-----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, Mip0fjehWKLBMng5p8BWTbY0gKGglwVVwX24zB3FTmxYRJMnRi8BHXdBWdJAtTZt 8dOXEhrWY9jLEfD5J2mSSg== 0000950109-96-000131.txt : 19960111 0000950109-96-000131.hdr.sgml : 19960111 ACCESSION NUMBER: 0000950109-96-000131 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951130 FILED AS OF DATE: 19960109 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL ELECTRONICS INC CENTRAL INDEX KEY: 0000717751 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 042654231 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16305 FILM NUMBER: 96502101 BUSINESS ADDRESS: STREET 1: 427 TURNPIKE ST CITY: STOUGHTON STATE: MA ZIP: 02072 BUSINESS PHONE: 6178215566 MAIL ADDRESS: STREET 1: 427 TURNPIKE STREET CITY: STOUGHTON STATE: MA ZIP: 02072 10QSB 1 FORM 10-QSB U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For Quarter Ended November 30, 1995 ----------------------------------------------- Commission File Number 2-91218-B ------------------------------------------- International Electronics, Inc. - -------------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Massachusetts 04-2654231 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 427 Turnpike Street, Canton, Massachusetts 02021 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (617) 821-5566 - -------------------------------------------------------------------------------- (Issuer's telephone number, including area code) Not applicable - -------------------------------------------------------------------------------- (former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act 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 ----- ----- 1,407,669 common shares were outstanding at January 5, 1996. INTERNATIONAL ELECTRONICS, INC. ------------------------------- Index -----
Part I. Financial Information: Page No. -------- Item 1: Financial Statements (unaudited) -------------------------------- Condensed Consolidated Balance Sheets, November 30, 1995 and August 31, 1995 2 Condensed Consolidated Statements of Operations, three months ended November 30, 1995 and 1994 3 Condensed Consolidated Statement of Shareholders' Equity, three months ended November 30, 1995 4 Condensed Consolidated Statements of Cash Flows, three months ended November 30, 1995 and 1994 5 Notes to Condensed Consolidated Financial Statements 6-8 Item 2: Management's Discussion and Analysis of --------------------------------------- Financial Condition and Results of Operations 9-10 --------------------------------------------- Part II. Other Information: Item 6: Exhibits and Reports on Form 8-K 11 -------------------------------- Signatures 11 ----------
-1- INTERNATIONAL ELECTRONICS, INC. ------------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (unaudited)
Nov. 30, 1995 August 31, 1995 -------------- --------------- ASSETS - ------ Current assets: Cash and equivalents $ 350,695 $ 327,812 Accounts receivable, net 912,740 836,705 Inventories 664,696 623,913 Other current assets 86,534 104,451 ----------- ----------- Total current assets 2,014,665 1,892,881 Equipment, furniture and improvements, net 264,854 280,326 Other assets: Goodwill and other intangibles, net 393,026 415,597 Other 16,985 17,285 ----------- ----------- 410,011 432,882 ----------- ----------- $ 2,689,530 $ 2,606,089 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities: Accounts payable $ 657,379 $ 651,176 Accrued expenses 492,184 431,389 State income taxes 5,000 - Current portion of long-term obligations 66,190 69,095 ----------- ----------- Total current liabilities 1,220,753 1,151,660 Long-term obligations 436,764 452,685 Commitments Shareholders' equity: Common stock, $.01 par value: Authorized 5,984,375 shares Issued 1,442,669 shares 14,427 14,427 Capital in excess of par value 4,668,050 4,668,050 Accumulated deficit (3,611,820) (3,642,089) Less treasury stock, at cost: 35,000 shares (38,644) (38,644) ----------- ----------- Total shareholders' equity 1,032,013 1,001,744 ----------- ----------- $ 2,689,530 $ 2,606,089 =========== ===========
See notes to unaudited condensed consolidated financial statements. -2- INTERNATIONAL ELECTRONICS, INC. ------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ----------------------------------------------- (unaudited)
Three months ended ------------------------------- Nov. 30, 1995 Nov. 30, 1994 ------------- ------------- Net sales $1,945,323 $1,595,281 Cost of sales 1,133,372 929,474 ---------- ---------- Gross profit 811,951 665,807 Research and development costs 72,765 71,719 Selling, general and administrative expenses 694,839 592,842 ---------- ---------- Income from operations 44,347 1,246 Interest expense (14,026) (13,810) Other income 4,948 25,521 ---------- ---------- Income before taxes 35,269 12,957 Provision for taxes 5,000 1,000 ---------- ---------- Net income $ 30,269 $ 11,957 ========== ========== Net income per common share $.02 $.01 ========== ========== Weighted average number of common shares outstanding 1,407,669 1,423,669 ========== ==========
See notes to unaudited condensed consolidated financial statements. -3- INTERNATIONAL ELECTRONICS, INC. ------------------------------- CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY -------------------------------------------------------- (unaudited)
Common Stock Capital in Treasury Stock ------------------ excess of Accumulated ---------------------------- Shares Amount par value Deficit Shares Cost Total --------- ------- ---------- ------------ ----------- --------------- ---------- Balances, September 1, 1995 1,442,669 $14,427 $4,668,050 ($3,642,089) 35,000 ($38,644) $1,001,744 Net income - - - 30,269 - - 30,269 Balances, --------- ------- ---------- ----------- ----------- -------------- ---------- November 30, 1995 1,442,669 $14,427 $4,668,050 ($3,611,820) 35,000 ($38,644) $1,032,013 ========= ======= ========== =========== =========== ============== ==========
See notes to unaudited condensed consolidated financial statements. -4- INTERNATIONAL ELECTRONICS, INC. ------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- (unaudited)
Three months ended ------------------------------- Nov. 30, 1995 Nov. 30, 1994 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 30,269 $ 11,957 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 54,874 67,367 Changes in operating assets and liabilities: Accounts receivable (76,035) (140,249) Inventories (40,783) 22,139 Other current assets 17,917 22,493 State income taxes 5,000 1,000 Accounts payable and accrued expenses 66,998 183,239 -------- --------- Net cash provided by operating activities 58,240 167,946 CASH FLOWS FROM INVESTING ACTIVITIES AND OTHER: Net purchase of equipment, furniture and improvements (16,831) (7,774) Goodwill and other intangibles and other assets 300 (2,681) -------- --------- Net cash used in investing activities and other (16,531) (10,455) CASH FLOWS FROM FINANCING ACTIVITIES: Reduction of notes payable and debt obligations (18,826) (63,729) -------- --------- Net cash used in financing activities (18,826) (63,729) -------- --------- CASH AND EQUIVALENTS: Net increase during period 22,883 93,762 Balances, beginning of period 327,812 498,663 -------- --------- Balances, end of period $350,695 $ 592,425 ======== ========= SUPPLEMENTAL SCHEDULE OF NONCASH TRANSACTIONS: Equipment acquired under capitalized leases $ - $ 37,258
See notes to unaudited condensed consolidated financial statements. -5- INTERNATIONAL ELECTRONICS, INC. ------------------------------- NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- (unaudited) A. Financial Statements: --------------------- In the opinion of the Company, the unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of November 30, 1995 and the results of operations for the three months then ended. Certain disclosures normally included have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-KSB for the year ended August 31, 1995. B. Net Income per Share: --------------------- Net income per share is based on the weighted average common shares outstanding during the periods. Net income per common share assuming full dilution have not been presented because the dilutive effect is not material. C. Principles of Consolidation: ---------------------------- The accompanying condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary, Ecco Industries, Inc. All material intercompany transactions, balances and profits have been eliminated. D. Income Taxes: ------------- The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year. Cumulative adjustments to the tax provision are recorded in the interim period in which a change in the estimated annual effective rate is determined. -6- INTERNATIONAL ELECTRONICS, INC. ------------------------------- NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- (continued) (unaudited) E. Long-term Obligations: ---------------------- Long-term obligations are summarized as follows:
Nov. 30, 1995 Aug. 31, 1995 ------------- ------------- Federal Deposit Insurance Corporation Agreement $400,917 $406,192 9-15% capitalized lease obligations, due through December, 1998 (Note F) 69,449 80,740 Other 14,000 14,000 7-15% equipment loans, collateralized by equipment, final payment due July, 1998 18,588 20,848 -------- -------- 502,954 521,780 Less current portion (66,190) (69,095) -------- -------- $436,764 $452,685 ======== ========
Federal Deposit Insurance Corporation (FDIC) Agreement - In May 1991, the ------------------------------------------------------ Company's bank, Boston Trade Bank, was declared insolvent and the FDIC became the holder of the Company's debt to the bank. In December 1994, the Company renegotiated this debt with the FDIC. The agreement provided for repayment of $35,000 prior to October 8, 1994, with payments on the remaining balance of $430,000 utilizing a 20-year amortization with payment in full after 3 years. The debt is collateralized by all of the Company's assets with interest at the prime rate plus 1% and has been personally guaranteed by an officer of the Company. The aggregate principal payments on long-term obligations, excluding capital leases are $29,969 (1996), $40,683 (1997) and $362,853 (1998). -7- INTERNATIONAL ELECTRONICS, INC. ------------------------------- NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- (continued) (unaudited) F. Capital Lease Commitments: -------------------------- The Company leases certain equipment under capital leases and, accordingly, the present value of the net minimum payments has been reflected in equipment, furniture and improvements and capitalized lease obligations. Future minimum capital lease payments under lease terms in excess of one year at November 30, 1995 are as follows: 1996 $ 44,208 1997 30,963 1998 4,593 1999 382 -------- Total minimum lease payments 80,146 Less interest (10,697) -------- Net minimum lease payments 69,449 Less current portion (36,221) -------- Long-term portion $ 33,228 ========
G. Capital Transactions: --------------------- On September 7, 1995, the Company approved and reserved 70,000 shares of common stock for an additional non-qualified stock option plan. -8- Management's Discussion and Analysis of --------------------------------------- Financial Condition and Results of Operations --------------------------------------------- Liquidity and Capital Resources - ------------------------------- As of November 30, 1995, the Company had working capital of $793,912 compared to $741,221 at August 31, 1995. The ratio of current assets to current liabilities was 1.7 at November 30, 1995 as compared to 1.6 at August 31, 1995. The debt to equity ratio was 1.6 at both November 30, 1995 and August 31, 1995. The increase in working capital and current ratio is primarily the result of the Company's operating cash flow for the first quarter of fiscal 1996. Net capital expenditures were $16,831 and $45,032 for the three months ended November 30, 1995 and 1994, respectively. The Company has no current commitments for any material capital expenditures, but the Company anticipates up to $260,000 in capital expenditures for the purchase of office and manufacturing equipment, regulatory testing and tooling costs over the next twelve months. As of November 30, 1995, the Company had indebtedness of approximately $401,000 under an agreement with the Federal Deposit Insurance Corporation ("FDIC"). See Note E to Unaudited Condensed Consolidated Financial Statements. In May, 1991, the Commissioner of Banks of the Commonwealth of Massachusetts declared the Company's bank insolvent, and appointed the FDIC as liquidating agent of the bank. In December, 1994, the Company renegotiated this debt with the FDIC. The revised agreement provided for repayments of the then current balance utilizing a 20-year amortization with payment in full at December 31, 1997, and interest at the prime rate plus 1%. Management believes that its current cash position, together with internally generated funds at present sales levels, will provide adequate cash reserves, to satisfy its cash requirements for the next twelve months. Depending upon whether or not sufficient revenue and working capital is generated from profitable operations, the Company may require external funding. There is no assurance that profits will be generated, or that external funding will be obtainable, if such a need should arise. -9- Management's Discussion and Analysis ------------------------------------ of Financial Condition and Results of Operations ------------------------------------------------ (continued) Results of Operations - --------------------- Net sales for the first quarter of fiscal 1996 increased 22% as compared to the first quarter of fiscal 1995. The increase in sales for the first quarter of fiscal 1996 primarily reflects increases in access control and keypad and voice verification product sales, offset in part by a reduction in glassbreak detector sales. The Company continues to have a dependence on large volume sales to large customers and therefore remains subject to quarterly fluctuations primarily as a result of an uneven flow of orders from its current customer base. The ratio of gross profit to sales for the three months ended November 30, 1995 and 1994 were both 42%. Research and development costs for the first quarter of fiscal 1996 is comparable to the same period of the preceding year. As a percentage of net sales, selling, general and administrative expenses were 36% and 37% for the three months ended November 30, 1995 and 1994, respectively. The increase in such expenses in absolute dollars primarily relates to additions in the Company's work force and related expenses, salary increases and promotion expenses. The decrease in other income in the first quarter of fiscal 1996 as compared to the first quarter of fiscal 1995, primarily relates to a reduction in commission revenue and a renegotiation of the Company's bank debt with the FDIC in December, 1994. The provision for taxes represents state income tax expense due by the Company after utilization of available net operating loss carryforwards. -10- Part II. Other Information - --------------------------- Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits: (1) No. 27 - Financial Data Schedule (b) There were no reports on Form 8-K filed for the three months ended November 30, 1995. SIGNATURES ---------- Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned, who is duly authorized to sign and is Chief Financial and Accounting Officer. International Electronics, Inc. Date: 1/9/96 /s/ John Waldstein ------- -------------------- John Waldstein, President, Treasurer & Chief Financial and Accounting Officer and duly authorized to sign. -11- EX-27 2 ARTICLE 5 FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF FINANCIAL CONDITION AT NOVEMBER 30, 1995 (UNAUDITED) AND THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 1995 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS AUG-31-1996 SEP-01-1995 NOV-30-1995 350,695 0 0 0 664,696 2,014,665 0 0 2,689,530 1,220,753 436,764 14,427 0 0 1,017,586 2,689,530 1,945,323 1,950,271 1,133,372 1,133,372 72,765 0 14,026 35,269 5,000 30,269 0 0 0 30,269 .02 .02
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