-----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, J34N5m7MPUpjbvLam4EG6/Cre95aIP4hgF28MsrReAY7zM1+ZiFhsuAIxgQ/U9uO 2pUDyN8pyqFhjbMNxTZz5w== /in/edgar/work/20000811/0000716688-00-000004/0000716688-00-000004.txt : 20000921 0000716688-00-000004.hdr.sgml : 20000921 ACCESSION NUMBER: 0000716688-00-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICROWAVE FILTER CO INC /NY/ CENTRAL INDEX KEY: 0000716688 STANDARD INDUSTRIAL CLASSIFICATION: [3679 ] IRS NUMBER: 160928443 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-10976 FILM NUMBER: 693602 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 0001.txt 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 June 30, 2000 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 - 3,164,186 shares as of June 30, 2000. PART I. - FINANCIAL INFORMATION MICROWAVE FILTER COMPANY, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in thousands) JUNE 30, 2000 SEPTEMBER 30, 1999 [S] [C] [C] Assets Current Assets: Cash and cash equivalents $ 592 $ 264 Investments 900 775 Accounts receivable-trade,net 710 697 Inventories 1,084 1,192 Deferred tax asset - current 163 163 Prepaid expenses and other current assets 86 66 -------- -------- Total current assets 3,535 3,157 Property,plant and equipment,net 1,377 1,548 -------- -------- Total assets $ 4,912 $ 4,705 ======== ======== Liabilities And Stockholders' Equity Current liabilities: Accounts payable $ 304 $ 215 Customer deposits 149 271 Accrued federal and state income taxes 199 76 Accrued payroll and related expenses 102 70 Accrued compensated absences 283 241 Other current liabilities 103 71 -------- -------- Total current liabilities 1,140 944 Deferred tax liability - noncurrent 6 6 Deferred compensation and other liabilities 0 5 -------- -------- Total liabilities 1,146 955 -------- -------- Stockholders' Equity: Common stock,$.10 par value 432 432 Additional paid-in capital 3,240 3,240 Retained earnings 1,218 1,142 -------- -------- 4,890 4,814 Common stock in treasury, at cost (1,124) (1,064) -------- -------- Total stockholders' equity 3,766 3,750 -------- -------- Total liabilities and stockholders' equity $ 4,912 $ 4,705 ======== ======== [FN] See Accompanying Notes to Consolidated Financial Statements MICROWAVE FILTER COMPANY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED JUNE 30, 2000 AND 1999 (Unaudited) (Amounts in thousands, except per share data) Three months ended Nine months ended June 30 June 30 2000 1999 2000 1999 [S] [C] [C] [C] [C] Net sales $2,242 $1,645 $5,711 $5,037 Cost of goods sold 1,499 982 3,708 3,061 ------- ------- ------- ------- Gross profit 743 663 2,003 1,976 Selling, general and administrative expenses 611 618 1,716 1,852 ------- ------- ------- ------- Income from operations 132 45 287 124 Other income (expense), net 29 9 70 36 ------- ------- ------- ------- Income before income taxes 161 54 357 160 Provision for income taxes 56 19 123 55 ------- ------- ------- ------- NET INCOME $105 $ 35 $234 $105 ======= ======= ======= ======= Earnings per share $0.03 $0.01 $0.07 $0.03 ======= ======= ======= ======= [FN] See Accompanying Notes to Consolidated Financial Statements MICROWAVE FILTER COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS AND NINE MONTHS ENDED JUNE 30, 2000 AND 1999 (Unaudited) (Amounts in thousands) Three months ended Nine months ended June 30 June 30 2000 1999 2000 1999 [S] [C] [C] [C] [C] Cash flows from operating activities: Net income $ 105 $ 35 $ 234 $ 105 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 77 78 230 227 Stock Compensation 0 7 0 13 Change in assets and liabilities: (Increase) decrease in: Accounts receivable (5) 279 (13) 125 Inventories 180 0 108 19 Prepaid expenses & other assets 38 144 (20) 119 Increase (decrease) in: Accounts payable & accrued expenses (197) (126) 196 (132) Deferred compensation & other liabilities (2) (2) (5) (5) ------- ------- -------- ------- Net cash provided by operating activities 196 415 730 471 ------- ------- -------- ------- Cash flows from investing activities: Investments (900) 0 (125) 0 Capital expenditures (16) (45) (59) (108) ------- ------- ------- ------- Net cash used in Investing activities (916) (45) (184) (108) Cash flows from financing activities: Principal payments on long-term debt 0 (15) 0 (45) Purchase of treasury stock 0 (7) (60) (270) Cash dividend paid 0 0 (158) (165) ------- ------- ------- ------- Net cash used in financing activities 0 (22) (218) (480) Increase (decrease) in cash and cash equivalents (720) 348 328 (117) Cash and cash equivalents at beginning of period 1,312 756 264 1,221 ------- ------- ------- ------- Cash and cash equivalents at end of period $592 $1,104 $592 $1,104 ======= ======= ======= ======= [FN] See Accompanying Notes to Consolidated Financial Statements MICROWAVE FILTER COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 Note 1. Summary of Significant Accounting Policies The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine-month period ended June 30, 2000 are not necessarily indicative of the results that may be expected for the year ended September 30, 2000. Note 2. Industry Segment Data The Company's primary business segments involve (1) operations of Microwave Filter Company, Inc. (MFC) which manufactures filters used for preventing interference or signal processing in cable television, satellite, broadcast, aerospace and government markets; and (2) operations of Niagara Scientific, Inc. (NSI) which manufactures industrial automation equipment. Information by segment is as follows: Three months ended Nine months ended (thousands of dollars) June 30 June 30 2000 1999 2000 1999 Net Sales (Unaffiliated): MFC $1,626 $1,567 $4,611 $4,649 NSI 616 78 1,100 388 ------ ------ ------ ------ Total $2,242 $1,645 $5,711 $5,037 ====== ====== ====== ====== Operating profit (loss): (a) MFC $149 $64 $333 $262 NSI (17) (19) (46) (138) ------ ------ ------ ------ Total $132 $45 $287 $124 ====== ====== ======= ======= Identifiable assets: (b) MFC $3,742 $3,140 $3,742 $3,140 NSI 578 317 578 317 ------ ------ ------ ------ Subtotal 4,320 3,457 4,320 3,457 Corporate Assets - Cash And Cash Equivalents 592 1,104 592 1,104 ------ ------ ------ ------ Total $4,912 $4,561 $4,912 $4,561 ====== ====== ====== ====== (a) Operating profit (loss) is total revenue less operating expenses. In computing operating profit, none of the following items have been added or deducted: interest expense, income taxes and miscellaneous income. Expenses incurred on behalf of both Companies are allocated based upon estimates of their relationship to each entity. (b) Identifiable assets by industry are those assets that are used in the Companies operations in each industry. MICROWAVE FILTER COMPANY, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS JUNE 30, 2000 Net sales for the nine months ended June 30, 2000 equaled $5,710,952, an increase of $674,098 or 13.4% when compared to net sales of $5,036,854 for the nine months ended June 30, 1999. Net sales for the three months ended June 30, 2000 equaled $2,242,375, an increase of $597,153 or 36.3% when compared to net sales of $1,645,222 for the three months ended June 30, 1999. The increases in net sales are primarily due to the increases in sales of Niagara Scientific, Inc., a wholly owned subsidiary. Niagara Scientific, Inc. (NSI) sales for the nine months ended June 30, 2000 equaled $1,100,125, an increase of $712,156 or 184% when compared to net sales of $387,969 for the nine months ended June 30, 1999. NSI sales for the three months ended June 30, 2000 equaled $616,283, an increase of $538,554 or 693% when compared to net sales of $77,729 for the three months ended June 30, 1999. Microwave Filter Company, Inc. (MFC) sales for the nine months ended June 30, 2000 equaled $4,610,827, a decrease of $38,058 or 0.8% when compared to net sales of $4,648,885 for the nine months ended June 30, 1999. MFC sales for the three months ended June 30, 2000 equaled $1,626,092 for the three months ended June 30, 2000, an increase of $58,599 or 3.7% when compared to net sales of $1,567,493 for the three months ended June 30, 1999. The Company continues to invest in production engineering and infrastructure development to penetrate OEM (Original Equipment Manufacturer) market segments as they become popular. MFC is intentionally de-emphasizing custom product sales in order to concentrate its' technical resources and product development efforts toward potential high volume customers. This is part of a concentrated effort to provide substantial long-term growth. The Company's total backlog of orders decreased $188,469 to $929,387 at June 30, 2000 when compared to $1,117,856 at September 30, 1999. MFC's backlog of orders increased $56,899 to $577,475 at June 30, 2000 when compared to $520,576 at September 30, 1999. NSI's backlog of orders decreased $245,368 to $351,912 at June 30, 2000 when compared to $597,280 at September 30, 1999. Approximately 80% of the total Company backlog is scheduled to ship by September 30, 2000. Gross profit for the nine months ended June 30, 2000 equaled $2,002,956, an increase of $26,885 or 1.4% when compared to gross profit of $1,976,071 for the nine months ended June 30, 1999. Gross profit for the three months ended June 30, 2000 equaled $742,527 an increase of $79,868 or 12.1% when compared to gross profit of $662,659 for the three months ended June 30, 1999. As a percentage of sales, gross profit equaled 35.1% for the nine months ended June 30, 2000 compared to gross profit of 39.2% for the nine months ended June 30, 1999. As a percentage of sales, gross profit equaled 33.1% for the three months ended June 30, 2000 compared to gross profit of 40.3% for the three months ended June 30, 1999. The decreases in gross profit as a percentage of sales, when compared to the same periods last year, can primarily be attributed to product sales mix. NSI's sales, whose targeted gross profits are lower than MFC's, equaled 19.3% of total sales for the nine months ended June 30, 2000 and 27.5% of total sales for the three months ended June 30, 2000 when compared to 7.7% of total sales for the nine months ended June 30, 1999 and 4.7% of total sales for the three months ended June 30, 1999. Selling, general and administrative (SG&A) expenses for the nine months ended June 30, 2000 equaled $1,716,124, a decrease of $135,532 or 7.3% when compared to SG&A expenses of $1,851,656 for the nine months ended June 30, 1999. SG&A expenses for the three months ended June 30, 2000 equaled $610,906, a decrease of $7,305 or 1.2.% when compared to SG&A expenses of $618,211 for the three months ended June 30, 1999. The decreases can primarily be attributed to planned decreases in media advertising, trade show expenses and consulting fees when compared to the same periods last year. As a percentage of sales, SGA expenses equaled 30% of sales for the nine months ended June 30, 2000 and 27.2% of sales for the three months ended June 30, 2000 compared to 36.8% of sales for the nine months ended June 30, 1999 and 37.6% of sales for the three months ended June 30, 1999. Income from operations for the nine months ended June 30, 2000 equaled $286,832, an increase of $162,417 when compared to income from operations of $124,415 for the nine months ended June 30, 1999. On an industry segment basis, MFC reported income from operations of $333,019 for the nine months ended June 30, 2000 compared to $261,919 for the nine months ended June 30, 1999 and NSI reported an operating loss of $46,187 for the nine months ended June 30, 2000 compared to an operating loss of $137,504 for the nine months ended June 30, 1999. MFC's improvement can primarily be attributed to lower SGA expenses and NSI's improvement can primarily be attributed to higher sales volume and lower SGA expenses, when compared to the same periods last year. Cash and cash equivalents increased $328,088 to $592,235 at June 30, 2000 when compared to $264,147 at September 30, 1999. The increase was a result of $731,438 in net cash provided by operating activities, $184,700 in net cash used in investing activities and $218,650 in net cash used in financing activities. Cash used in investing activities during the nine months ended June 30, 2000 consisted of funds used to purchase short-term investments and funds used for capital expenditures. Cash used in financing activities during the nine months ended June 30, 2000 consisted of funds used to pay a cash dividend and funds used to repurchase common stock of the Company. The Company's Board of Directors had authorized the repurchase of up to 500,000 shares of the Company's outstanding common stock. On January 26, 2000 the Company's Board of Directors authorized the repurchase of an additional 500,000 shares of the Company's outstanding common stock. The repurchases will be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. Since July 1988, 423,246 shares of the Company's outstanding common stock have been repurchased using existing cash balances. Management believes the common stock repurchase program, given the Company's present cash position, reflects its belief in the fundamental strength of the business and also its commitment to enhancing shareholder value. At June 30, 2000, 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. Management believes that its working capital requirements for the foreseeable future will be met by its existing cash balances, future cash flows from operations and its current credit arrangements. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Any statements contained in this report which are not historical facts are forward looking statements; and, therefore, many important factors could cause actual results to differ materially from those in the forward looking statements. Such factors include, but are not limited to, changes (legislative, regulatory and otherwise) in the MMDS, LPTV or Cable industry, demand for the Company's products (both domestically and internationally), the development of competitive products, competitive pricing, market acceptance of new product introductions, technological changes, general economic conditions, litigation and other factors, risks and uncertainties which may be identified in the Company's Securities and Exchange Commission filings. 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 None during this reporting period. 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. August 11, 2000 Carl F. Fahrenkrug (Date) -------------------------- Carl F. Fahrenkrug Chief Executive Officer August 11, 2000 Richard L. Jones (Date) -------------------------- Richard L. Jones Chief Financial Officer EX-27 2 0002.txt ARTICLE 5 FIN. DATA SCHEDULE FOR 3RD QTR 10-Q
5 1,000 9-MOS SEP-30-2000 OCT-01-1999 JUN-30-2000 592 0 756 46 1,084 3,535 6,085 4,708 4,912 1,141 0 432 0 0 3,334 4,912 5,711 5,711 3,708 5,424 0 0 1 357 123 234 0 0 0 234 .07 .07
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