, dated December 30, 2011, issued by the Company to the Aplin Trust in the principal amount of $208,591.20 (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 5, 2012) effective through December 30, 2012. | |
| 10(i) |
Registration Rights Agreement, dated December 30, 2011, among the Company and the Investors (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 5, 2012) effective through December 30, 2012. | |
| 10(j) |
Voting Agreement, dated December 30, 2011, among the Company, the Investors and the Class B Shareholders of the Company (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 5, 2012) effective through December 30, 2012. | |
| 10(k) |
Subscription Agreement, dated December 30, 2011, between the Company and Roundball (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 5, 2012) effective through December 30, 2012. | |
| 10(l) |
Form of Employment Agreement (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 5, 2012). | |
| 10(m) |
Revolving Credit Agreement, dated January 9, 2012, by and between the Company and Robert L. Bauman (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 9, 2012) effective through April 13, 2013. | |
| 10(n) |
Revolving Credit Promissory Note, dated January 9, 2012, by and between the Company and Robert L. Bauman (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 9, 2012) effective through April 13, 2013. | |
| 10(o) |
Revolving Credit Agreement, dated December 30, 2012, by and between the Company and Robert L. Bauman (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 4, 2013) effective through December 31, 2013. | |
| 10(p) | Warrant Agreement, dated December 30, 2012, by and between the Company and Robert L. Bauman (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 4, 2013) effective through December 30, 2015. | |
| 10(q) |
Amendment No. 1 to Convertible Loan Agreement, dated December 30, 2012, by and between the Company and Roundball, LLC. (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 4, 2013) effective through December 30, 2013. | |
| 10(r) | Warrant Agreement, dated December 30, 2012, by and between the Company and Roundball, LLC. (incorporated herein by reference to the appropriate exhibit to the Company's Form 8-K as filed with the Commission on January 4, 2013) effective through December 30, 2015. | |
| 11 | Computation of Net Income Per Common Share. | |
| 14 |
Hickok
Incorporated
Financial
Code of Ethics for the Chief Executive Officer and Specified Financial
Officers. |
|
| 21 | Subsidiaries of the Registrant. | |
| 23 | Consent of Independent Registered Public Accounting Firm. | |
| 31.1 | Rule 13a-14(a)/15d-14(a)Certification by the Chief Executive Officer. | |
| 31.2 | Rule 13a-14(a)/15d-14(a)Certification by the Chief Financial Officer. | |
| 32.1 | Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2 | Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS* |
XBRL Instance |
|
| 101.SCH* |
XBRL Taxonomy Extension Schema |
|
| 101.CAL* |
XBRL Taxonomy Extension Calculation |
|
| 101.DEF* |
XBRL Extension Definition |
|
| 101.LAB* |
XBRL Taxonomy Extension Labels |
|
| 101.PRE* |
XBRL Taxonomy Extension Presentation |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AS TO CONSOLIDATED SCHEDULES
To
the
Shareholders
and Board of Directors
Hickok
Incorporated
Cleveland,
Ohio
We
have audited the
consolidated
financial statements of HICKOK INCORPORATED (the "Company") as of
September
30, 2012 and 2011, and for each of the years in the three-year period
ended
September 30, 2012, and have issued our report thereon dated
January 3, 2013;
such
consolidated financial statements and report are included in Part
II, Item 8
of
this Form 10-K. Our audits also included the consolidated financial
statement
schedules ("schedules") of the Company listed
in
Part IV, Item 15.
These
schedules are the responsibility of the
Company's
management. Our responsibility is to express an opinion based on our
audits. In our opinion, such schedules, when considered in relation to
the basic financial
statements taken as a whole, present fairly in all material respects
the
information set forth therein.
/s/ Meaden & Moore, Ltd.
MEADEN
&
MOORE, Ltd.
Certified
Public
Accountants
January 3,
2013
Cleveland,
Ohio
HICKOK INCORPORATED
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Col. A Col. B Col. C Col. D Col. E
----------------------- ---------- ------------------------------- --------- ------------
Additions
-------------------------------
Balance at Charged to Charged to Balance
Beginning Costs and Other at End
Description of Period Expenses Accounts Deductions of Period
----------------------------- ---------- ------------ ------------ ----------- ------------
Deducted from Asset Accounts:
Year Ended September 30, 2010
------------------------------
Reserve for doubtful accounts $ 10,000 $ (38) (1) $ - (2) $ (38) (3) $ 10,000
Reserve for inventory obsolescence $ 455,000 $ 154,086 $ - $ 229,086 (4) $ 380,000
Reserve for product warranty $ 4,482 $ 3,602 $ - $ 4,669 $ 3,415
Valuation allowance deferred taxes $3,483,200 $ 310,500 $ - $ - $3,793,700
Year Ended September 30, 2011
------------------------------
Reserve for doubtful accounts $ 10,000 $ 8,313 (1) $ - (2) $ 8,313 (3) $ 10,000
Reserve for inventory obsolescence $ 380,000 $ 334,568 $ - $ 568 (4) $ 714,000
Reserve for product warranty $ 3,415 $ 163 $ - $ 2,585 $ 993
Valuation allowance deferred taxes $3,793,700 $ 255,600 $ - $ - $4,049,300
Year Ended September 30, 2012
------------------------------
Reserve for doubtful accounts $ 10,000 $ 374 (1) $ - (2) $ 374 (3) $ 10,000
Reserve for inventory obsolescence $ 714,000 $ 185,697 $ - $ 48,697 (4) $ 851,000
Reserve for product warranty $ 993 $ 7,565 $ - $ 8,107 $ 451
Valuation allowance deferred taxes $4,049,300 $ 187,400 $ - $ - $4,236,700
(1) Classified as bad debt expense.
(2) Recoveries on accounts charged off in prior years.
(3) Accounts charged off during year as uncollectible.
(4) Inventory charged off during the year as obsolete.
AMENDED
ARTICLES OF INCORPORATION
OF
HICKOK INCORPORATED
FIRST: The name of the Corporation is Hickok Incorporated.
SECOND: The principal office of the Corporation shall be located in the City of Cleveland, Cuyahoga County, Ohio.
THIRD:
The purpose or purposes for which, or for any of which, it is formed
are to enter into, promote or conduct any kind of business, contract or
undertaking permitted to corporations for profit organized under the
General Corporation Laws of the State of Ohio, to engage in any lawful
act or activity for which corporations may be formed under Sections
1701.01 to 1701.98, inclusive, of the Revised Code of Ohio, and, in
connection therewith, to exercise all express and incidental powers
normally permitted such corporations.
FOURTH: (a) The maximum number of shares which the Corporation is authorized to have outstanding is as follows:
10,000,000 Class A shares of common capital stock, without par value
2,500,000 Class B shares of common capital stock, without par value
1,000,000 shares of preferred stock, without par value
(b) The aforesaid Class A and Class B shares shall be issued subject to and qualified by, the rights, powers and preferences of the holders of the preferred stock set forth herein and as may be designated by resolution of the Board of Directors with respect to any series of preferred stock as authorized herein, and shall also be issued subject to and qualified by the following provisions which shall be incorporated into each certificate issued to the holder of such shares:
(i) Dividends. Holders of Class A common capital stock are entitled to receive, when and as declared by the Board of Directors of the Corporation out of any funds legally available therefor, cash dividends of ten cents per share for each full fiscal year, such dividends to be non-cumulative. After any of the said dividends have been declared and paid or set aside, then for the same full fiscal year, one or more cash dividends may be paid to the holders of the Class B common capital stock up to the total paid to the holders of Class A common capital stock in the same period. Thereafter, for that full fiscal year the holders of Class A and Class B common capital stock shall be entitled to the payment of the same dividend or dividends per share, when and as declared by the Board of Directors. Notwithstanding the foregoing, the holders of Class A common capital stock shall be entitled to no preference with respect to the payment of stock dividends and such stock dividends when and as declared, paid or ordered by the Board of Directors, shall be distributed to the holders of Class A and Class B common capital shares on a share-for-share basis.
(ii)
Voting. Except as hereinafter provided,
each share of the Class A common capital stock of the Corporation shall
be entitled to one vote for each share thereof; and except as otherwise
hereinafter provided, each share of the Class B common stock of the
Corporation shall be entitled to three votes for each share thereof.
Except as otherwise expressly provided in the Articles of Incorporation
(as amended) or as otherwise required by Ohio law, the holders of Class
A and Class B shares of stock shall vote on all matters as though all
of said shares were of one class; and in any such voting as though all
of said shares were of one class, the voting shall be on the aforesaid
basis of one vote for each share of Class A common capital stock and
three votes for each share of Class B common capital stock.
Notwithstanding the foregoing, the written consent or the affirmative
vote of the holders of two-thirds of the Class A common capital stock,
at the time outstanding, shall be required to effect or validate any
one or more of the following: (a) The issuance of any additional shares
of Class B common capital stock; (b) The alteration of any of the
powers, preferences or rights of the shares of Class A common capital
stock in any manner substantially prejudicial to the holders thereof;
or (c) The voluntary liquidation of the Corporation or the sale, lease
or conveyance of all or substantially all of the properties and
business of the Corporation.
(iii) Conversion of Class B shares. Each share of Class B common capital stock shall be convertible at the option of the holder and at any time, into Class A common capital stock on a share-for-share basis. In the event each of the outstanding shares of the Class A common capital stock shall be changed into or exchanged for a different number or kind of shares of stock, or other securities of the Corporation, or of another corporation, whether through reorganization, recapitalization, stock dividend, stock split, combination of shares, merger or consolidation, then for the purposes of the said option there shall be substituted for each share of Class A common capital stock, the number and kind of shares of stock or other securities into which each such share of Class A common capital stock of the Corporation shall be so changed or increased, or for which each such share shall be so exchanged, and the shares or securities so substituted for each such share of Class A common capital stock shall be subject to the conversion option hereinabove provided. Upon conversion, no adjustments will be made for dividends theretofore declared, and no fractions of shares shall be issued. In lieu of fractions of shares, the Corporation shall make a cash adjustment on the basis of the market value of the Class A shares of the conversion date.
(iv) Preemptive Rights. No holder of Class A or Class B shares of this Corporation shall have any preemptive rights with respect to such shares except as hereinabove expressly authorized.
(v) Other. Notwithstanding the foregoing terms of this Article Fourth, the Corporation may issue shares of Class B common capital stock to give effect to a share dividend, stock split or other non-cash distribution without the written consent or the affirmative vote of the holders of the Corporation's Class A common capital stock, provided such share dividend, stock split or non-cash distribution is equal for both the Class A common capital stock and the Class B common capital stock, on a per share basis. Notwithstanding the foregoing terms of this Article Fourth, in the event the Corporation shall pay a dividend or make a distribution on its Class A common capital stock that is paid or made in Class A common capital stock of the Corporation, an adjustment to the ten cents per share of Class A common capital stock dividend amount set forth above shall automatically occur such that the product of ten cents per share of Class A common capital stock (or the adjusted amount in effect immediately prior to the authorization of such dividend or distribution, if previously adjusted) multiplied by the number of shares of Class A common capital stock outstanding immediately prior to the payment of such dividend or distribution shall be the same as the product of the adjusted per share amount multiplied by the number of shares of Class A common capital stock outstanding immediately following the payment of such dividend or distribution. Any adjustment made pursuant to this Article Fourth shall become effective immediately following the record date relating to such change.
(c)
Serial Preferred Stock. Shares of
preferred stock may be issued from time to time in one or more series,
each of such series to consist of such number of shares and to have
such terms, rights, powers and preferences, and the qualifications and
limitations with respect thereto, as stated or expressed herein and in
the resolution or resolutions providing for the issue of such series
adopted by the Board of Directors of the Corporation as hereinafter
provided. Any shares of preferred stock which may be redeemed,
purchased or acquired by the Corporation may be reissued except as
otherwise provided by law or by the terms of any series of Preferred
Stock. Authority is hereby expressly granted to the Board of Directors
from time to time to issue the preferred stock in one or more series,
and in connection with the creation of any such series, by resolution
or resolutions providing for the issue of the shares thereof, to
determine and fix such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, including, without limitation thereof, dividend
rights, special voting rights, conversion rights, redemption privileges
and liquidation preferences, as shall be stated and expressed in such
resolutions, all to the full extent now or hereafter permitted by Ohio
law. Without limiting the generality of the foregoing, and subject to
the rights of any series of preferred stock then outstanding, the
resolutions providing for issuance of any series of preferred stock may
provide that such series shall be superior or rank equally or be junior
to the preferred stock of any other series to the extent permitted by
law.
FIFTH: The Corporation may purchase, from time to time, and to the extent permitted by the laws of Ohio, shares of any class of stock issued by it. Such purchases may be made either in the open market or at private or public sale, and in such manner and amounts, from such holder or holders of outstanding shares of the Corporation and at such prices as the Board of Directors of the Corporation shall from time to time determine, and the Board of Directors is hereby empowered to authorize such purchases from time to time without any vote of the holders of any class of shares now or hereafter authorized and outstanding at the time of any such purchase.
SIXTH: Notwithstanding any provision of the laws of the State of Ohio requiring a greater percentage and except as expressly prohibited by law, any action to be taken by the vote of the holders of shares of the Corporation or of any class or classes of shares thereof may be taken by vote of the holders of shares entitling them to exercise a majority of the voting power of the Corporation or of such class or classes.
SEVENTH: Section 1701.831 of the Revised Code of Ohio shall not apply to any control share acquisition (as defined in Section 1701.01(Z)(1) of the Revised Code of Ohio, as the same may be amended from time to time, or in any successor thereto, however denominated) of shares of any class of capital stock of the Corporation.
AMENDED AND RESTATED CODE OF REGULATIONS
OF
HICKOK INCORPORATED
ARTICLE I
Fiscal Year
The fiscal year of the Corporation shall be the twelve months ending September 30 in each year, or such other period as the Board of Directors may designate by resolution.
ARTICLE II
Shareholders
Section 1. Meetings of Shareholders.
(a) Annual Meeting. The annual meeting of the Shareholders of this Corporation, for the election of Directors, the consideration of financial statements and other reports, and the transaction of such other business as may properly be brought before such meeting, shall be held at such time on such date within six (6) months after the close of the Corporation's fiscal year as the Board of Directors shall designate by appropriate notice. Upon due notice there may also be considered and acted upon at an annual meeting any matter which could properly be considered and acted upon at a special meeting, in which case and for which purpose the annual meeting shall also be considered as, and shall be, a special meeting. In the event that the annual meeting is not held or if Directors are not elected thereat, a special meeting may be called and held for that purpose. (1701.39, 1701.38(A))
(b) Special Meeting. Special meetings of the Shareholders may be held on any business day when called by any person or persons who may be authorized by law to do so. Calls for special meetings shall specify the purpose or purposes thereof, and no business shall be considered at any such meeting other than that specified in the call therefor. (1701.40(A), 1701.41)
(c) Place of Meetings. Any meeting of Shareholders may be held at such place within or without the State of Ohio as may be designated in the Notice of said meeting. (1701.40(B))
(d) Notice of Meeting and Waiver of Notice.
(1) Notice. Written notice of the time, place and purposes of any meeting of Shareholders shall be given to each Shareholder entitled thereto not less than seven (7) days nor more than sixty (60) days before the date fixed for the meeting and as prescribed by law. Such notice shall be given either by personal delivery or mailed to each Shareholder entitled to notice of or to vote at such meeting. If such notice is mailed, it shall be directed, postage prepaid, to the Shareholders at their respective addresses as they appear upon the records of the Corporation, and notice shall be deemed to have been given on the day so mailed. If any meeting is adjourned to another time or place, no notice as to such adjourned meeting need be given other than by announcement at the meeting at which such an adjournment is taken. No business shall be transacted at any such adjourned meeting except as might have been lawfully transacted at the meeting at which such adjournment was taken. (1701.41(A), 1701.02)
(2) Notice to Joint Owners. All notices with respect to any shares to which persons are entitled by joint or common ownership may be given to that one of such persons who is named first upon the books of this Corporation, and notice so given shall be sufficient notice to all the holders of such shares.
(3) Waiver. Notice of any meeting, however, may be waived in writing by any Shareholder either before or after any meeting of Shareholders, or by attendance at such meeting without protest prior to the commencement thereof. (1701.42)
(e) Shareholders Entitled to Notice and to Vote. If a record date shall not be fixed or the books of the Corporation shall not be closed against transfers of shares pursuant to statutory authority, the record date for the determination of Shareholders entitled to notice of or to vote at any meeting of Shareholders shall be the close of business on the twentieth day prior to the date of the meeting and only Shareholders of record at such record date shall be entitled to notice of and to vote at such meeting. Such record date shall continue to be the record date for all adjournments of such meeting unless a new record date shall be fixed and notice thereof and of the date of the adjourned meeting be given to all Shareholders entitled to notice in accordance with the new record date so fixed. (1701.45(A)(C)(E))
(f) Quorum. At any meeting of Shareholders, the holders of shares entitling them to exercise a majority of the voting power of the Corporation, present in person or by proxy, shall constitute a quorum for such meeting; provided, however, that no action required by law, the Articles, or these Regulations to be authorized or taken by the holders of a designated proportion of the shares of the Corporation may be authorized or taken by a lesser proportion. The Shareholders present in person or by proxy, whether or not a quorum be present, may adjourn the meeting from time to time without notice other than by announcement at the meeting. (1701.51)
(g) Organization of Meetings.
(1) Presiding Officer. The Chairman of the Board, or in his absence, the President, or in the absence of both of them, a Vice President of the Corporation shall call all meetings of the Shareholders to order and shall act as Chairman thereof. If all are absent, the Shareholders shall select a Chairman.
(2) Minutes. The Secretary of the Corporation, or, in his absence, an Assistant Secretary, or, in the absence of both, a person appointed by the Chairman of the meeting, shall act as Secretary of the meeting and shall keep and make a record of the proceedings thereat.
(h) Order of Business. The order of business at all meetings of the Shareholders, unless waived or otherwise determined by a vote of the holder or holders of the majority of the number of shares entitled to vote present in person or represented by proxy, shall be as follows:
1. Call meeting to order.
2. Selection of Chairman and/or Secretary, if necessary.
3. Proof of notice of meeting and presentment of affidavit thereof.
4. Roll call, including filing of proxies with Secretary.
5. Upon appropriate demand, appointment of inspectors of election. (1701.50)
6. Reading, correction and approval of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of Directors.
9. Unfinished business, if adjourned meeting.
10. Consideration in sequence of all other matters set forth in the call for and written notice of the meeting.
11. Adjournment.
(i) Voting. Except as provided by statute or in the Articles, every Shareholder entitled to vote shall be entitled to cast one vote on each proposal submitted to the meeting for each share held of record by him on the record date for the determination of the Shareholders entitled to vote at the meeting. At any meeting at which a quorum is present, all questions and business which may come before the meeting shall be determined by a majority of votes cast, except when a greater proportion is required by law, the Articles, or these Regulations. (1701.44(A))
(j) Proxies. A person who is entitled to attend a Shareholders' meeting, to vote thereat, or to execute consents, waivers and releases, may be represented at such meeting or vote thereat, and execute consents, waivers, and releases, and exercise any of his rights, by proxy or proxies appointed by a writing signed by such person, or by his duly authorized attorney, as provided by the laws of the State of Ohio. (1701.48)
(k) List of Shareholders. At any meeting of Shareholders a list of Shareholders, alphabetically arranged, showing the number and classes of shares held by each on the record date applicable to such meeting shall be produced on the request of any Shareholder. (1701.37(B))
Section 2. Action of Shareholders Without a Meeting.
Any action which may be taken at a meeting of Shareholders may be taken without a meeting if authorized by a writing or writings signed by all of the holders of shares who would be entitled to notice of a meeting for such purpose, which writing or writings shall be filed or entered upon the records of the Corporation. (1701.54)
ARTICLE III
Directors
Section 1. General Powers.
The business, power and authority of this Corporation shall be exercised, conducted and controlled by a Board of Directors, except where the law, the Articles or these Regulations require action to be authorized or taken by the Shareholders. (1071.59)
Section 2. Number, Election and Qualification of Directors.
(a) Number. The Board of Directors shall consist of not less than five nor more than ten members. At any Shareholders meeting called for the purpose of electing Directors, the Shareholders, by a vote of the holders of a majority of the voting power represented at the meeting, may fix or change the total number of Directors within the above limitation. In the event that the Shareholders fail to fix or change the number of Directors, the number of Directors then serving in office shall constitute the total number of Directors until further changed in accordance with this Section. In addition to the authority of the Shareholders to fix or change the number of Directors, the total number of Directors so determined may be increased or decreased between Shareholders' meetings by the Board of Directors at a meeting or by action without a meeting, and the total number of Directors as so changed shall be the total number of Directors until further changed in accordance with this Section. In the event that the Directors increase the total number of Directors, the Directors who are then in office may fill any vacancy created thereby. No reduction in the total number of Directors shall of itself have the effect of shortening the term of any incumbent Director.
(b) Election. Subject to the rights of Directors to elect additional Directors in accordance with Section 2(a) or Section 3(d), the Directors shall be elected at the Annual Meeting of Shareholders, or if not so elected, at a Special Meeting of Shareholders called for that purpose. At any meeting of Shareholders at which Directors are to be elected, the candidates receiving the greatest number of votes shall be elected.
(c) Qualification. Directors need not be Shareholders of the Corporation.
Section 3. Term of Office of Directors.
(a) Term. The term of office of each Director shall expire at the Annual Meeting of Shareholders in each year, and the Directors shall hold office for the respective terms to which elected and until their respective successors are elected and qualified, subject only to prior resignation, death or removal by the Directors as provided by law, and subject to the provisions of the Articles.
(b) Removal. With prior notice thereof, all the Directors or any individual Director may be removed with or without cause by the affirmative vote of the holders of shares representing a majority of the total voting power of the Corporation at any Special Meeting of Shareholders properly called for that purpose.
(c) Resignation. A resignation from the Board of Directors shall be deemed to take effect immediately or at such other time as the Director may specify.
(d) Vacancy. If any vacancy shall occur in the Board of Directors by death, resignation or as provided by law, the Articles or these Regulations, the remaining Directors shall constitute the Board of Directors until such vacancy is filled. The remaining Directors may fill any vacancy in the Board for the unexpired term.
Section 4. Meetings of Directors.
(a) Regular Meetings. A regular meeting of the Board of Directors shall be held immediately following the adjournment of the annual meeting of the Shareholders or a special meeting of the Shareholders at which Directors are elected. The holding of such Shareholders' meeting shall constitute notice of such Directors' meeting and such meeting may be held without further notice. Other regular meetings shall be held at such other times and places as may be fixed by the Directors. (1701.61)
(b) Special Meetings. Special meetings of the Board of Directors may be held at any time upon call of the Chairman of the Board, the President, any Vice President, or any two Directors. (1701.61(A))
(c) Place of Meeting. Any meeting of Directors may be held at any place within or without the State of Ohio in person and/or through any communications equipment if all persons participating in the meeting can hear each other. (1701.61(B))
(d) Notice of Meeting and Waiver of Notice. Notice of the time and place of any regular or special meeting of the Board of Directors (other than the regular meeting of Directors following the adjournment of the annual meeting of the Shareholders or following any special meeting of the Shareholders at which Directors are elected) shall be given to each Director by personal delivery, telephone, mail, telegram or cablegram at least forty-eight (48) hours before the meeting, which notice need not specify the purpose of the meeting. Such notice, however, may be waived in writing by any Director either before or after any such meeting, or by attendance at such meeting (including attendance (presence) by means of participation through any communications equipment as above provided) without protest prior to the commencement thereof. (1701.61(B)(C), 1701.42)
Section 5. Quorum and Voting.
At any meeting of Directors, not less than one-half of the whole authorized number of Directors is necessary to constitute a quorum for such meeting, except that a majority of the remaining Directors in office constitutes a quorum for filling a vacancy in the Board. At any meeting at which a quorum is present, all acts, questions and business which may come before the meeting shall be determined by a majority of votes cast by the Directors present at such meeting, unless the vote of a greater number is required by the Articles, Regulations or By-Laws. (1701.62)
Section 6. Committees.
(a) Appointment. The Board of Directors may from time to time appoint certain of its members (but in no event less than three) to act as a committee or committees in the intervals between meetings of the Board and may delegate to such committee or committees powers to be exercised under the control and direction of the Board. Each such committee and each member thereof shall serve at the pleasure of the Board.
(b) Executive Committee. In particular, the Board of Directors may create from its membership and define the powers and duties of an Executive Committee. During the intervals between meetings of the Board of Directors the Executive Committee shall possess and may exercise all of the powers of the Board of Directors in the management and control of the business of the Corporation to the extent permitted by law. All action taken by the Executive Committee shall be reported to the Board of Directors at its first meeting thereafter.
(c) Committee Action. Unless otherwise provided by the Board of Directors, a majority of the members of any committee appointed by the Board of Directors pursuant to this Section shall constitute a quorum at any meeting thereof and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of such committee. Action may be taken by any such committee without a meeting by a writing signed by all its members. Any such committee shall prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules prescribed by the Board of Directors, and shall keep a written record of all action taken by it. (1701.63)
Section 7. Action of Directors Without a Meeting.
Any action which may be taken at a meeting of Directors may be taken without a meeting if authorized by a writing or writings signed by all the Directors, which writing or writings shall be filed or entered upon the records of the Corporation. (1701.54)
Section 8. Compensation of Directors.
The Board of Directors may allow compensation for attendance at meetings or for any special services, may allow compensation to members of any committee, and may reimburse any Director for his expenses in connection with attending any Board or committee meeting. (1701.60)
ARTICLE IV
Officers
Section 1. General Provisions.
The Board of Directors shall elect a President, a Secretary and a Treasurer, and may elect a Chairman of the Board, one or more Vice-Presidents, and such other officers and assistant officers as the Board may from time to time deem necessary. The Chairman of the Board, if any, and the President shall be Directors, but no one of the other officers need be a Director. Any two or more offices may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument is required to be executed, acknowledged or verified by two or more officers. (1701.64(A))
Section 2. Powers and Duties.
All officers, as between themselves and the Corporation, shall respectively have such authority and perform such duties as are customarily incident to their respective offices, and as may be specified from time to time by the Board of Directors, regardless of whether such authority and duties are customarily incident to such office. In the absence of any officer of the Corporation, or for any other reason the Board of Directors may deem sufficient, the Board of Directors may delegate for the time being, the powers or duties of such officer, or any of them, to any other officer or to any Director. The Board of Directors may from time to time delegate to any officer authority to appoint and remove subordinate officers and to prescribe their authority and duties. Since the lawful purposes of this Corporation include the acquisition and ownership of real property, personal property and property in the nature of patents, copyrights, and trademarks and the protection of the Corporation's property rights in its patents, copyrights and trademarks, each of the officers of this Corporation is empowered to execute any power of attorney necessary to protect, secure, or vest the Corporation's interest in and to real property, personal property and its property protectable by patents, trademarks and copyright registration and to secure such patents, copyrights and trademark registrations. (1701.64(B)(1))
Section 3. Term of Office and Removal.
(a) Term. Each officer of the Corporation shall hold office during the pleasure of the Board of Directors, and unless sooner removed by the Board of Directors, until the meeting of the Board of Directors following the date of their election and until his successor is elected and qualified. (1701.64(A))
(b) Removal. The Board of Directors may remove any officer at any time, with or without cause by the affirmative vote of a majority of Directors in office. (1701.64(B)(2))
Section 4. Compensation of Officers.
Unless compensation is otherwise determined by a majority of the Directors at a regular or special meeting of the Board of Directors, or unless such determination is delegated by the Board of Directors to another officer or officers, the President of the Corporation from time to time shall determine the compensation to be paid to all officers and other employees for services rendered to the Corporation. (1701.60)
ARTICLE V
Indemnification of Directors, Officers, Employees, and Others
(a) Right of Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), by reason of the fact that he or she is or was a Director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another company or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an "Indemnitee"), whether the basis of such Proceeding is alleged action in an official capacity as a Director, officer, employee or agent or in any other capacity while serving as a Director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent permitted or required by the Ohio General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in paragraph (c) of this Article V with respect to Proceedings to enforce rights to indemnification, the Corporation shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board of Directors.
(b) Right to Advancement of Expenses. The right to indemnification conferred in paragraph (a) of this Article V shall include the right to be paid by the Corporation the expenses (including, without limitation, attorneys' fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an "Advancement of Expenses"); provided, however, that, if the Ohio General Corporation Law so requires, an Advancement of Expenses incurred by an Indemnitee in his or her capacity as a Director or officer (and not in any other capacity in which service was or is rendered by such Indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (an "Undertaking"), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a "Final Adjudication") that such Indemnitee is not entitled to be indemnified for such expenses under this paragraph (b) or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in paragraphs (a) and (b) of this Article V shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the Indemnitee's heirs, executors and administrators.
(c) Right of Indemnitee to Bring Suit. If a claim under paragraph (a) or (b) of this Article V is not paid in full by the Corporation within 60 calendar days after a written claim has been received by the Corporation, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (ii) any suit brought by the Corporation to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Corporation shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Ohio General Corporation Law. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or shareholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the Ohio General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or shareholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Corporation to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such Advancement of Expenses, under this Article V or otherwise shall be on the Corporation.
(d) Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Corporation's Articles of Incorporation, Code of Regulations, agreement, vote of shareholders or disinterested Directors or otherwise.
(e) Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any Director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Ohio General Corporation Law.
(f) Indemnification of Employees and Agents of the Corporation. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article V with respect to the indemnification and Advancement of Expenses of Directors and officers of the Corporation.
(g) Limitation of Liability. (i) No person shall be found to have violated his duties to the Corporation as a Director of the Corporation in any action brought against such Director (including actions involving or affecting any of the following: (A) a change or potential change in control of the Corporation; (B) a termination or potential termination of his or her service to the Corporation as a Director; or (C) his or her service in any other position or relationship with the Corporation), unless it is proven by clear and convincing evidence that the Director has not acted in good faith, in a manner he or she reasonably believes to be in or not opposed to the best interests of the Corporation, or with the care that an ordinarily prudent person in a like position would use under similar circumstances. Notwithstanding the foregoing, nothing contained in this paragraph (a) limits relief available under Section 1701.60 of the Ohio Revised Code.
(ii) In performing his duties, a Director shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, that are prepared or presented by: (A) one or more Directors, officers or employees of the Corporation whom the Director reasonably believes are reliable and competent in the matters prepared or presented; (B) counsel, public accountants, or other persons as to matters that the Director reasonably believes are within the person's professional or expert competence; or (C) a committee of the Directors upon which he or she does not serve, duly established in accordance with the provisions of these Regulations, as to matters within its designated authority, which committee the Director reasonably believes to merit confidence.
(iii) A Director in determining what he or she reasonably believes to be in the best interests of the Corporation shall consider the interests of the Corporation's Shareholders and, in his discretion, may consider (A) the interests of the Corporation's employees, suppliers, creditors and customers; (B) the economy of the state and nation; (C) community and societal considerations; and (D) the long-term as well as short-term interests of the Corporation and its Shareholders, including the possibility that these interests may be best served by the continued independence of the Corporation.
(iv) A Director shall be liable in damages for any action he or she takes or fails to take as a Director only if it is proven by clear and convincing evidence in a court of competent jurisdiction that his action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the Corporation or undertaken with reckless disregard for the best interests of the Corporation. Notwithstanding the foregoing, nothing contained in this paragraph (g) affects the liability of Directors under Section 1701.95 of the Ohio Revised Code or limits relief available under Section 1701.60 of the Ohio Revised Code.
ARTICLE VI
Securities Held by the Corporation
Section 1. Transfer of Securities Owned by the Corporation.
All endorsements, assignments, transfers, stock powers, share powers or other instruments of transfer of securities standing in the name of the Corporation shall be executed for and in the name of the Corporation by the President, by a Vice President, by the Secretary or by the Treasurer or by any other person or persons as may be thereunto authorized by the Board of Directors.
Section 2. Voting Securities Held by the Corporation.
The Chairman of the Board, President, any Vice President, Secretary or Treasurer, in person or by another person thereunto authorized by the Board of Directors, in person or by proxy or proxies appointed by him, shall have full power and authority on behalf of the Corporation to vote, act and consent with respect to any securities issued by other corporations which the Corporation may own. (1701.47(A))
ARTICLE VII
Share Certificates
Section 1. Transfer and Registration of Certificates.
The Board of Directors shall have authority to make such rules and regulations, not inconsistent with law, the Articles or these Regulations, as it deems expedient concerning the issuance transfer and registration of certificates for shares and the shares represented thereby and may appoint transfer agents and registrars thereof. (1701.14(A), 1701.26)
Section 2. Substituted Certificates.
Any person claiming that a certificate for shares has been lost, stolen or destroyed, shall make an affidavit or affirmation of that fact and, if required, shall give the Corporation (and its registrar or registrars and its transfer agent or agents, if any) a bond of indemnity, in such form and with one or more sureties satisfactory to the Board, and, if required by the Board of Directors, shall advertise the same in such manner as the Board of Directors may require, whereupon a new certificate may be executed and delivered of the same tenor and for the same number of shares as the one alleged to have been lost, stolen or destroyed. (1701.27, 1308.35)
ARTICLE VIII
Seal
The Directors may adopt a seal for the Corporation which shall be in such form and of such style as is determined by the Directors. Failure to affix any such corporate seal shall not affect the validity of any instrument. (1701.13(B))
ARTICLE IX
Consistency with Articles of Incorporation
If any provision of these Regulations shall be inconsistent with the Corporation's Articles of Incorporation (and as they may be amended from time to time), the Articles of Incorporation (as so amended at the time) shall govern.
ARTICLE X
Section Headings
The headings contained in this Code of Regulations are for reference purposes only and shall not be construed to be part of and/or shall not affect in any way the meaning or interpretation of this Code of Regulations.
ARTICLE XI
Amendments
Except as otherwise provided by law, by the Articles or by these Regulations, this Code of Regulations of the Corporation (and as it may be amended from time to time) may be repealed, amended or added to in any respect (i) by the Board of Directors (to the extent permitted by the Ohio General Corporation Law), or (ii) at any time at any meeting of shareholders by the affirmative vote of the holders of a majority of the voting power of the Corporation; provided, that any amendment or repeal proposed to be acted upon at any such meeting has been described or referred to in the notice of such meeting, or (iii) by the written consent of the shareholders of record in accordance with Ohio General Corporation Law. If an amendment or addition is adopted by written consent without a meeting of the Shareholders, it shall be the duty of the Secretary to enter the amendment or addition in the records of the Corporation, and to mail a copy of such amendment or addition to each Shareholder of record who would be entitled to vote thereon and did not participate in the adoption thereof. (1701.11)
| Years Ended September 30, |
2012 |
2011 |
2010 |
| NET INCOME |
|||
| Net loss applicable to common shares for basic
earnings per share |
$(783,966) |
$(672,535) |
$(949,496) |
| Net loss applicable to common shares for diluted
earnings per share |
$(783,966) |
$(672,535) |
$(949,496) |
| SHARES OUTSTANDING |
|||
| Weighted average shares for basic earnings per share |
1,372,812 |
1,248,095 |
1,248,095 |
| Net effect of dilutive
stock options - based on the treasury stock method using year-end
market
price, if higher than average market price |
-* |
-* |
-* |
| Total shares for diluted earnings per share |
1,372,812 |
1,248,095 |
1,248,095 |
| Basic Earnings Per Common Share |
$(.57) |
$(.54) |
$(.76) |
| Diluted Earnings Per Common Share |
$(.57) |
$(.54) |
$(.76) |
| * Net effect of stock
options was antidilutive for the period. |
|||
HICKOK INCORPORATED
Subsidiaries of Registrant COMPANY NAME STATE OF INCORPORATION Supreme Electronics Corp. Mississippi Waekon Corp. Ohio
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the use in the Form 10-K of Hickok Incorporated (the "Company") for the fiscal
year ended September 30, 2012 and the incorporation by reference in the registration statement
on Form S-8 (Nos. 33-68196, 333-63597 and 333-125672) of the Company of our report dated
January 3, 2013, with respect to the consolidated balance sheets of Hickok Incorporated as of
September 30, 2012 and 2011, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the years in the three-year period ended September 30, 2012.
/s/ Meaden & Moore, Ltd.
MEADEN & MOORE, Ltd.
Independent Registered Public Accounting Firm
January 3, 2013
Cleveland, Ohio
I have reviewed this annual report
on Form 10-K of Hickok Incorporated (the
"registrant");
Based on my knowledge, this report
does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the
financial statements, and other financial information included in this
report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as
of, and for,
the periods presented in this report;
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such
disclosure
controls and
procedures, or caused such disclosure controls and procedures to
be
designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;
b) Designed such internal control over
financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
c) Evaluated the effectiveness of
the registrant's
disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
d) Disclosed in this report any
change in the registrant's internal control over financial
reporting that occurred during the registrant's most
recent
fiscal quarter
(the registrant's fourth fiscal quarter in the case of an
annual
report) that has materially affected, or is reasonably likely to
materially
affect, the registrant's internal control over financial
reporting;
and
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
By:
/s/ R. L. Bauman
R. L. Bauman
Chief Executive Officer
January 14,
2013
RULE 13a-14(a)/15d-14(a) CERTIFICATION
I have reviewed this annual report
on Form 10-K of Hickok Incorporated (the
"registrant");
Based on my knowledge, this report
does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the
financial statements, and other financial information included in this
report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as
of, and for,
the periods presented in this report;
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such
disclosure
controls and
procedures, or caused such disclosure controls and procedures to
be
designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;
b) Designed such internal control over
financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
c) Evaluated the effectiveness of
the registrant's
disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
d) Disclosed in this report any
change in the registrant's internal control over financial
reporting that occurred during the registrant's most
recent
fiscal quarter
(the registrant's
fourth fiscal quarter in the case of an
annual
report) that has materially affected, or is reasonably likely to
materially
affect, the registrant's internal control over financial
reporting;
and
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
By:
/s/ G. M. Zoloty
G. M. Zoloty
Vice President, Finance and Chief Financial Officer
January 14, 2013
Exhibit 32.1
CERTIFICATION 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 Annual Report of Hickok Incorporated (the "Company") on Form 10-K for the period ending September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert L. Bauman, Chief Executive 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:
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ R. L. Bauman
R. L. Bauman
Chief Executive Officer
January 14, 2013
Exhibit 32.2
CERTIFICATION 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 Annual
Report of Hickok Incorporated (the "Company") on Form 10-K for the
period
ending September 30, 2012 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Gregory M. Zoloty,
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:
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ G. M. Zoloty
G. M. Zoloty
Chief Financial Officer
January 14, 2013
|
Note 3 - Notes Receivable (Detail) - Summary of notes receivable: (USD $)
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|---|---|---|
| Total | $ 38,100 | |
| Less current portion | 3,600 | 2,400 |
| Long-term portion | 31,000 | 35,700 |
|
Current Employee [Member] | Total [Member]
|
||
| Total | 4,100 | |
|
Current Employee [Member]
|
||
| Total | 4,100 | |
|
Former Employee [Member] | Current Portion [Member]
|
||
| Current Portion | 3,600 | |
|
Former Employee [Member] | Total [Member]
|
||
| Total | 30,500 | |
|
Former Employee [Member]
|
||
| Total | 34,000 | |
|
Long Term Portion [Member] | Total [Member]
|
||
| Long-term portion | 31,000 | |
|
Long Term Portion [Member]
|
||
| Long-term portion | 35,700 | |
|
Current Portion [Member]
|
||
| Current Portion | 3,600 | |
| Less current portion | 2,400 | |
|
Total [Member]
|
||
| Total | 34,600 | |
| Less current portion | $ 3,600 |
|
Note 11 - Employee Benefit Plans (Detail) (USD $)
|
12 Months Ended | ||
|---|---|---|---|
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2010
|
|
| Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 15,178 | $ 17,009 | $ 15,380 |
|
Note 12 - Segment and Related Information (Detail)
|
12 Months Ended |
|---|---|
|
Sep. 30, 2012
|
|
| Number of Operating Segments | 4 |
| Number of Reportable Segments | 2 |
|
Note 16 - Quarterly Data (Unaudited) (Tables)
|
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|
Sep. 30, 2012
|
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| Schedule of Quarterly Financial Information [Table Text Block] |
|
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|
Note 12 - Segment and Related Information (Detail) - Asset information by industry segment: (USD $)
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|---|---|---|
| Identifiable Assets | ||
| Segment Identifiable Assets | $ 3,205,971 | $ 3,440,600 |
|
Total [Member]
|
||
| Identifiable Assets | ||
| Segment Identifiable Assets | 3,205,971 | 3,440,600 |
|
Indicators and Gauges [Member]
|
||
| Identifiable Assets | ||
| Segment Identifiable Assets | 850,186 | 701,543 |
|
Automotive Diagnostic Tools and Equipment [Member]
|
||
| Identifiable Assets | ||
| Segment Identifiable Assets | 1,586,634 | 1,980,789 |
|
Corporate [Member]
|
||
| Identifiable Assets | ||
| Segment Identifiable Assets | $ 769,151 | $ 758,268 |
|
Note 2 - Summary of Significant Accounting Policies (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2012
|
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| Schedule of Product Warranty Liability [Table Text Block] |
|
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| Schedule of Inventory, Current [Table Text Block] |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment, Estimated Useful Lives |
|
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|
Note 9 - Income Taxes (Detail) (USD $)
|
12 Months Ended | ||
|---|---|---|---|
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2010
|
|
| Deferred Tax Assets, Operating Loss Carryforwards, Domestic | $ 5,689,000 | ||
| Operating Loss Carryforwards | 480,000 | ||
| Valuation Allowance, Amount | 274,600 | 255,600 | 310,500 |
| Valuation Allowance, Deferred Tax Asset, Change in Amount | $ 187,400 |
|
Note 5 - Long-term Financing (Detail) (USD $)
|
9 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
|
Dec. 31, 2013
|
Sep. 30, 2013
|
Dec. 30, 2012
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2010
|
Dec. 30, 2011
|
Dec. 31, 2013
Common Class A [Member]
|
Feb. 28, 2012
Revolving Credit Facility [Member]
|
Sep. 30, 2012
Revolving Credit Facility [Member]
|
|
| Due to Related Parties, Current | $ 250,000 | |||||||||
| Line of Credit Facility, Maximum Amount Outstanding During Period | 250,000 | 250,000 | 250,000 | |||||||
| Line of Credit Borrowing Base | 250,000 | |||||||||
| Repayments of Lines of Credit | 250,000 | |||||||||
| Interest Expense | 5,956 | 7,610 | 542 | 5,338 | ||||||
| Interest Paid | 6,641 | 6,849 | 6,641 | |||||||
| Line of Credit Facility, Maximum Borrowing Capacity | $ 250,000 | |||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 0.24% | 0.20% | ||||||||
| Warrant Term | 3 years | 3 years | 3 years | |||||||
| Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 42,000 | 100,000 | ||||||||
| Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item) | 2.50 | |||||||||
|
Note 2 - Summary of Significant Accounting Policies (Detail) - Inventories are valued at the lower of cost (first-in, first-out) or market and consist of: (USD $)
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|---|---|---|
| Raw materials and component parts | $ 1,061,957 | $ 1,145,278 |
| Work-in-process | 451,733 | 515,885 |
| Finished products | 221,080 | 302,780 |
| $ 1,734,770 | $ 1,963,943 |
|
Note 9 - Income Taxes (Detail) - Deferred tax assets (liabilities) consist of the following: (USD $)
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2010
|
|---|---|---|---|
| Current: | |||
| Inventories | $ 295,300 | $ 244,300 | |
| Bad debts | (2,052) | (1,938) | (1,871) |
| Accrued liabilities | 45,600 | 39,200 | |
| Prepaid expense | (11,500) | (16,800) | |
| 332,800 | 270,100 | ||
| Valuation allowance | (332,800) | (270,100) | |
| Noncurrent: | |||
| Depreciation and amortization | 53,400 | 86,500 | |
| Research and development and other credit carryforwards | 1,716,300 | 1,700,400 | |
| Net operating loss carryforward | 1,934,200 | 1,709,000 | |
| Contribution carryforward | 163,200 | 250,400 | |
| Directors stock option plan | 36,800 | 32,900 | |
| 3,903,900 | 3,779,200 | ||
| Valuation allowance | (3,903,900) | (3,779,200) | |
|
Bad Debts [Member]
|
|||
| Current: | |||
| Bad debts | $ 3,400 | $ 3,400 |
|
Note 16 - Quarterly Data (Unaudited) (Detail) - Summary quarterly data (Unaudited) (USD $)
|
12 Months Ended | ||
|---|---|---|---|
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2010
|
|
| Net Sales | |||
| Net Sales | $ 4,761,289 | $ 5,068,613 | $ 5,259,012 |
| Net Income (Loss) | |||
| Net Income (Loss) | 783,966 | 672,535 | 949,496 |
| Basic | |||
| Basic (in Dollars per share) | $ (0.57) | $ (0.54) | $ (0.76) |
| Diluted | |||
| Diluted (in Dollars per share) | $ (0.57) | $ (0.54) | $ (0.76) |
|
First [Member]
|
|||
| Net Sales | |||
| Net Sales | 1,181,501 | 1,112,643 | 1,636,717 |
| Gross Profit | |||
| Gross Profit | 392,712 | 422,618 | 876,542 |
| Net Income (Loss) | |||
| Net Income (Loss) | (183,140) | (317,982) | 64,709 |
| Basic | |||
| Basic (in Dollars per share) | $ (0.15) | $ (0.25) | $ 0.05 |
| Diluted | |||
| Diluted (in Dollars per share) | $ (0.15) | $ (0.25) | $ 0.05 |
|
Second [Member]
|
|||
| Net Sales | |||
| Net Sales | 1,178,538 | 1,312,896 | 1,394,060 |
| Gross Profit | |||
| Gross Profit | 402,681 | 552,725 | 528,246 |
| Net Income (Loss) | |||
| Net Income (Loss) | (224,781) | (213,681) | (335,542) |
| Basic | |||
| Basic (in Dollars per share) | $ (0.16) | $ (0.17) | $ (0.27) |
| Diluted | |||
| Diluted (in Dollars per share) | $ (0.16) | $ (0.17) | $ (0.27) |
|
Third [Member]
|
|||
| Net Sales | |||
| Net Sales | 1,271,803 | 1,276,544 | 1,390,355 |
| Gross Profit | |||
| Gross Profit | 479,189 | 483,899 | 642,349 |
| Net Income (Loss) | |||
| Net Income (Loss) | (170,975) | (125,949) | (151,479) |
| Basic | |||
| Basic (in Dollars per share) | $ (0.12) | $ (0.10) | $ (0.12) |
| Diluted | |||
| Diluted (in Dollars per share) | $ (0.12) | $ (0.10) | $ (0.12) |
|
Fourth [Member]
|
|||
| Net Sales | |||
| Net Sales | 1,129,447 | 1,366,530 | 837,880 |
| Gross Profit | |||
| Gross Profit | 482,546 | 582,854 | 271,148 |
| Net Income (Loss) | |||
| Net Income (Loss) | $ (205,070) | $ (14,923) | $ (527,184) |
| Basic | |||
| Basic (in Dollars per share) | $ (0.14) | $ (0.02) | $ (0.42) |
| Diluted | |||
| Diluted (in Dollars per share) | $ (0.14) | $ (0.02) | $ (0.42) |
|
Note 7 - Stock Options: (Detail) - Transactions involving the plans are summarized as follows: (USD $)
|
12 Months Ended | ||
|---|---|---|---|
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2010
|
|
|
Employee Plans [Member]
|
|||
| Employee Plans: | |||
| Balance | 26,850 | 41,500 | 59,400 |
| Weighted Average Exercise Price (in Dollars per share) | $ 3.55 | $ 3.41 | $ 3.81 |
| Balance | (26,850) | (14,650) | (17,900) |
| Weighted Average Exercise Price (in Dollars per share) | $ 3.55 | $ 3.15 | $ 4.73 |
| Balance | 26,850 | 41,500 | |
| Weighted Average Exercise Price (in Dollars per share) | $ 3.55 | $ 3.41 | |
| Balance | 26,850 | 41,500 | |
| Weighted Average Exercise Price (in Dollars per share) | $ 3.55 | $ 3.41 | |
|
Director Plans [Member]
|
|||
| Employee Plans: | |||
| Balance | 38,000 | 44,000 | 41,000 |
| Weighted Average Exercise Price (in Dollars per share) | $ 5.95 | $ 6.30 | $ 6.51 |
| Balance | 7,000 | 5,000 | 6,000 |
| Weighted Average Exercise Price (in Dollars per share) | $ 2.925 | $ 2.925 | $ 6.00 |
| Balance | (3,000) | (11,000) | (3,000) |
| Weighted Average Exercise Price (in Dollars per share) | $ 3.55 | $ 5.98 | $ 8.50 |
| Balance | 42,000 | 38,000 | 44,000 |
| Weighted Average Exercise Price (in Dollars per share) | $ 5.62 | $ 5.95 | $ 6.30 |
| Balance | 30,000 | 28,334 | 33,000 |
| Weighted Average Exercise Price (in Dollars per share) | $ 6.52 | $ 6.62 | $ 6.46 |
|
Note 3 - Notes Receivable
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2012
|
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| Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
The
Company has notes receivable with a current and former
employee at an interest rate of three percent per annum.
Selected details of notes receivable are as follows:
|
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