-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GYWbf4d7J8H5pLt7aOxrMVv/iLpQYVZJiXLXB+ITObYEAeqGulemixEcpig0C9xj bOFi5FDT3n1t4Phj9wNJng== 0000716688-97-000005.txt : 19970520 0000716688-97-000005.hdr.sgml : 19970520 ACCESSION NUMBER: 0000716688-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICROWAVE FILTER CO INC /NY/ CENTRAL INDEX KEY: 0000716688 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 160928443 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10976 FILM NUMBER: 97606383 BUSINESS ADDRESS: STREET 1: 6743 KINNE ST CITY: E SYRACUSE STATE: NY ZIP: 13057 BUSINESS PHONE: 3154373953 MAIL ADDRESS: STREET 1: 6743 KINNE ST CITY: EAST SYRACUSE STATE: NY ZIP: 13057 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended March 31, 1997 Commission file number 0-10976 MICROWAVE FILTER COMPANY, INC. (Exact name of registrant as specified in its charter.) New York 16-0928443 (State of Incorporation) (I.R.S. Employer Identification Number) 6743 Kinne Street, East Syracuse, N.Y. 13057 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (315) 438-4700 Indicate by check mark whether 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 shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ( x ) NO ( ) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: Common Stock, $.10 Par Value - 3,560,491 shares as of March 31, 1997. PART I. - FINANCIAL INFORMATION MICROWAVE FILTER COMPANY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED MARCH 31, 1997 AND 1996 (Unaudited) (Amounts in thousands, except per share data) Three months ended Six months ended March 31 March 31 1997 1996 1997 1996 [S] [C] [C] [C] [C] Net sales $1,207 $1,861 $2,929 $3,952 Cost of goods sold 730 1,167 1,825 2,420 ------- ------- ------- ------- Gross profit 477 694 1,104 1,532 Selling, general and administrative expenses 554 625 1,141 1,271 ------- ------- ------- ------- Income (loss) from operations (77) 69 (37) 261 Other income (expense) 26 3 43 4 ------- ------- ------- ------- Income (loss) before income taxes (51) 72 6 265 Provision (benefit) for income taxes (18) 25 2 91 ------- ------- ------- ------- NET INCOME (LOSS) ($34) $47 $4 $174 ======= ======= ======= ======= Earnings (loss) per share ($0.01) $0.01 $0.00 $0.05 ======= ======= ======= ======= [FN] See Accompanying Notes to Consolidated Financial Statements MICROWAVE FILTER COMPANY, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in thousands) MARCH 31, 1997 SEPTEMBER 30, 1996 [S] [C] [C] Assets Current Assets: Cash and cash equivalents $ 956 $ 1,281 Accounts receivable-trade,net 406 724 Federal and state income tax receivable 12 - Inventories 1,342 1,499 Prepaid expenses and other current assets 395 323 -------- -------- Total current assets 3,111 3,827 Property,plant and equipment,net 1,615 1,583 -------- -------- Total assets $ 4,726 $ 5,410 ======== ======== Liabilities And Stockholders' Equity Current liabilities: Current portion of long term debt $ 54 $ 53 Accounts payable 245 300 Customer deposits 124 199 Accrued federal and state income taxes - 289 Accrued payroll and related expenses 103 127 Accrued compensated absences 173 198 Other current liabilities 54 81 -------- -------- Total current liabilities 752 1,247 Long term debt, less current portion 75 103 Deferred compensation and other liabilities 79 82 -------- -------- Total liabilities 907 1,432 -------- -------- Stockholders' Equity: Common stock,$.10 par value 428 426 Additional paid-in capital 3,206 3,193 Retained earnings 823 997 -------- -------- 4,457 4,616 Common stock in treasury, at cost (638) (638) -------- -------- Total stockholders' equity 3,819 3,978 -------- -------- Total liabilities and stockholders' equity $ 4,726 $ 5,410 ======== ======== [FN] See Accompanying Notes to Consolidated Financial Statements MICROWAVE FILTER COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS AND SIX MONTHS ENDED MARCH 31, 1997 AND 1996 (Unaudited) (Amounts in thousands) Three months ended Six months ended March 31 March 31 1997 1996 1997 1996 [S] [C] [C] [C] [C] Cash flows from operating activities: Net income $ (34) $ 47 $ 4 $ 174 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 77 82 156 166 Stock Compensation 7 42 15 46 Change in assets and liabilities: (Increase) decrease in: Accounts receivable 201 65 306 174 Inventories (41) 295 157 423 Prepaid expenses & other assets (48) (58) (72) (61) Increase (decrease) in: Accounts payable & accrued expenses (82) (183) (496) (133) Deferred compensation & other liabilities (6) (1) (3) (2) ------- ------- -------- ------- Net cash provided by operating activities 74 290 67 788 ------- ------- -------- ------- Cash flows from investing activities: Capital expenditures (116) (31) (188) (52) Cash flows from financing activities: Principal payments on long-term debt (13) (37) (27) (72) Purchase of treasury stock (1) (1) Cash dividend paid (178) (168) (178) (168) ------- ------- ------- ------- Net cash used in financing activities (191) (205) (204) (241) Increase (decrease) in cash and cash equivalents (233) 53 (325) 494 Cash and cash equivalents at beginning of period 1,187 962 1,281 521 ------- ------- ------- ------- Cash and cash equivalents at end of period $ 956 $1,015 $ 956 $1,015 ======= ======= ======= ======= [FN] See Accompanying Notes to Consolidated Financial Statements MICROWAVE FILTER COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1997 Note 1. Summary of Significant Accounting Policies The accompanying financial statements, which should be read in conjunction with the financial statements of Microwave Filter Company, Inc. ("the Company") included in the 1996 Annual Report filed on Form 10-K, are unaudited but have been prepared in the ordinary course of business for the purpose of providing information with respect to the interim period. The Company believes that all adjustments (none of which were other than normal recurring accruals) necessary for a fair presentation for such periods have been included. Note 2. Earnings (loss) per share Earnings (loss) per common share are calculated based upon the weighted average number of shares of common stock outstanding during the periods including, when significant, any common stock equivalents and after restatement of any stock dividends. The weighted average number of shares of common stock outstanding used for the computations were 3,551,394 for the six months and 3,555,390 for the three months ending March 31, 1997 and 3,512,398 for the six months and 3,532,489 for the three months ending March 31, 1996. Note 3. Inventories Inventories are stated at the lower of cost determined on the first-in, first-out method or market. Inventories consisted of the following: March 31, September 30, 1997 1996 Raw materials and stock parts $ 859 $ 958 Work-in-process 268 299 Finished goods 215 242 ------- ------- $ 1,342 $ 1,499 ======= ======= MICROWAVE FILTER COMPANY, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS MARCH 31, 1997 Net sales for the six months ended March 31, 1997 equaled $2,929,453, a decrease of 25.9% when compared to net sales of $3,952,503 for the six month period ended March 31, 1996. Net sales for the three months ended March 31, 1997 equaled $1,207,031, a decrease of 35.2% when compared to net sales of $1,861,488 for the three month period ended March 31, 1996. The Company's two largest market segments, Cable Television and Wireless Cable, continue to experience a decrease in the demand for hardware; primarily due to competition from Direct Broadcast Satellite and the lack of readily available competitively priced digital compression technology in the Wireless Cable and Wireline Cable marketplace. It is anticipated that it will take at least 12 months for digital technology to make sufficient progress in the Wireless and Wireline Cable venue to shift the advantage away from Direct Broadcast Satellite. During this hiatus, the Company's primary objective will continue to be the development of new products and the development of new market segments, such as LMDS and PCS. Gross profit for the six months ended March 31, 1997 equaled $1,103,837 or 37.7% of sales compared to $1,532,306 or 38.8% of sales for the six month period ended March 31, 1996. Gross profit for the three months ended March 31, 1997 equaled $477,100 or 39.5% of sales compared to $694,466 or 37.3% of sales for the three month period ended March 31, 1996. The decreases in gross profit are primarily due to the decreases in sales. The increase in gross profit as a percentage of sales during the quarter ended March 31, 1997, when compared to the same period last year, can be attributed to product sales mix, improvements in productivity and planned reductions in manufacturing costs. Selling, general and administrative (SG&A) expenses for the six months ended March 31, 1997 equaled $1,140,634, a decrease of $130,622 or 10.3% when compared to SG&A expenses of $1,271,256 during the six month period ended March 31, 1996. SG&A expenses for the three months ended March 31, 1997 equaled $554,379, a decrease of $71,076 or 11.4% when compared to SG&A expenses of $625,455 during the three month period ended March 31, 1996. The decreases can primarily be attributed to reductions in payroll and payroll related expenses, sales commissions and legal costs when compared to the same periods last year. Other income for the six months ended March 31, 1997 totaled $42,472, an increase of $38,547 when compared to the six month period ended March 31, 1996. The increase is primarily due to an increase in interest income and a decrease in interest expense when compared to the six month period ended March 31, 1996. Cash and cash equivalents decreased $325,267 to $955,732 at March 31, 1997 when compared to $1,280,999 at September 30, 1996. The decrease was a result of $66,799 in net cash provided by operating activities, $187,906 in net cash used for capital expenditures and $204,160 in net cash used in financing activities. At March 31, 1997, the Company had aggregate lines of credit totaling $600,000. Of these lines, $100,000 is for the purchase of equipment and is collateralized by equipment and $500,000 is for working capital and is collateralized by accounts receivable, inventories and equipment. In addition, the Company has a letter of credit facility, for up to $500,000, which is collateralized by specific inventory to be purchased. Management believes that its working capital requirements for the forseeable future will be met by its existing cash balances, future cash flows from operations and its current credit arrangements. PART II - OTHER INFORMATION Item 1. Legal Proceedings The Company is unaware of any material threatened or pending litigation against the Company. Item 2. Changes in Securities None during this reporting period. Item 3. Defaults Upon Senior Securities The Company has no senior securities. Item 4. Submission of Matters to a Vote of Security Holders a. The Annual meeting of the Shareholders was held on April 10, 1997 at the Holiday Inn, Carrier Circle, East Syracuse, New York 13057 at 10:00 A.M. pursuant to notice to the shareholders. The following matters were submitted to the vote of shareholders: Proposal 1. The election of three directors to hold office until the Annual Meeting of the Shareholders at which their term expires or until their successors have been duly elected. Proposal 2. The ratification of Coopers & Lybrand L.L.P. as the Company's independent auditors for the fiscal year ending September 30, 1997. b. The following named persons received the number of votes set opposite their respective names for election to the Board of Directors: DIRECTORS VOTES FOR AUTHORITY WITHHELD Trudi Artini 2,745,813 116,337 Milo Peterson 2,741,737 100,413 David Robinson 2,723,332 118,818 c. The following proposition received the number of votes set opposite its respective number: VOTES FOR VOTES AGAINST ABSTENTIONS Proposal 2 2,760,473 71,329 10,348 Item 6. Exhibits and Reports on Form 8-K None. Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MICROWAVE FILTER COMPANY, INC. May 13, 1997 Carl F. Fahrenkrug (Date) -------------------------- Carl F. Fahrenkrug Chief Executive Officer May 13, 1997 Richard L. Jones (Date) -------------------------- Richard L. Jones Chief Financial Officer EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 2ND QTR 10-Q
5 1,000 6-MOS SEP-30-1997 OCT-01-1996 MAR-31-1997 956 0 406 0 1,342 3,111 5,354 3,739 4,726 752 75 428 0 0 3,392 4,726 2,929 2,929 1,825 2,966 0 0 5 6 2 4 0 0 0 4 .00 .00
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