0000930413-11-005395.txt : 20110815 0000930413-11-005395.hdr.sgml : 20110815 20110815080620 ACCESSION NUMBER: 0000930413-11-005395 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20110630 FILED AS OF DATE: 20110815 DATE AS OF CHANGE: 20110815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WIRELESS TELECOM GROUP INC CENTRAL INDEX KEY: 0000878828 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 222582295 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11916 FILM NUMBER: 111033206 BUSINESS ADDRESS: STREET 1: EAST 64 MIDLAND AVE CITY: PARAMUS STATE: NJ ZIP: 07652 BUSINESS PHONE: 2012618797 MAIL ADDRESS: STREET 1: EAST 64 MIDLAND AVE CITY: PARAMUS STATE: NJ ZIP: 07652 FORMER COMPANY: FORMER CONFORMED NAME: NOISE COM INC/NJ DATE OF NAME CHANGE: 19930328 10-Q 1 c66609_10-q.htm

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 
 
 

FORM 10-Q

(Mark One)

 

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended June 30, 2011

 

 

OR

 

 

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the transition period from _________________ to _________________

 

Commission file number

1-11916

 

 

WIRELESS TELECOM GROUP, INC.

(Exact name of registrant as specified in its charter)


 

 

 

New Jersey

 

22-2582295

(State or Other Jurisdiction

 

(I.R.S. Employer

of Incorporation or Organization)

 

Identification No.)

25 Eastmans Road
Parsippany, New Jersey

 

07054

(Address of Principal Executive Offices)

 

(Zip Code)


 

(973) 386-9696

(Registrant’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 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 o

          Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x  No o

          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). (Check one):

 

 

 

 

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

Smaller reporting company x

          Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

Number of shares of Common Stock outstanding as of August 9, 2011: 25,039,046


WIRELESS TELECOM GROUP, INC.

Table of Contents

 

 

 

 

 

 

 

Page(s)

PART I. FINANCIAL INFORMATION

 

 

 

 

Item 1 -- Consolidated Financial Statements:

 

 

 

 

 

 

Condensed Balance Sheets as of June 30, 2011 (unaudited) and December 31, 2010

3

 

 

 

 

 

 

Condensed Statements of Operations for the Three and Six Months Ended June 30, 2011 (unaudited) and 2010 (unaudited)

4

 

 

 

 

 

 

Condensed Statements of Cash Flows for the Six Months Ended June 30, 2011 (unaudited) and 2010 (unaudited)

5

 

 

 

 

 

 

Condensed Statement of Shareholders’ Equity for the Six Months Ended June 30, 2011 (unaudited)

6

 

 

 

 

 

 

Notes to Interim Condensed Financial Statements (unaudited)

7

 

 

 

 

 

Item 2 -- Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

 

 

 

 

Item 3 -- Quantitative and Qualitative Disclosures About Market Risk

21

 

 

 

 

Item 4 -- Controls and Procedures

21

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1 -- Legal Proceedings

22

 

 

 

 

Item 1A – Risk Factors

22

 

 

 

 

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

22

 

 

 

 

Item 3 -- Defaults upon Senior Securities

22

 

 

 

 

Item 4 – Removed and Reserved

22

 

 

 

 

Item 5 -- Other Information

22

 

 

 

 

Item 6 – Exhibits

22

 

 

 

Signatures

23

 

 

Exhibit Index

24

2


PART 1 – FINANCIAL INFORMATION

Item 1 – Financial Statements

WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,
2011

 

 

 

December 31,
2010

 

 

 

     

 

     

 

 

 

(unaudited)

 

 

 

 

 

- ASSETS -

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

12,418,774

 

 

 

$

13,643,220

 

Accounts receivable - net of allowance for doubtful accounts of $92,357 and $73,819 for 2011 and 2010, respectively

 

 

 

4,240,110

 

 

 

 

4,303,720

 

Inventories

 

 

 

7,476,410

 

 

 

 

6,935,172

 

Deferred income taxes - current

 

 

 

294,841

 

 

 

 

457,215

 

Prepaid expenses and other current assets

 

 

 

401,399

 

 

 

 

465,798

 

 

 

 

   

 

 

 

   

 

TOTAL CURRENT ASSETS

 

 

 

24,831,534

 

 

 

 

25,805,125

 

 

 

 

   

 

 

 

   

 

PROPERTY, PLANT AND EQUIPMENT - NET

 

 

 

4,297,860

 

 

 

 

4,333,690

 

 

 

 

   

 

 

 

   

 

OTHER ASSETS:

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

 

1,351,392

 

 

 

 

1,351,392

 

Deferred income taxes - non-current

 

 

 

5,757,159

 

 

 

 

5,236,175

 

Other assets

 

 

 

889,555

 

 

 

 

892,433

 

 

 

 

   

 

 

 

   

 

TOTAL OTHER ASSETS

 

 

 

7,998,106

 

 

 

 

7,480,000

 

 

 

 

   

 

 

 

   

 

TOTAL ASSETS

 

 

$

37,127,500

 

 

 

$

37,618,815

 

 

 

 

   

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

- LIABILITIES AND SHAREHOLDERS’ EQUITY -

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

$

1,265,295

 

 

 

$

743,398

 

Accrued expenses and other current liabilities

 

 

 

901,919

 

 

 

 

2,360,057

 

Current portion of mortgage payable

 

 

 

70,972

 

 

 

 

68,347

 

 

 

 

   

 

 

 

   

 

TOTAL CURRENT LIABILITIES

 

 

 

2,238,186

 

 

 

 

3,171,802

 

 

 

 

   

 

 

 

   

 

LONG TERM LIABILITIES:

 

 

 

 

 

 

 

 

 

 

Mortgage payable

 

 

 

2,666,758

 

 

 

 

2,702,912

 

 

 

 

   

 

 

 

   

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

 

 

Preferred stock, $.01 par value, 2,000,000 shares authorized, none issued

 

 

 

-

 

 

 

 

-

 

Common stock, $.01 par value, 75,000,000 shares authorized, 28,883,861 and 28,753,861 shares issued, respectively, 25,086,786 and 25,658,203 shares outstanding, respectively

 

 

 

288,839

 

 

 

 

287,539

 

Additional paid-in-capital

 

 

 

37,801,009

 

 

 

 

37,746,005

 

Retained earnings

 

 

 

2,144,085

 

 

 

 

1,257,371

 

Treasury stock at cost, 3,797,075 and 3,095,658 shares, respectively

 

 

 

(8,011,377

)

 

 

 

(7,546,814

)

 

 

 

   

 

 

 

   

 

TOTAL SHAREHOLDERS’ EQUITY

 

 

 

32,222,556

 

 

 

 

31,744,101

 

 

 

 

   

 

 

 

   

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

$

37,127,500

 

 

 

$

37,618,815

 

 

 

 

   

 

 

 

   

 

See accompanying notes

3


WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months
Ended June 30,

 

For the Six Months
Ended June 30,

 

 

 

 

 

 

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

$

6,472,756

 

$

6,080,604

 

$

12,549,711

 

$

12,217,946

 

 

 

   

 

   

 

   

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF SALES

 

 

3,554,978

 

 

3,124,767

 

 

6,982,073

 

 

6,459,062

 

 

 

   

 

   

 

   

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

2,917,778

 

 

2,955,837

 

 

5,567,638

 

 

5,758,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

572,334

 

 

553,735

 

 

1,097,118

 

 

1,095,067

 

Sales and marketing

 

 

1,219,850

 

 

966,232

 

 

2,413,657

 

 

1,952,488

 

General and administrative

 

 

913,554

 

 

1,114,730

 

 

1,547,191

 

 

2,078,645

 

 

 

   

 

   

 

   

 

   

 

TOTAL OPERATING EXPENSES

 

 

2,705,738

 

 

2,634,697

 

 

5,057,966

 

 

5,126,200

 

 

 

   

 

   

 

   

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

212,040

 

 

321,140

 

 

509,672

 

 

632,684

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER (INCOME) EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest (income)

 

 

(281

)

 

(3,327

)

 

(3,577

)

 

(6,778

)

Interest expense

 

 

51,961

 

 

53,189

 

 

104,238

 

 

106,671

 

Other (income) - net

 

 

(174,573

)

 

(42,766

)

 

(230,123

)

 

(104,896

)

 

 

   

 

   

 

   

 

   

 

TOTAL OTHER (INCOME) EXPENSE

 

 

(122,893

)

 

7,096

 

 

(129,462

)

 

(5,003

)

 

 

   

 

   

 

   

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

 

 

334,933

 

 

314,044

 

 

639,134

 

 

637,687

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROVISION (BENEFIT) FOR INCOME TAXES

 

 

(166,229

)

 

15,809

 

 

(247,580

)

 

19,154

 

 

 

   

 

   

 

   

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS

 

 

501,162

 

 

298,235

 

 

886,714

 

 

618,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS) FROM DISCONTINUED OPERATIONS - NET OF TAXES

 

 

-

 

 

(458,493

)

 

-

 

 

(1,742,853

)

 

 

   

 

   

 

   

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

501,162

 

$

(160,258

)

$

886,714

 

$

(1,124,320

)

 

 

   

 

   

 

   

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

 

$0.02

 

 

$0.01

 

 

$0.04

 

 

$0.02

 

Discontinued operations

 

 

$0.00

 

 

($0.02

)

 

$0.00

 

 

($0.07

)

 

 

   

 

   

 

   

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER COMMON SHARE:

 

 

$0.02

 

 

($0.01

)

 

$0.04

 

 

($0.05

)

 

 

   

 

   

 

   

 

   

 

See accompanying notes

4


WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

 

 

 

 

 

 

 

 

 

 

For the SIx Months
Ended June 30,

 

 

 

 

 

 

 

2011

 

2010

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income (loss)

 

$

886,714

 

$

(1,124,320

)

Adjustments to reconcile net income (loss) to net cash (used for) operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

249,755

 

 

366,258

 

Loss on sale of discontinued operations

 

 

-

 

 

430,565

 

Stock compensation expense

 

 

56,304

 

 

100,182

 

Deferred income taxes

 

 

(358,610

)

 

(134,936

)

Provision for (recovery of) losses on accounts receivable

 

 

18,538

 

 

(93,630

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

 

45,072

 

 

(526,839

)

Inventories

 

 

(541,238

)

 

(814,734

)

Prepaid expenses and other assets

 

 

67,277

 

 

34,653

 

Accounts payable, accrued expenses and other current liabilities

 

 

(936,241

)

 

(1,949,284

)

 

 

   

 

   

 

Net cash (used for) operating activities

 

 

(512,429

)

 

(3,712,085

)

 

 

   

 

   

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

Capital expenditures

 

 

(213,925

)

 

(120,690

)

Proceeds from disposition of Willtek assets - net

 

 

-

 

 

2,749,975

 

 

 

   

 

   

 

Net cash provided by (used for) investing activities

 

 

(213,925

)

 

2,629,285

 

 

 

   

 

   

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

Payments of mortgage note

 

 

(33,529

)

 

(31,096

)

Payment of bank note

 

 

-

 

 

(1,475,149

)

Acquisition of treasury stock - 701,417 shares

 

 

(464,563

)

 

-

 

 

 

   

 

   

 

Net cash (used for) financing activities

 

 

(498,092

)

 

(1,506,245

)

 

 

   

 

   

 

 

 

 

 

 

 

 

 

Effect of foreign currency on cash and cash equivalents

 

 

-

 

 

(149,862

)

 

 

   

 

   

 

 

 

 

 

 

 

 

 

NET (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

(1,224,446

)

 

(2,738,907

)

 

 

 

 

 

 

 

 

Cash and cash equivalents, at beginning of period

 

 

13,643,220

 

 

14,076,382

 

 

 

   

 

   

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, AT END OF PERIOD

 

$

12,418,774

 

$

11,337,475

 

 

 

   

 

   

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

Taxes

 

$

103,470

 

$

278,891

 

 

 

 

 

 

 

 

 

Interest

 

$

104,238

 

$

133,229

 

See accompanying notes

5


WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

Additional Paid
In Capital

 

Retained
Earnings

 

Treasury Stock

 

Total
Shareholders’
Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2010

 

 

$287,539

 

 

$37,746,005

 

 

$1,257,371

 

 

$(7,546,814)

 

 

$31,744,101

 

 

Net income

 

 

-

 

 

-

 

 

886,714

 

 

-

 

 

886,714

 

Shares issued under restricted stock plan

 

 

1,300

 

 

(1,300

)

 

-

 

 

-

 

 

-

 

Stock compensation expense

 

 

-

 

 

56,304

 

 

-

 

 

-

 

 

56,304

 

Repurchase of treasury stock

 

 

-

 

 

-

 

 

-

 

 

(464,563)

 

 

(464,563

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2011

 

 

$288,839

 

 

$37,801,009

 

 

$2,144,085

 

 

$(8,011,377)

 

 

$32,222,556

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes

6


WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES

 

 

 

The condensed consolidated balance sheet as of June 30, 2011, the condensed consolidated statements of operations for the three and six-month periods ended June 30, 2011 and 2010, the condensed consolidated statements of cash flows for the six-month periods ended June 30, 2011 and 2010 and the condensed consolidated statement of shareholders’ equity for the six-month period ended June 30, 2011 have been prepared by the Company without audit. The condensed consolidated financial statements include the accounts of Wireless Telecom Group, Inc. and its wholly-owned subsidiaries Boonton Electronics Corporation, Microlab/FXR, Willtek Communications GmbH (“Willtek”), WTG Foreign Sales Corporation and NC Mahwah, Inc., collectively the “Company”. All significant intercompany transactions and balances have been eliminated in consolidation.

 

 

 

On May 7, 2010, the Company sold substantially all of the assets and liabilities of its foreign subsidiary, Willtek. Accordingly, the operating activities of Willtek for the three and six-months ended June 30, 2010 are included in the Company’s condensed consolidated statement of operations as discontinued operations (see Note 3).

 

 

 

In the opinion of management, the accompanying condensed consolidated financial statements referred to above contain all necessary adjustments, consisting of normal accruals and recurring entries, which are necessary to present fairly the Company’s results for the interim periods being presented.

 

 

 

The accounting policies followed by the Company are set forth in Note 1 to the Company’s financial statements included in its annual report on Form 10-K for the year ended December 31, 2010. Specific reference is made to that report since certain information and footnote disclosures normally included in financial statements in accordance with accounting principles generally accepted in the United States of America (US GAAP) have been condensed or omitted from this report.

 

 

 

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including inventory valuation, accounts receivable valuation, valuation of deferred tax assets, accrued warranty expense, estimated fair values of stock options and assets held for sale) and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of net revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

 

 

The results of operations for the three and six-month periods ended June 30, 2011 and 2010 are not necessarily indicative of the results to be expected for the full year.

 

 

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.

 

 

 

The Company maintains significant cash investments primarily with two financial institutions, which at times may exceed federally insured limits. The Company performs periodic evaluations of the relative credit rating of these institutions as part of its investment strategy.

 

 

 

Concentrations of credit risk with respect to accounts receivable are limited due to the Company’s large customer base. However, at June 30, 2011, primarily all of the Company’s receivables do pertain to the telecommunications industry.

 

 

 

The carrying amounts of cash and cash equivalents, trade receivables, other current assets and accounts payable approximate fair value due to the short-term nature of these instruments. At June 30, 2011, the fair value (estimated based upon expected cash outflows discounted at current market rates) and carrying value of the fixed rate mortgage payable amounted to $2,813,741 and $2,737,730, respectively.

7


WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

 

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES (Continued)

 

 

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of bank and money market accounts.

 

 

 

The Company has evaluated subsequent events through the date the financial statements were issued and has determined that there were no subsequent events or transactions requiring recognition or disclosure in the condensed consolidated financial statements.

 

 

 

Certain prior period information has been reclassified to conform to the current period’s reporting presentation.

 

 

NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS

 

 

 

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-05, “Presentation of Comprehensive Income.” This update eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and requires all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires an entity to present reclassification adjustments on the face of the financial statements from other comprehensive income to net income. This ASU is effective for the Company beginning January 1, 2012. The Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements.

 

 

 

In May 2011, the FASB issued ASU 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This standard amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This ASU is effective for financial periods beginning after December 15, 2011 and is to be applied prospectively. The Company does not expect this guidance to have a material impact on its condensed consolidated financial statements.

 

 

 

In December 2010, the FASB issued ASU 2010-28, “When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts” (amendments to FASB ASC Topic 350, Intangibles, Goodwill and Other). The objective of this ASU is to address diversity in practice in the application of goodwill impairment testing by entities with reporting units with zero or negative carrying amounts, eliminating an entity’s ability to assert that a reporting unit is not required to perform Step 2 because the carrying amount of the reporting unit is zero or negative despite the existence of qualitative factors that indicate the goodwill is more likely than not impaired. This ASU is effective for interim periods after January 1, 2011. The Company’s adoption of this ASU did not have a material impact on its condensed consolidated financial statements.

8


WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE 3 – DISCONTINUED OPERATIONS

 

 

 

As mentioned in Note 1, the operating activities of Willtek for the three and six-months ended June 30, 2010 are included in the Company’s condensed consolidated statement of operations as discontinued operations. The following table summarizes the components of discontinued operations for the three and six-months ended June 30, 2010:


 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30, 2010

 

Six Months Ended
June 30, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

$

1,533,173

 

 

$

6,642,152

 

Gross profit

 

 

 

403,038

 

 

 

2,609,331

 

(Loss) from discontinued operations before taxes

 

 

 

(638,543

)

 

 

(1,313,032

)

(Benefit) for income taxes

 

 

 

(985

)

 

 

(744

)

(Loss) from discontinued operations

 

 

 

(637,558

)

 

 

(1,312,288

)

Gain (loss) on sale of discontinued operations

 

 

 

179,065

 

 

 

(430,565

)

 

 

 

   

 

 

   

 

Net (loss) from discontinued operations

 

 

$

(458,493

)

 

$

(1,742,853

)

 

 

 

   

 

 

   

 

 

 

 

 

 

 

 

 

 

 

Cash flows from discontinued operations for the six-months ended June 30, 2010 are combined with the cash flows from operations within each of the three categories presented below. Cash flows from discontinued operations for the six-months ended June 30, 2010 are as follows:


 

 

 

 

 

 

 

 

Six Months Ended
June 30, 2010

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

$

(321,147)

 

Cash flows from investing activities

 

 

$

(3,136)

 

Cash flows from financing activities

 

 

$

-

 


 

 

NOTE 4 – INCOME TAXES

 

 

 

The Company records deferred taxes in accordance with ASC 740, “Accounting for Income Taxes”. This ASC requires recognition of deferred tax assets and liabilities for temporary differences between tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The Company periodically assesses the value of its deferred tax asset and determines the necessity for a valuation allowance. The Company evaluates which portion, if any, will more likely than not be realized by offsetting future taxable income, taking into consideration any limitations that may exist on its use of its net operating loss carry-forwards.

 

 

 

The components of deferred income taxes are as follows:


 

 

 

 

 

 

 

 

 

 

June 30,
2011

 

December 31,
2010

 

 

 

 

 

 

 

Deferred tax assets:

 

 

 

 

 

 

 

Uniform capitalization of inventory costs for tax purposes

 

 

$     197,897

 

 

$    185,024

 

Allowances for doubtful accounts

 

 

36,943

 

 

29,528

 

Accruals

 

 

60,000

 

 

242,663

 

Tax effect of goodwill

 

 

(167,580

)

 

(116,228

)

Book depreciation over tax

 

 

33,076

 

 

23,494

 

Net operating loss carryforward

 

 

18,423,732

 

 

18,709,159

 

 

 

 

 

 

 

 

 

 

 

 

18,584,068

 

 

19,073,640

 

Valuation allowance for deferred tax assets

 

 

(12,532,068

)

 

(13,380,250

)

 

 

 

 

 

 

 

 

 

 

 

$ 6,052,000

 

 

$5,693,390

 

 

 

 

 

 

 

 

 

9


WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

 

 

NOTE 4 – INCOME TAXES (Continued)

 

 

 

Under ASC 740, the Company must recognize the tax benefit from an uncertain position only if it is more-likely-than-not the tax position will be sustained on examination by the taxing authority, based on the technical merits of the position. The tax benefits recognized in the financial statements attributable to such position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon the ultimate resolution of the position.

 

 

 

By adoption of ASC 740, the Company has analyzed its filing positions in all of the federal, state and foreign jurisdictions where it is required to file income tax returns. As of June 30, 2011, the Company has identified its federal tax return, its state tax return in New Jersey and its foreign return in Germany as “major” tax jurisdictions, as defined, in which it is required to file income tax returns. Based on the evaluations noted above, the Company has concluded that there are no significant uncertain tax positions requiring recognition or disclosure in its condensed consolidated financial statements.

 

 

 

Based on a review of tax positions for all open years and contingencies as set out in the Company’s notes to the condensed consolidated financial statements, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740 during the periods ended June 30, 2011 and 2010.

 

 

NOTE 5 - INCOME (LOSS) PER COMMON SHARE

 

 

 

Basic earnings (loss) per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share are calculated by using the weighted average number of shares of common stock outstanding and, when dilutive, potential shares from stock options and warrants to purchase common stock, using the treasury stock method.


 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

25,061,590

 

25,658,203

 

25,022,008

 

25,658,203

Potentially dilutive stock options

 

98,283

 

42,744

 

179,616

 

40,502

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, assuming dilution

 

25,159,873

 

25,700,947

 

25,201,624

 

25,698,705

 

 

 

 

 

 

 

 

 

 

 

 

Common stock options are included in the diluted earnings (loss) per share calculation when the various option exercise prices are less than their relative average market price during the periods presented in this quarterly report. The weighted average number of options not included in diluted earnings (loss) per share, because the effects are anti-dilutive, was 2,414,285 and 2,480,626 for the three-months ended June 30, 2011 and 2010, respectively. For the six-months ended June 30, 2011 and 2010, the weighted average number of potentially dilutive options not included in diluted earnings (loss) per share was 2,333,499 and 2,525,430, respectively.

 

 

NOTE 6 – INVENTORIES

 

 

 

Inventory carrying value is net of inventory reserves of $521,032 and $452,310 at June 30, 2011 and December 31, 2010, respectively.


 

 

 

 

 

 

 

 

Inventories consist of:

 

June 30,
2011

 

December 31,
2010

 

 

 

 

 

 

 

 

 

 

 

 

 

Raw materials

 

 

$4,807,434

 

 

$4,632,195

 

Work-in-process

 

 

1,166,552

 

 

830,684

 

Finished goods

 

 

1,502,424

 

 

1,472,293

 

 

 

 

 

 

 

 

 

 

 

 

$7,476,410

 

 

$6,935,172

 

 

 

 

 

 

 

 

10


WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

 

 

NOTE 7 - GOODWILL

 

 

 

The Company reviews the goodwill of its subsidiary, Microlab, for impairment whenever events or changes in circumstances indicate that the carrying amount of this asset may not be recoverable, and also reviews Microlab’s goodwill annually in accordance with Accounting Standards Codification (ASC) 350, “Accounting for Business Combinations, Goodwill, and Other Intangible Assets.” The process of evaluating the potential impairment of goodwill is ongoing, subjective and requires significant judgment and estimates regarding future cash flows and forecasts. Goodwill represents the excess of the cost of an acquisition over fair value of net assets acquired. Testing for the impairment of goodwill involves a two step process. The first step of the impairment test requires the comparing of a reporting unit’s fair value to its carrying value. If the carrying value is less than the fair value, no impairment exists and the second step is not performed. If the carrying value is higher than the fair value, there is an indication that impairment may exist and the second step must be performed to compute the amount of the impairment.

 

 

 

In the second step, the impairment is computed by estimating the fair value of all recognized and unrecognized assets and liabilities of the reporting unit and comparing the implied fair value of reporting unit goodwill with the carrying amount of that unit’s goodwill. As noted above, goodwill is attributable to one of the Company’s reporting units, Microlab.

 

 

 

In the fourth quarter of 2010, management performed their annual impairment test of goodwill which indicated that Microlab’s fair value was significantly in excess of its carrying value, therefore, there was no impairment recorded at December 31, 2010.

 

 

NOTE 8 - ACCOUNTING FOR STOCK BASED COMPENSATION

 

 

 

The Company follows the provisions of ASC 718, “Share-Based Payment.” The Company’s results for the three and six-month periods ended June 30, 2011 include share-based compensation expense totaling $34,903 and $56,304, respectively. Results for the three and six-month periods ended June 30, 2010 include share-based compensation expense of $50,091 and $100,182, respectively. Such amounts have been included in the Condensed Consolidated Statements of Operations within operating expenses.

 

 

 

Stock option compensation expense relative to service-based options is the estimated fair value of options granted, amortized on a straight-line basis over the requisite service period. Stock option compensation expense relating to performance-based options is the estimated fair value of options granted, recognized when stated performance targets are achieved, or expected to be achieved.

 

 

 

The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. For all performance-based options granted, the Company took into consideration guidance under ASC 718 and SEC Staff Accounting Bulletin No. 107 (SAB 107) when reviewing and updating assumptions. The expected option life is derived from assumed exercise rates based upon historical exercise patterns and represents the period of time that options granted are expected to be outstanding. The expected volatility is based upon historical volatility of our shares using weekly price observations over an observation period that approximates the expected life of the options. The risk-free rate is based on the U.S. Treasury yield curve rate in effect at the time of grant for periods similar to the expected option life. The estimated forfeiture rate included in the option valuation was zero.

 

 

 

The Company did not grant stock options during the three or six-months ended June 30, 2011. However, during the three months ended June 30, 2010, the Company entered into a stock option agreement dated as of April 15, 2010, pursuant to which an employee of the Company was awarded options to purchase up to 300,000 shares of the Company’s common stock at an exercise price of $0.96 per share, representing a 5% premium over the average closing bid and asked prices of the Company’s common stock for the five trading days previous to the date of grant. The options are performance-based and are subject to the same performance criteria as those granted to the Company’s Chief Executive Officer in 2009.

11


WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

 

 

NOTE 8 - ACCOUNTING FOR STOCK BASED COMPENSATION (Continued)

 

 

 

During the three-months ended June 30, 2011, the Company adjusted its outstanding stock options by 100,000 shares due to expiration. Additionally, during the three-months ended June 30, 2010, the Company adjusted its outstanding stock options by 301,300 shares due to expiration. At June 30, 2011, the total number of stock option shares outstanding, which includes both service-based and performance-based options, was 2,413,667.

 

 

 

The following table represents our service-based stock options granted, exercised, forfeited and canceled during the first six months of 2011:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

Weighted
Average
Exercise
Price per share

 

Weighted
Average
Remaining
Contractual
Term

 

Aggregate
Intrinsic
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

Service-based Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at January 1, 2011

 

 

 

1,143,667

 

 

 

$

2.60

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canceled/Expired

 

 

 

(70,000

)

 

 

$

2.46

 

 

 

 

 

 

 

 

 

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at June 30, 2011

 

 

 

1,073,667

 

 

 

$

2.61

 

 

 

 

3.2

 

 

 

-

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at June 30, 2011

 

 

 

1,013,667

 

 

 

$

2.59

 

 

 

 

3.0

 

 

 

-

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

The following table represents our performance-based stock options granted, exercised, forfeited and canceled during the first six months of 2011:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

Weighted
Average
Exercise
Price per share

 

Weighted
Average
Remaining
Contractual
Term

 

Aggregate
Intrinsic
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance-based Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at January 1, 2011

 

 

 

1,370,000

 

 

 

$

0.92

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canceled/Expired

 

 

 

(30,000

)

 

 

$

0.78

 

 

 

 

 

 

 

 

 

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at June 30, 2011

 

 

 

1,340,000

 

 

 

$

0.92

 

 

 

 

8.6

 

 

 

-

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at June 30, 2011

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

As of June 30, 2011, the unearned compensation related to Company granted service-based incentive stock options is $26,002 which will continue to be amortized on a straight-line basis through the end of 2011. The fair value, and unamortized amount, of performance-based options granted by the Company as of June 30, 2011 is $836,959. This unearned compensation will not be recognized until management considers the respective performance conditions to be achievable.

 

 

 

On June 8, 2010, the Company issued 40,000 shares of restricted common stock to select members of its board of directors. The shares were granted at the June 8, 2010 closing market price of $0.84 per share and vested on June 14, 2011, the date of the Company’s annual shareholders meeting, or a vesting period of approximately one year. The total compensation expense recognized over the vesting period was $33,600.

 

 

 

On March 22, 2011, the Company awarded 50,000 shares of restricted common stock to its Chief Executive Officer. The shares were granted at the March 22, 2011 closing market price of $1.08 per share and will fully vest on the one-year anniversary from date of grant. The total compensation expense to be recognized over the vesting period is $54,000 which will be amortized on a straight-line basis.

12


WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

 

 

NOTE 8 - ACCOUNTING FOR STOCK BASED COMPENSATION (Continued)

 

 

 

On June 14, 2011, the Company issued 40,000 shares of restricted common stock to select members of its board of directors. The shares were granted at the June 14, 2011 closing market price of $0.78 per share and will vest on the date of the Company’s next annual shareholders meeting, a vesting period of approximately one year. The total compensation expense to be recognized over the vesting period is $31,200 which will be amortized on a straight-line basis.

 

 

 

A summary of the status of the Company’s non-vested restricted common stock as of June 30, 2011, and changes during the six-months ended June 30, 2011 are presented below:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-vested Shares

 

 

Number of Shares

 

Weighted Average
Grant Date
Fair Value

 

 

 

 

 

 

 

 

 

 

Non-vested at January 1, 2011

 

 

40,000

 

 

 

$

0.84

 

 

 

Granted

 

 

90,000

 

 

 

$

0.95

 

 

 

Vested

 

 

(40,000

)

 

 

($

0.84

)

 

 

 

 

 

 

 

 

 

   

 

 

 

Non-vested at June 30, 2011

 

 

90,000

 

 

 

$

0.95

 

 

 

 

 

 

 

 

 

 

   

 

 


 

 

 

As of June 30, 2011, the unearned compensation related to Company granted restricted stock is $71,700 which will continue to be amortized through June 30, 2012.

 

 

NOTE 9 – SEGMENT INFORMATION: REGIONAL SALES

 

 

 

The Company, in accordance with ASC 280, “Disclosures about Segments of an Enterprise and Related Information”, has disclosed the following segment information:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months
Ended June 30,

 

For the Six Months
Ended June 30,

 

Revenues by region

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

4,865,322

 

$

4,462,514

 

$

8,927,285

 

$

8,687,911

 

Europe, Middle East, Africa (EMEA)

 

 

1,111,409

 

 

1,055,734

 

 

2,659,675

 

 

2,463,835

 

Asia Pacific (APAC)

 

 

496,025

 

 

562,356

 

 

962,751

 

 

1,066,200

 

 

 

   

 

   

 

   

 

   

 

Total Revenues

 

$

6,472,756

 

$

6,080,604

 

$

12,549,711

 

$

12,217,946

 

 

 

   

 

   

 

   

 

   

 


 

 

 

Net sales are attributable to a geographic area based on the destination of the product shipment. The majority of shipments in the Americas are to customers located within the United States. Although shipments to the EMEA region were not significantly concentrated in one country, shipments to the APAC region were largely concentrated in China.

 

 

 

Due to the significant concentration of shipments to both the United States and China, the following table discloses the revenue attributable to these two countries:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months
Ended June 30,

 

For the Six Months
Ended June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

4,557,492

 

$

4,317,230

 

$

8,376,819

 

$

8,125,248

 

China

 

 

240,524

 

 

281,549

 

 

458,150

 

 

527,444

 

13


WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

 

 

NOTE 10 - COMMITMENTS AND CONTINGENCIES

 

 

 

The Company typically provides one-year warranties on all of its products covering both parts and labor. The Company, at its option, repairs or replaces products that are defective during the warranty period if the proper preventive maintenance procedures have been followed by its customers. Historically, warranty expense within the Company has been minimal. In 2009, there was a onetime increase of $240,000 in warranty costs due to the potential rework of specific product shipped in 2008. In the first quarter of 2011, the Company reversed the one-time warranty accrual as this product is no longer being produced at original specifications and management believes there is a remote likelihood that any units will be returned. This amount represented the maximum potential warranty related to these shipments.

 

 

 

The Company typically provides one-year warranties on all of its products covering both parts and labor. The Company, at its option, repairs or replaces products that are defective during the warranty period if the proper preventive maintenance procedures have been followed by its customers. Historically, warranty expense within the Company has been minimal. In 2009, there was a onetime increase of $240,000 in warranty costs due to the potential rework of specific product shipped in 2008. In the first quarter of 2011, the Company reversed the one-time warranty accrual as this product is no longer being produced at original specifications and management believes there is a remote likelihood that any units will be returned. This amount represented the maximum potential warranty related to these shipments.

 

 

 

Following an investigation by the New Jersey Department of Environmental Protection (NJDEP) in 1982, of the waste disposal practices at a certain site formerly leased by Boonton, the Company put a ground water management plan into effect as approved by the NJDEP. Costs associated with this site are charged directly to income as incurred. The owner of this site has previously notified the Company that if the NJDEP investigation proves to have interfered with a sale of the property, the owner may seek to hold the Company liable for any resulting damages. Since May 1983, the owner has been on notice of this problem and has failed to institute any legal proceedings with respect thereto. While this does not bar the owner from instituting a suit, it is the opinion of the Company’s legal counsel that it is unlikely that the owner would prevail on any claim.

 

 

 

In 2010, the Company hired a new environmental consultant to evaluate the results of the current remediation plan that has been in effect since 1982. The Company is diligently pursuing efforts to satisfy the requirements of the original plan and receive a new determination from the NJDEP. Overall data from recent testing in the Spring of 2011 indicates the continuation of a decreasing concentration trend at the site. The overall decrease supports the absence of a continuing source impacting ground water. The Company believes that its current practice and plan of groundwater testing will continue until an official notification from NJDEP is obtained and the Company is released from further obligations. While management anticipates that the expenditures in connection with this site will not be substantial in future years, the Company could be subject to significant future liabilities and may incur significant future expenditures if further contaminants from Boonton’s testing are identified and the NJDEP requires additional remediation activities. Management is unable to estimate future remediation costs, if any, at this time. The Company will continue to be liable under the plan, in all future years, until such time as the NJDEP releases it from all obligations applicable thereto.

 

 

 

In 2010, the Company entered into a software license and support agreement with an accounting and business software supplier as part of an investment to upgrade the Company’s business and systems infrastructure. The costs associated with the systems migration are expected not to exceed $350,000.

 

 

 

The Company maintains a line of credit with its investment bank. The credit facility provides borrowing availability of up to 100% of the Company’s money market account balance and 99% of the Company’s short-term investment securities (U.S. Treasury bills) and, under the terms and conditions of the loan agreement, is fully secured by said money fund account and short-term investment holdings. Advances under the facility will bear interest at a variable rate equal to the London InterBank Offered Rate (“LIBOR”) in effect at time of borrowing. Additionally, under the terms and conditions of the loan agreement, there is no annual fee and any amount outstanding under the loan facility may be paid at any time in whole or in part without penalty. As of June 30, 2011, the Company had no borrowings outstanding under the facility and approximately $6,100,000 of borrowing availability. The Company has no current plans to borrow from this credit facility as it believes its present cash balances will adequately meet near-term working capital requirements.

14


WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE 10 - COMMITMENTS AND CONTINGENCIES (Continued)

 

 

 

Proprietary information and know-how are important to the Company’s commercial success. There can be no assurance that others will not either develop independently the same or similar information or obtain and use proprietary information of the Company. Certain key employees have signed confidentiality and non-compete agreements regarding the Company’s proprietary information.

 

 

 

The Company believes that its products do not infringe the proprietary rights of third parties. There can be no assurance, however, that third parties will not assert infringement claims in the future.

 

 

 

On May 5, 2011, the Company entered into a building lease agreement with its current landlord to remain at its principal corporate headquarters in Hanover Township, Parsippany, NJ. The term of the lease agreement is for three years beginning October 1, 2011 and ending September 30, 2014. The minimum monthly rent payment will be approximately $29,000. The Company will benefit from a reduction in the base rent rate, realizing savings of approximately $480,000 over the three year term, or approximately $160,000 when annualized.

15


ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

Wireless Telecom Group, Inc., and its operating subsidiaries, (collectively, the “Company”), develop, manufacture and market a wide variety of electronic noise sources, electronic testing and measuring instruments including power meters, voltmeters and modulation meters and high-power passive microwave components for wireless products. The Company’s products have historically been primarily used to test the performance and capability of cellular/PCS and satellite communication systems and to measure the power of RF and microwave systems. Other applications include radio, radar, wireless local area network (WLAN) and digital television.

On May 7, 2010, the Company sold substantially all of the assets and liabilities of its foreign subsidiary, Willtek. Accordingly, the operating activities of Willtek for the three and six-months ended June 30, 2010 are included in the Company’s condensed consolidated statement of operations as discontinued operations.

The financial information presented herein includes:
(i) Condensed Consolidated Balance Sheets as of June 30, 2011 (unaudited) and as of December 31, 2010 (ii) Condensed Consolidated Statements of Operations for the three and six-month periods ended June 30, 2011 (unaudited) and 2010 (unaudited) (iii) Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2011 (unaudited) and 2010 (unaudited) and (iv) Condensed Consolidated Statement of Shareholders’ Equity for the six-month period ended June 30, 2011 (unaudited).

FORWARD LOOKING STATEMENTS

The statements contained in this Quarterly Report on Form 10-Q that are not historical facts, including, without limitation, the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believes,” “expects,” “intends,” “plans,” “may,” “will,” “should,” “anticipates” or “continues” or the negative thereof of other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. These statements are based on the Company’s current expectations of future events and are subject to a number of risks and uncertainties that may cause the Company’s actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, product demand and development of competitive technologies in our market sector, the impact of competitive products and pricing, the loss of any significant customers, the effects of adoption of newly announced accounting standards, the effects of economic conditions and trade, legal and other economic risks, among others. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. These risks and uncertainties are disclosed from time to time in the Company’s filings with the Securities and Exchange Commission, the Company’s press releases and in oral statements made by or with the approval of authorized personnel. The Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments.

CRITICAL ACCOUNTING POLICIES

Management’s discussion and analysis of the financial condition and results of operations are based upon the Company’s condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses for each period. The following represents a summary of the Company’s critical accounting policies, defined as those policies that the Company believes are: (a) the most important to the portrayal of its financial condition and results of operations, and (b) that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

16


ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Share-Based Compensation

The Company follows the provisions of Accounting Standards Codification (ASC) 718, “Share-Based Payment”. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. For the performance-based options granted, the Company takes into consideration guidance under ASC 718 and SEC Staff Accounting Bulletin No. 107 (SAB 107) when reviewing and updating assumptions. The expected option life is derived from assumed exercise rates based upon historical exercise patterns and represents the period of time that options granted are expected to be outstanding. The expected volatility is based upon historical volatility of our shares using weekly price observations over an observation period of three years. The risk-free rate is based on the U.S. Treasury yield curve rate in effect at the time of grant for periods similar to the expected option life. The estimated forfeiture rate included in the option valuation was zero.

Revenue Recognition

Revenue from product shipments, including shipping and handling fees, is recognized once delivery has occurred provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, and collectibility is reasonably assured. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. Sales to international distributors are recognized in the same manner. If title does not pass until the product reaches the customer’s delivery site, then recognition of revenue is deferred until that time. There are no formal sales incentives offered to any of the Company’s customers. Volume discounts may be offered from time to time to customers purchasing large quantities on a per transaction basis. There are no material special post shipment obligations or acceptance provisions that exist with any sales arrangements.

Valuation of Inventory

Raw material inventories are stated at the lower of cost (first-in, first-out method) or market. Finished goods and work-in-process are valued at average cost of production, which includes material, labor and manufacturing expenses.

Allowances for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. A key consideration in estimating the allowance for doubtful accounts has been, and will continue to be, our customer’s payment history and aging of its accounts receivable balance. If the financial condition of any of its customers were to decline, additional allowances might be required.

Income Taxes

The Company records deferred taxes in accordance with ASC 740, “Accounting for Income Taxes”. This ASC requires recognition of deferred tax assets and liabilities for temporary differences between tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The Company periodically assesses the value of its deferred tax asset, a majority of which has been generated by a history of net operating losses and determines the necessity for a valuation allowance. The Company evaluates which portion, if any, will more likely than not be realized by offsetting future taxable income, taking into consideration any limitations that may exist on its use of its net operating loss carry-forwards.

Uncertain Tax Positions

Under ASC 740, the Company must recognize the tax benefit from an uncertain position only if it is more-likely-than-not the tax position will be sustained on examination by the taxing authority, based on the technical merits of the position. The tax benefits recognized in the financial statements attributable to such position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon the ultimate resolution of the position.

17


ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

By adoption of ASC 740, the Company has analyzed its filing positions in all of the federal, state and foreign jurisdictions where it is required to file income tax returns. As of June 30, 2011 and December 31, 2010, the Company has identified its federal tax return, its state tax return in New Jersey and its foreign return in Germany as “major” tax jurisdictions, as defined, in which it is required to file income tax returns. Based on the evaluations noted above, the Company has concluded that there are no significant uncertain tax positions requiring recognition or disclosure in its condensed consolidated financial statements.

Based on a review of tax positions for all open years and contingencies as set out in the Company’s notes to the consolidated financial statements, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740 during the periods ended June 30, 2011 and 2010.

RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our interim condensed consolidated financial statements and the notes to those statements included in Part I, Item I of this Quarterly Report on Form 10-Q and in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2010.

For the six-months ended June 30, 2011 as compared to the corresponding period of the previous year, net sales increased to approximately $12,550,000 from approximately $12,218,000, an increase of approximately $332,000 or 2.7%. For the three-months ended June 30, 2011 as compared to the corresponding period of the previous year, net sales increased to approximately $6,473,000 from approximately $6,081,000, an increase of approximately $392,000 or 6.4%. The increases are primarily due a strong demand for the Company’s RF and microwave components for distributed antenna systems (“DAS”) and a general increase in order activity with government agencies and prime defense contractors. The Company expects government and aerospace spending on specific defense programs to increase throughout 2011 as spending budgets are finalized and approved.

Gross profit on net sales for the six-months ended June 30, 2011 was approximately $5,568,000 or 44.4% as compared to approximately $5,759,000 or 47.1% of net sales for the six-months ended June 30, 2010. Gross profit on net sales for the three-months ended June 30, 2011 was approximately $2,918,000 or 45.1% as compared to approximately $2,956,000 or 48.6% of net sales for the three-months ended June 30, 2010. Gross profit margins are lower for the three and six-months ended June 30, 2011 as compared to the same periods of the previous year primarily due to significant severance costs being allocated to comparatively flat revenues and product mix, as the Company’s microwave component products typically provide lower margins than its test and measurement instruments. During the six-months ended June 30, 2011, the Company incurred severance costs relating to the implementation of a cost reduction plan which included several manufacturing employees. The severance amount paid to these manufacturing employees during the first quarter was approximately $73,000. Additionally, during the six-months ended June 30, 2011, the Company carried excess inventory in the amount of approximately $270,000 relating to a recently discontinued product line. This inventory was sold in its entirety at cost which negatively impacted gross profit.

The Company’s products consist of several models with varying degrees of capabilities which can be customized to meet particular customer requirements. They may be incorporated directly into the electronic equipment concerned or may be stand alone components or devices that are connected to, or used in conjunction with, such equipment from an external site, in the factory or in the field. The Company can experience variations in gross profit based upon the mix of these products sold, as well as, variations due to revenue volume and economies of scale. Manufacturing overhead costs remained relatively consistent period over period. The Company continues to carefully monitor costs associated with material acquisition, manufacturing and production.

Operating expenses for the six-months ended June 30, 2011 were approximately $5,058,000 or 40% of net sales as compared to approximately $5,126,000 or 42% of net sales for the six-months ended June 30, 2010. Operating expenses are lower for the six-months ended June 30, 2011 primarily due to a decrease in general and administrative expenses, offset by an increase in sales and marketing expenses and a slight increase in research and development expenses. Operating expenses for the three-months ended June 30, 2011 were approximately $2,706,000 or 42% as compared to approximately $2,635,000 or 43% of net sales for the three-months ended June 30, 2010. Operating expenses are higher for the three-months ended June 30, 2011 primarily due to increases in sales and marketing expenses and research and development expenses, offset by a decrease in general and administrative expenses.

18


ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The decreases in general and administrative expenses are primarily due to a decrease in non-cash stock option charges, a decrease in professional fees, lower bonus accruals and the reversal of a specific warranty accrual in the amount of $240,000 relating to product shipped in 2008. The Company determined that there is a remote likelihood that any of these specific units will be returned and subsequently reversed the accrual. Sales and marketing expenses increased primarily due to severance paid to certain sales employees in connection with the cost reduction plan mentioned above and higher, order-specific commissions paid to the Company’s external, non-employee sales representatives.

Interest income decreased by approximately $3,000 for the three and six-months ended June 30, 2011, respectively, as compared to the corresponding periods of the previous year. Interest income is derived from the Company’s cash investment account. Substantially all of the Company’s cash is invested in money market funds.

Other income, net of other non-operating expense, increased by approximately $132,000 for the three-months ended June 30, 2011 as compared to the corresponding period of the previous year. For the six-months ended June 30, 2011, other income, net of other non-operating expense, increased by approximately $125,000 as compared to the corresponding period of the previous year. The increase in other income is primarily due to a realized gain from the sale of an investment security during the three-months ended June 30, 2011. Other income was partially offset by non-operating expense incurred during the three and six-months ended June 30, 2011 for services relating to the ground water testing being performed at the former site of the Company’s subsidiary, Boonton. The Company has been testing the ground water in this site since 1982 in accordance with state regulations. The Company has hired a new environmental consultant to evaluate the results of the current remediation plan that has been in effect since 1982. The Company is diligently pursuing efforts to satisfy the requirements of the original plan and receive a new determination from the NJDEP. Management continues to be encouraged by recent test results which support improvements in ground water conditions over time. Overall data from recent testing in the Spring of 2011 indicates the continuation of a decreasing concentration trend at the site. The overall decrease supports the absence of a continuing source impacting ground water. The Company believes that its current practice and plan of groundwater testing will continue until an official notification from NJDEP is obtained and the Company is released from further obligations. While management anticipates that the expenditures in connection with this site will not be substantial in future years, the Company could be subject to significant future liabilities and may incur significant future expenditures if any additional contamination is identified and the NJDEP requires additional remediation.

The income tax benefit for the three and six-months ended June 30, 2011 includes an adjustment to deferred taxes of approximately $93,000 and approximately $359,000, respectively, based upon estimated realizable amounts of the utilization of operating loss carryforwards, offset by state income tax expense. For the three and six-months ended June 30, 2010, income tax expense includes state income tax expense and an adjustment to federal income taxes recoverable, partially offset by an adjustment to deferred taxes of approximately $92,000 and approximately $135,000, respectively. The Company has recorded a net deferred tax benefit for federal tax purposes in connection with its disposition of Willtek. This tax benefit is expected to be realized in future periods as taxable income in those periods will be offset by net operating loss carryforwards. Management has provided a valuation allowance in the deferred tax asset resulting from these net operating loss carryforwards based upon the expected benefit to be realized from the future utilization of these carryforward losses. In evaluating the recoverability of the deferred tax asset, management projects actual taxable income over the next five years. Accordingly, the recorded amount of the deferred tax asset is subject to judgment by management and could differ from the actual benefit.

For the three-months ended June 30, 2011, the Company realized income from continuing operations of approximately $501,000 or $0.02 per share on a diluted basis, as compared to income from continuing operations of approximately $298,000 or $0.01 per share on a diluted basis for the three-months ended June 30, 2010, an increase of approximately $203,000. For the six-months ended June 30, 2011, the Company realized income from continuing operations of approximately $887,000 or $0.04 per share on a diluted basis, as compared to income from continuing operations of approximately $619,000 or $0.02 per share on a diluted basis for the six-months ended June 30, 2010, an increase of approximately $268,000. These increases were primarily due to the analysis mentioned above.

For the three and six-months ended June 30, 2010, net loss from discontinued operations was approximately $459,000 or $0.02 per share on a diluted basis and $1,743,000 or $0.07 per share on a diluted basis, respectively. The loss for the three-months ended June 30, 2010 was primarily due to approximately $638,000 of operating losses in Willtek off-set by a $179,000 adjustment to the loss on the sale of Willtek recognized during this three-month period. The loss for the six-months ended June 30, 2010 was primarily due to approximately $431,000 of a loss recognized on the sale of Willtek and approximately $1,312,000 of operating losses in Willtek for this six- month period.

19


ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

For the six-months ended June 30, 2011, the Company realized net income of approximately $887,000 or $0.04 income per share on a diluted basis, as compared to a net loss of approximately $1,124,000 or $0.05 loss per share on a diluted basis for the corresponding period of the previous year, an increase of approximately $2,011,000. Net income was approximately $501,000 or $0.02 income per share on a diluted basis for the three-months ended June 30, 2011 as compared to a net loss of approximately $160,000 or $0.01 loss per share on a diluted basis for the three-months ended June 30, 2010, an increase of approximately $661,000. The net income and loss fluctuation was primarily due to the impact of the divestiture of Willtek and the overall analysis above.

LIQUIDITY AND CAPITAL RESOURCES:

The Company’s working capital has decreased by approximately $39,000 to approximately $22,594,000 at June 30, 2011, from approximately $22,633,000 at December 31, 2010. At June 30, 2011 the Company had a current ratio of 11.1 to 1, and a ratio of debt to tangible net worth of .2 to 1. At December 31, 2010, the Company had a current ratio of 8.1 to 1, and ratio of debt to tangible net worth of .2 to 1.

The Company had cash and cash equivalents of approximately $12,419,000 at June 30, 2011, compared to approximately $13,643,000 at December 31, 2010. In January 2011, the Company paid approximately $874,000 in disposition fees relating to the sale of Willtek which were recorded as accrued expenses in the Company’s consolidated balance sheet at December 31, 2010. Additionally in 2011, the Company has to date repurchased approximately 701,000 shares of its outstanding common stock at a cost of approximately $465,000. The Company believes its current level of cash and cash equivalents is sufficient to fund the current operating, investing and financing activities.

The Company expects to realize tax benefits in future periods due to the available net operating loss carryforwards resulting from the disposition of Willtek in 2010. Accordingly, future taxable income is expected to be offset by the utilization of operating loss carryforwards and as a result, will increase the Company’s liquidity as cash needed to pay Federal income taxes will be substantially reduced.

The Company used cash for operating activities of approximately $512,000 for the six-month period ending June 30, 2011. The primary use of this cash was due to a decrease in accounts payable, accrued expenses and other current liabilities and an increase in inventory, partially offset by a decrease in prepaid expenses and other assets and a decrease in accounts receivable.

The Company has historically been able to turn over its accounts receivable approximately every two months. This average collection period has been sufficient to provide the working capital and liquidity necessary to operate the Company.

The Company used cash for operating activities, including discontinued operations, of approximately $3,712,000 for the six-month period ending June 30, 2010. The primary use of this cash was due to a loss from operations as well as a decrease in accounts payable, accrued expenses and other current liabilities, an increase in inventory, and an increase in accounts receivable, partially off-set by a decrease in prepaid expenses and other assets.

Net cash used for investing activities for the six-months ended June 30, 2011 was approximately $214,000. The use of these funds was for capital expenditures. Net cash provided by investing activities for the six-months ended June 30, 2010 was approximately $2,629,000. The source of these funds was from proceeds relating to the disposition of Willtek, off-set by capital expenditures.

Cash used for financing activities for the six-months ended June 30, 2011 was approximately $499,000. The use of these funds was for the acquisition of treasury stock, which was approved by the Company’s board of directors in 2010, and the periodic payments of a mortgage note. Cash used for financing activities for the six-months ended June 30, 2010 was approximately $1,506,000. The use of these funds was for the re-payment of a bank loan and periodic payments of a mortgage note.

20


ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The Company maintains a line of credit with its investment bank. The credit facility provides borrowing availability of up to 100% of the Company’s money market account balance and 99% of the Company’s short-term investment securities (U.S. Treasury bills) and, under the terms and conditions of the loan agreement, is fully secured by said money fund account and short-term investment holdings. Advances under the facility will bear interest at a variable rate equal to the London InterBank Offered Rate (“LIBOR”) in effect at time of borrowing. Additionally, there is no annual fee and any amount outstanding under the loan facility may be paid at any time in whole or in part without penalty. As of June 30, 2011, the Company had no borrowings outstanding under the facility and approximately $6,100,000 of borrowing availability.

The Company believes that its financial resources from working capital are adequate to meet its current needs. However, should current global economic conditions deteriorate, additional working capital funding may be required which may be difficult to obtain due to restrictive credit markets.

OFF-BALANCE SHEET ARRANGEMENTS

Other than contractual obligations incurred in the normal course of business, the Company does not have any off-balance sheet arrangements.

INFLATION AND SEASONALITY

The Company does not anticipate that inflation will significantly impact its business or its results of operations nor does it believe that its business is seasonal.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4 - CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of the end of the period covered by this report, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Act of 1934. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be included in our Securities and Exchange Commission (“SEC”) reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, relating to Wireless Telecom Group, Inc., including our consolidated subsidiaries, and was made known to them by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the period covered by this report, our disclosure controls and procedures are effective.

(b) Changes in Internal Controls over Financial Reporting

In connection with the evaluation required by paragraph (d) of Rule 13a-15 under the Exchange Act, there was no change identified in our internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

21


PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

 

 

 

The Company is not aware of any material legal proceeding against the Company or in which any of their property is subject.

Item 1A. RISK FACTORS

 

 

 

The Company is not aware of any material changes from risk factors as previously disclosed in its Form 10-K for the year ended December 31, 2010.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

 

 

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

 

 

 

None.

Item 4. REMOVED AND RESERVED

Item 5. OTHER INFORMATION

 

 

 

None.

Item 6. EXHIBITS

 

 

 

 

 

Exhibit No.

 

 

Description

 

 

 

 

 

 

 

 

 

31.1

 

Certification Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 (Principal Executive Officer)

 

 

 

31.2

 

Certification Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 (Principal Financial Officer)

 

 

 

32.1

 

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 (Principal Executive Officer)

 

 

 

32.2

 

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 (Principal Financial Officer)

 

 

 

101

 

The following financial statements, from Wireless Telecom Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed on August 15, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of operations, (iii) condensed consolidated statements of cash flows, (iv) condensed consolidated statement of shareholders’ equity, and (v) the notes to the condensed consolidated financial statements.(1)

 

 

 

(1)

As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

22


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

WIRELESS TELECOM GROUP, INC.

 

(Registrant)

 

 

Date: August 15, 2011

/S/Paul Genova

 

 

Paul Genova

 

Chief Executive Officer

 

 

Date: August 15, 2011

/S/Robert Censullo

 

 

Robert Censullo

 

Acting Chief Financial Officer

23


EXHIBIT LIST

 

 

 

 

 

Exhibit No.

 

 

Description

 

 

 

 

 

 

 

 

 

31.1

 

Certification Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 (Principal Executive Officer)

 

 

 

31.2

 

Certification Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 (Principal Financial Officer)

 

 

 

32.1

 

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 (Principal Executive Officer)

 

 

 

32.2

 

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 (Principal Financial Officer)

 

 

 

101

 

The following financial statements from Wireless Telecom Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed on August 15, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of operations, (iii) condensed consolidated statements of cash flows, (iv) condensed consolidated statement of shareholders’ equity, and (v) the notes to the condensed consolidated financial statements.(1)

 

 

 

(1)

As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

24


EX-31.1 2 c66609_ex31-1.htm

Exhibit 31.1

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

          I, Paul Genova, certify that:

          1.          I have reviewed this quarterly report on Form 10-Q of Wireless Telecom Group, Inc.;

          2.          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;

          3.          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;

          4.          I am 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;

          5.          The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to 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 controls over financial reporting.

 

 

 

Date: August 15, 2011

 

 

 

 

 

 

/s/ Paul Genova

 

 

Paul Genova

 

Chief Executive Officer

 

(Principal Executive Officer)

25


EX-31.2 3 c66609_ex31-2.htm

Exhibit 31.2

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

          I, Robert Censullo, certify that:

          1.          I have reviewed this quarterly report on Form 10-Q of Wireless Telecom Group, Inc.;

          2.          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;

          3.          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;

          4.          I am 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;

          5.          The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to 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 controls over financial reporting.

 

 

 

Date: August 15, 2011

 

 

 

 

/s/ Robert Censullo

 

 

Robert Censullo

 

Acting Chief Financial Officer

 

(Principal Financial Officer)

26


EX-32.1 4 c66609_ex32-1.htm

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 Quarterly Report of Wireless Telecom Group, Inc. (the “Company”) on Form 10-Q for the quarter ending June 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Periodic Report”), I, Paul Genova, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

          (1) The Periodic Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

 

 

 

/s/ Paul Genova

 

 

Paul Genova

 

Chief Executive Officer

 

August 15, 2011

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

27


EX-32.2 5 c66609_ex32-2.htm

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 Quarterly Report of Wireless Telecom Group, Inc. (the “Company”) on Form 10-Q for the quarter ending June 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Periodic Report”), I, Robert Censullo, Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

 

 

(1)

The Periodic Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

(2)

The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


 

 

 

 

/s/ Robert Censullo

 

 

Robert Censullo

 

Acting Chief Financial Officer

 

August 15, 2011

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

28


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The condensed consolidated financial statements include the accounts of Wireless Telecom Group, Inc. and its wholly-owned subsidiaries Boonton Electronics Corporation, Microlab/FXR, Willtek Communications GmbH (&#8220;Willtek&#8221;), WTG Foreign Sales Corporation and NC Mahwah, Inc., collectively the &#8220;Company&#8221;. All significant intercompany transactions and balances have been eliminated in consolidation.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">On May 7, 2010, the Company sold substantially all of the assets and liabilities of its foreign subsidiary, Willtek. Accordingly, the operating activities of Willtek for the three and six-months ended June 30, 2010 are included in the Company&#8217;s condensed consolidated statement of operations as discontinued operations (see Note 3).</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">In the opinion of management, the accompanying condensed consolidated financial statements referred to above contain all necessary adjustments, consisting of normal accruals and recurring entries, which are necessary to present fairly the Company&#8217;s results for the interim periods being presented.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">The accounting policies followed by the Company are set forth in Note 1 to the Company&#8217;s financial statements included in its annual report on Form 10-K for the year ended December 31, 2010. Specific reference is made to that report since certain information and footnote disclosures normally included in financial statements in accordance with accounting principles generally accepted in the United States of America (US GAAP) have been condensed or omitted from this report.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including inventory valuation, accounts receivable valuation, valuation of deferred tax assets, accrued warranty expense, estimated fair values of stock options and assets held for sale) and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of net revenue and expenses during the reporting period. Actual results could differ from those estimates.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">The results of operations for the three and six-month periods ended June 30, 2011 and 2010 are not necessarily indicative of the results to be expected for the full year.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">The Company maintains significant cash investments primarily with two financial institutions, which at times may exceed federally insured limits. The Company performs periodic evaluations of the relative credit rating of these institutions as part of its investment strategy.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">Concentrations of credit risk with respect to accounts receivable are limited due to the Company&#8217;s large customer base. However, at June 30, 2011, primarily all of the Company&#8217;s receivables do pertain to the telecommunications industry.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">The carrying amounts of cash and cash equivalents, trade receivables, other current assets and accounts payable approximate fair value due to the short-term nature of these instruments. At June 30, 2011, the fair value (estimated based upon expected cash outflows discounted at current market rates) and carrying value of the fixed rate mortgage payable amounted to $2,813,741 and $2,737,730, respectively.</font> </p> </td> </tr> </table><br/><table border="0" cellspacing="0" cellpadding="0" width="100%"> <tr style="FONT-SIZE:1PX"> <td width="4%" valign="top"> <p> &#160; </p> </td> <td width="96%" valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td colspan="2" valign="top"> <p align="justify"> <font size="1" style="font-family: ARIAL;"><b>&#160;</b></font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of bank and money market accounts.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">The Company has evaluated subsequent events through the date the financial statements were issued and has determined that there were no subsequent events or transactions requiring recognition or disclosure in the condensed consolidated financial statements.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">Certain prior period information has been reclassified to conform to the current period&#8217;s reporting presentation.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> </table><br/> <p align="justify"> <font size="2" style="font-family: ARIAL;"><b>NOTE 2 &#8211; RECENT ACCOUNTING PRONOUNCEMENTS</b></font> </p><br/><table border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td colspan="2" valign="top"> </td> </tr> <tr> <td width="4%" valign="top"> <p> <font size="1" style="font-family: ARIAL;"><b>&#160;</b></font> </p> </td> <td width="96%" valign="top"> <p align="justify"> <font size="1" style="font-family: ARIAL;"><b>&#160;</b></font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">In June 2011, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued Accounting Standards Update (&#8220;ASU&#8221;) 2011-05, &#8220;Presentation of Comprehensive Income.&#8221; This update eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders&#8217; equity and requires all non-owner changes in stockholders&#8217; equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires an entity to present reclassification adjustments on the face of the financial statements from other comprehensive income to net income. This ASU is effective for the Company beginning January 1, 2012. The Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">In May 2011, the FASB issued ASU 2011-04, &#8220;Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.&#8221; This standard amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This ASU is effective for financial periods beginning after December 15, 2011 and is to be applied prospectively. The Company does not expect this guidance to have a material impact on its condensed consolidated financial statements.</font> </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">In December 2010, the FASB issued ASU 2010-28, &#8220;When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts&#8221; (amendments to FASB ASC Topic 350, Intangibles, Goodwill and Other). The objective of this ASU is to address diversity in practice in the application of goodwill impairment testing by entities with reporting units with zero or negative carrying amounts, eliminating an entity&#8217;s ability to assert that a reporting unit is not required to perform Step 2 because the carrying amount of the reporting unit is zero or negative despite the existence of qualitative factors that indicate the goodwill is more likely than not impaired. This ASU is effective for interim periods after January 1, 2011. The Company&#8217;s adoption of this ASU did not have a material impact on its condensed consolidated financial statements.</font> </p> </td> </tr> </table><br/> <p> <font size="2" style="font-family: ARIAL;"><b>NOTE 3 &#8211; DISCONTINUED OPERATIONS</b></font> </p><br/><table border="0" cellspacing="0" cellpadding="0" width="100%"> <tr style="FONT-SIZE:1PX"> <td width="4%" valign="top"> <p> &#160; </p> </td> <td width="96%" valign="top"> <p align="justify"> &#160; </p> </td> </tr> <tr> <td valign="top"> <p> &#160; </p> </td> <td valign="top"> <p align="justify"> <font size="2" style="font-family: ARIAL;">As mentioned in Note 1, the operating activities of Willtek for the three and six-months ended June 30, 2010 are included in the Company&#8217;s condensed consolidated statement of operations as discontinued operations. The following table summarizes the components of discontinued operations for the three and six-months ended June 30, 2010:</font> </p> </td> </tr> </table><br/><table border="0" cellspacing="0" cellpadding="0" width="95%" style="MARGIN-LEFT:5%"> <tr style="FONT-SIZE:1PX"> <td width="63%" valign="bottom"> <p> &#160; </p> </td> <td width="3%" valign="bottom"> <p> &#160; </p> </td> <td width="8%" valign="bottom"> <p align="right"> &#160; </p> </td> <td width="1%" valign="bottom"> <p align="right"> &#160; </p> </td> <td width="6%" valign="bottom"> <p align="right"> &#160; </p> </td> <td width="3%" valign="bottom"> <p> &#160; </p> </td> <td width="5%" valign="bottom"> <p> &#160; </p> </td> <td width="1%" valign="bottom"> <p align="right"> &#160; </p> </td> <td width="8%" valign="bottom"> <p align="right"> &#160; </p> </td> <td width="1%" valign="bottom"> <p> &#160; </p> </td> </tr> <tr> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td colspan="3" valign="bottom"> <p align="center"> <font size="2" style="font-family: ARIAL;">Three Months Ended<br /> June 30, 2010</font> </p> </td> <td valign="bottom"> <p align="center"> <font size="1" style="font-family: ARIAL;">&#160;</font> </p> </td> <td colspan="3" valign="bottom"> <p align="center"> <font size="2" style="font-family: ARIAL;">Six Months Ended<br /> June 30, 2010</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr style="FONT-SIZE:1 PX"> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td colspan="3" valign="bottom" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="bottom"> <p align="center"> &#160; </p> </td> <td colspan="3" valign="bottom" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr style="background-color: #E5FFFF;"> <td valign="bottom"> <p> <font size="2" style="font-family: ARIAL;">Net sales</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">$</font> </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">1,533,173</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">$</font> </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">6,642,152</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr> <td valign="bottom"> <p> <font size="2" style="font-family: ARIAL;">Gross profit</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">403,038</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">2,609,331</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr style="background-color: #E5FFFF;"> <td valign="bottom"> <p> <font size="2" style="font-family: ARIAL;">(Loss) from discontinued operations before taxes</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(638,543</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(1,313,032</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> </tr> <tr> <td valign="bottom"> <p> <font size="2" style="font-family: ARIAL;">(Benefit) for income taxes</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(985</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(744</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> </tr> <tr style="background-color: #E5FFFF;"> <td valign="bottom"> <p> <font size="2" style="font-family: ARIAL;">(Loss) from discontinued operations</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(637,558</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(1,312,288</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> </tr> <tr> <td valign="bottom"> <p> <font size="2" style="font-family: ARIAL;">Gain (loss) on sale of discontinued operations</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">179,065</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(430,565</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> </tr> <tr style="FONT-SIZE:1 PX"> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="top" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="top" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="top" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="top" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr style="background-color: #E5FFFF;"> <td valign="bottom"> <p> <font size="2" style="font-family: ARIAL;">Net (loss) from discontinued operations</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">$</font> </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(458,493</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">$</font> </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(1,742,853</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> </tr> <tr style="FONT-SIZE:1 PX"> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="top" style="BORDER-BOTTOM:DOUBLE BLACK 3PX"> &#160; </td> <td valign="top" style="BORDER-BOTTOM:DOUBLE BLACK 3PX"> &#160; </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom" style="BORDER-BOTTOM:DOUBLE BLACK 3PX"> &#160; </td> <td valign="bottom" style="BORDER-BOTTOM:DOUBLE BLACK 3PX"> &#160; </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr> <td colspan="10" valign="bottom"> <p> <font size="2" style="font-family: ARIAL;">Cash flows from discontinued operations for the six-months ended June 30, 2010 are combined with the cash flows from operations within each of the three categories presented below. 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</p> </td> <td width="9%" valign="bottom"> <p align="right"> &#160; </p> </td> <td width="1%" valign="bottom"> <p> &#160; </p> </td> </tr> <tr> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td colspan="2" valign="bottom"> <p align="center"> <font size="2" style="font-family: ARIAL;">June 30,<br /> 2011</font> </p> </td> <td valign="bottom"> <p align="center"> <font size="1" style="font-family: ARIAL;">&#160;</font> </p> </td> <td colspan="2" valign="bottom"> <p align="center"> <font size="2" style="font-family: ARIAL;">December 31,<br /> 2010</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr style="FONT-SIZE:1 PX"> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td colspan="2" valign="bottom" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="bottom"> <p align="center"> &#160; </p> </td> <td colspan="2" valign="bottom" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr style="background-color: #E5FFFF;"> <td valign="bottom"> <p> <font size="2" style="font-family: ARIAL;">Deferred tax assets:</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr> <td valign="bottom"> <p style="MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT"> <font size="2" style="font-family: ARIAL;">Uniform capitalization of inventory costs for tax purposes</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">$&#160;&#160;&#160;&#160;&#160;197,897</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">$&#160;&#160;&#160;&#160;185,024</font> </p> </td> <td valign="bottom"> <p> &#160; 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</p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">242,663</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr style="background-color: #E5FFFF;"> <td valign="bottom"> <p style="MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT"> <font size="2" style="font-family: ARIAL;">Tax effect of goodwill</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(167,580</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">(116,228</font> </p> </td> <td valign="bottom"> <p align="left"> <font size="2" style="font-family: ARIAL;">)</font> </p> </td> </tr> <tr> <td valign="bottom"> <p style="MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT"> <font size="2" style="font-family: ARIAL;">Book depreciation over tax</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">33,076</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">23,494</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr style="background-color: #E5FFFF;"> <td valign="bottom"> <p style="MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT"> <font size="2" style="font-family: ARIAL;">Net operating loss carryforward</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">18,423,732</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">18,709,159</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr style="FONT-SIZE:1 PX"> <td valign="bottom"> <p style="MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT"> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom" style="BORDER-BOTTOM:DOUBLE BLACK 3PX"> &#160; </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom" style="BORDER-BOTTOM:DOUBLE BLACK 3PX"> &#160; </td> <td valign="bottom"> <p> &#160; </p> </td> </tr> <tr> <td valign="bottom"> <p style="MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT"> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">18,584,068</font> </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p> &#160; </p> </td> <td valign="bottom"> <p align="right"> <font size="2" style="font-family: ARIAL;">19,073,640</font> </p> </td> <td valign="bottom"> <p> &#160; 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</p> </td> <td valign="bottom"> <p align="center"> &#160; </p> </td> <td valign="bottom" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="bottom"> <p align="center"> &#160; </p> </td> <td valign="bottom" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="bottom"> <p align="center"> &#160; </p> </td> <td valign="bottom" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> <td valign="bottom"> <p align="center"> &#160; </p> </td> <td valign="bottom" style="BORDER-BOTTOM:SOLID BLACK 1PX"> &#160; </td> </tr> <tr> <td valign="bottom"> <p align="center"> <font size="1" style="font-family: ARIAL;">&#160;</font> </p> </td> <td valign="bottom"> <p align="center"> <font size="1" style="font-family: ARIAL;">&#160;</font> </p> </td> <td valign="bottom"> <p align="center"> <font size="2" style="font-family: ARIAL;"><b>&#160;</b></font> </p> </td> <td valign="bottom"> <p align="center"> <font size="1" style="font-family: ARIAL;">&#160;</font> </p> </td> <td valign="bottom"> <p align="center"> <font size="1" style="font-family: ARIAL;">&#160;</font> </p> </td> <td valign="bottom"> <p align="center"> <font size="1" style="font-family: ARIAL;">&#160;</font> </p> </td> <td valign="bottom"> <p align="center"> <font size="2" style="font-family: ARIAL;"><b>&#160;</b></font> </p> </td> <td valign="bottom"> <p align="center"> <font size="1" style="font-family: ARIAL;">&#160;</font> </p> </td> <td valign="bottom"> <p align="center"> <font size="1" style="font-family: ARIAL;">&#160;</font> </p> </td> </tr> <tr style="background-color: #E5FFFF;"> <td valign="bottom"> <p> <font size="2" style="font-family: ARIAL;">Weighted average common shares outstanding</font> </p> </td> <td valign="bottom"> <p> &#160; 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Jun. 30, 2011
Dec. 31, 2010
Allowance for doubtful accounts (in Dollars) $ 92,357 $ 73,819
Preferred stock par value (in Dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 2,000,000 2,000,000
Preferred stock, shares issued 0 0
Common stock par value (in Dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 75,000,000 75,000,000
Common stock, shares issued 28,883,861 28,753,861
Common stock, shares outstanding 25,086,786 25,658,203
Treasury stock, shares 3,797,075 3,095,658
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2011
Jun. 30, 2010
Jun. 30, 2011
Jun. 30, 2010
NET SALES $ 6,472,756 $ 6,080,604 $ 12,549,711 $ 12,217,946
COST OF SALES 3,554,978 3,124,767 6,982,073 6,459,062
GROSS PROFIT 2,917,778 2,955,837 5,567,638 5,758,884
OPERATING EXPENSES        
Research and development 572,334 553,735 1,097,118 1,095,067
Sales and marketing 1,219,850 966,232 2,413,657 1,952,488
General and administrative 913,554 1,114,730 1,547,191 2,078,645
TOTAL OPERATING EXPENSES 2,705,738 2,634,697 5,057,966 5,126,200
OPERATING INCOME 212,040 321,140 509,672 632,684
OTHER (INCOME) EXPENSE        
Interest (income) (281) (3,327) (3,577) (6,778)
Interest expense 51,961 53,189 104,238 106,671
Other (income) - net (174,573) (42,766) (230,123) (104,896)
TOTAL OTHER (INCOME) EXPENSE (122,893) 7,096 (129,462) (5,003)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 334,933 314,044 639,134 637,687
PROVISION (BENEFIT) FOR INCOME TAXES (166,229) 15,809 (247,580) 19,154
INCOME FROM CONTINUING OPERATIONS 501,162 298,235 886,714 618,533
(LOSS) FROM DISCONTINUED OPERATIONS - NET OF TAXES   (458,493)   (1,742,853)
NET INCOME (LOSS) $ 501,162 $ (160,258) $ 886,714 $ (1,124,320)
BASIC AND DILUTED        
Continuing operations (in Dollars per share) $ 0.02 $ 0.01 $ 0.04 $ 0.02
Discontinued operations (in Dollars per share) $ 0.00 $ (0.02) $ 0.00 $ (0.07)
NET INCOME (LOSS) PER COMMON SHARE: (in Dollars per share) $ 0.02 $ (0.01) $ 0.04 $ (0.05)
XML 14 R1.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Document And Entity Information
6 Months Ended
Jun. 30, 2011
Aug. 09, 2011
Document and Entity Information [Abstract]    
Entity Registrant Name WIRELESS TELECOM GROUP INC  
Document Type 10-Q  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   25,039,046
Amendment Flag false  
Entity Central Index Key 0000878828  
Entity Current Reporting Status Yes  
Entity Voluntary Filers No  
Entity Filer Category Smaller Reporting Company  
Entity Well-known Seasoned Issuer Yes  
Document Period End Date Jun. 30, 2011
Document Fiscal Year Focus 2011  
Document Fiscal Period Focus Q2  
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XML 16 R12.htm IDEA: XBRL DOCUMENT  v2.3.0.11
INCOME (LOSS) PER COMMON SHARE
6 Months Ended
Jun. 30, 2011
Earnings Per Share [Text Block]

NOTE 5 - INCOME (LOSS) PER COMMON SHARE


 

 

 

Basic earnings (loss) per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share are calculated by using the weighted average number of shares of common stock outstanding and, when dilutive, potential shares from stock options and warrants to purchase common stock, using the treasury stock method.


 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

25,061,590

 

25,658,203

 

25,022,008

 

25,658,203

Potentially dilutive stock options

 

98,283

 

42,744

 

179,616

 

40,502

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, assuming dilution

 

25,159,873

 

25,700,947

 

25,201,624

 

25,698,705

 

 

 

 

 

 

 

 

 

 

 

 

Common stock options are included in the diluted earnings (loss) per share calculation when the various option exercise prices are less than their relative average market price during the periods presented in this quarterly report. The weighted average number of options not included in diluted earnings (loss) per share, because the effects are anti-dilutive, was 2,414,285 and 2,480,626 for the three-months ended June 30, 2011 and 2010, respectively. For the six-months ended June 30, 2011 and 2010, the weighted average number of potentially dilutive options not included in diluted earnings (loss) per share was 2,333,499 and 2,525,430, respectively.

 

 


XML 17 R17.htm IDEA: XBRL DOCUMENT  v2.3.0.11
COMMITMENTS AND CONTINGENCIES
6 Months Ended
Jun. 30, 2011
Commitments and Contingencies Disclosure [Text Block]

NOTE 10 - COMMITMENTS AND CONTINGENCIES


 

 

 

 

 

The Company typically provides one-year warranties on all of its products covering both parts and labor. The Company, at its option, repairs or replaces products that are defective during the warranty period if the proper preventive maintenance procedures have been followed by its customers. Historically, warranty expense within the Company has been minimal. In 2009, there was a onetime increase of $240,000 in warranty costs due to the potential rework of specific product shipped in 2008. In the first quarter of 2011, the Company reversed the one-time warranty accrual as this product is no longer being produced at original specifications and management believes there is a remote likelihood that any units will be returned. This amount represented the maximum potential warranty related to these shipments.

 

 

 

The Company typically provides one-year warranties on all of its products covering both parts and labor. The Company, at its option, repairs or replaces products that are defective during the warranty period if the proper preventive maintenance procedures have been followed by its customers. Historically, warranty expense within the Company has been minimal. In 2009, there was a onetime increase of $240,000 in warranty costs due to the potential rework of specific product shipped in 2008. In the first quarter of 2011, the Company reversed the one-time warranty accrual as this product is no longer being produced at original specifications and management believes there is a remote likelihood that any units will be returned. This amount represented the maximum potential warranty related to these shipments.

 

 

 

Following an investigation by the New Jersey Department of Environmental Protection (NJDEP) in 1982, of the waste disposal practices at a certain site formerly leased by Boonton, the Company put a ground water management plan into effect as approved by the NJDEP. Costs associated with this site are charged directly to income as incurred. The owner of this site has previously notified the Company that if the NJDEP investigation proves to have interfered with a sale of the property, the owner may seek to hold the Company liable for any resulting damages. Since May 1983, the owner has been on notice of this problem and has failed to institute any legal proceedings with respect thereto. While this does not bar the owner from instituting a suit, it is the opinion of the Company’s legal counsel that it is unlikely that the owner would prevail on any claim.

 

 

 

In 2010, the Company hired a new environmental consultant to evaluate the results of the current remediation plan that has been in effect since 1982. The Company is diligently pursuing efforts to satisfy the requirements of the original plan and receive a new determination from the NJDEP. Overall data from recent testing in the Spring of 2011 indicates the continuation of a decreasing concentration trend at the site. The overall decrease supports the absence of a continuing source impacting ground water. The Company believes that its current practice and plan of groundwater testing will continue until an official notification from NJDEP is obtained and the Company is released from further obligations. While management anticipates that the expenditures in connection with this site will not be substantial in future years, the Company could be subject to significant future liabilities and may incur significant future expenditures if further contaminants from Boonton’s testing are identified and the NJDEP requires additional remediation activities. Management is unable to estimate future remediation costs, if any, at this time. The Company will continue to be liable under the plan, in all future years, until such time as the NJDEP releases it from all obligations applicable thereto.

 

 

 

In 2010, the Company entered into a software license and support agreement with an accounting and business software supplier as part of an investment to upgrade the Company’s business and systems infrastructure. The costs associated with the systems migration are expected not to exceed $350,000.

 

 

 

The Company maintains a line of credit with its investment bank. The credit facility provides borrowing availability of up to 100% of the Company’s money market account balance and 99% of the Company’s short-term investment securities (U.S. Treasury bills) and, under the terms and conditions of the loan agreement, is fully secured by said money fund account and short-term investment holdings. Advances under the facility will bear interest at a variable rate equal to the London InterBank Offered Rate (“LIBOR”) in effect at time of borrowing. Additionally, under the terms and conditions of the loan agreement, there is no annual fee and any amount outstanding under the loan facility may be paid at any time in whole or in part without penalty. As of June 30, 2011, the Company had no borrowings outstanding under the facility and approximately $6,100,000 of borrowing availability. The Company has no current plans to borrow from this credit facility as it believes its present cash balances will adequately meet near-term working capital requirements.


 

 

   

 

Proprietary information and know-how are important to the Company’s commercial success. There can be no assurance that others will not either develop independently the same or similar information or obtain and use proprietary information of the Company. Certain key employees have signed confidentiality and non-compete agreements regarding the Company’s proprietary information.

 

 

 

The Company believes that its products do not infringe the proprietary rights of third parties. There can be no assurance, however, that third parties will not assert infringement claims in the future.

 

 

 

On May 5, 2011, the Company entered into a building lease agreement with its current landlord to remain at its principal corporate headquarters in Hanover Township, Parsippany, NJ. The term of the lease agreement is for three years beginning October 1, 2011 and ending September 30, 2014. The minimum monthly rent payment will be approximately $29,000. The Company will benefit from a reduction in the base rent rate, realizing savings of approximately $480,000 over the three year term, or approximately $160,000 when annualized.


XML 18 R8.htm IDEA: XBRL DOCUMENT  v2.3.0.11
SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES
6 Months Ended
Jun. 30, 2011
Significant Accounting Policies [Text Block]

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES


 

 

 

The condensed consolidated balance sheet as of June 30, 2011, the condensed consolidated statements of operations for the three and six-month periods ended June 30, 2011 and 2010, the condensed consolidated statements of cash flows for the six-month periods ended June 30, 2011 and 2010 and the condensed consolidated statement of shareholders’ equity for the six-month period ended June 30, 2011 have been prepared by the Company without audit. The condensed consolidated financial statements include the accounts of Wireless Telecom Group, Inc. and its wholly-owned subsidiaries Boonton Electronics Corporation, Microlab/FXR, Willtek Communications GmbH (“Willtek”), WTG Foreign Sales Corporation and NC Mahwah, Inc., collectively the “Company”. All significant intercompany transactions and balances have been eliminated in consolidation.

 

 

 

On May 7, 2010, the Company sold substantially all of the assets and liabilities of its foreign subsidiary, Willtek. Accordingly, the operating activities of Willtek for the three and six-months ended June 30, 2010 are included in the Company’s condensed consolidated statement of operations as discontinued operations (see Note 3).

 

 

 

In the opinion of management, the accompanying condensed consolidated financial statements referred to above contain all necessary adjustments, consisting of normal accruals and recurring entries, which are necessary to present fairly the Company’s results for the interim periods being presented.

 

 

 

The accounting policies followed by the Company are set forth in Note 1 to the Company’s financial statements included in its annual report on Form 10-K for the year ended December 31, 2010. Specific reference is made to that report since certain information and footnote disclosures normally included in financial statements in accordance with accounting principles generally accepted in the United States of America (US GAAP) have been condensed or omitted from this report.

 

 

 

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including inventory valuation, accounts receivable valuation, valuation of deferred tax assets, accrued warranty expense, estimated fair values of stock options and assets held for sale) and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of net revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

 

 

The results of operations for the three and six-month periods ended June 30, 2011 and 2010 are not necessarily indicative of the results to be expected for the full year.

 

 

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.

 

 

 

The Company maintains significant cash investments primarily with two financial institutions, which at times may exceed federally insured limits. The Company performs periodic evaluations of the relative credit rating of these institutions as part of its investment strategy.

 

 

 

Concentrations of credit risk with respect to accounts receivable are limited due to the Company’s large customer base. However, at June 30, 2011, primarily all of the Company’s receivables do pertain to the telecommunications industry.

 

 

 

The carrying amounts of cash and cash equivalents, trade receivables, other current assets and accounts payable approximate fair value due to the short-term nature of these instruments. At June 30, 2011, the fair value (estimated based upon expected cash outflows discounted at current market rates) and carrying value of the fixed rate mortgage payable amounted to $2,813,741 and $2,737,730, respectively.


 

 

 

 

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of bank and money market accounts.

 

 

 

The Company has evaluated subsequent events through the date the financial statements were issued and has determined that there were no subsequent events or transactions requiring recognition or disclosure in the condensed consolidated financial statements.

 

 

 

Certain prior period information has been reclassified to conform to the current period’s reporting presentation.

 

 


XML 19 R14.htm IDEA: XBRL DOCUMENT  v2.3.0.11
GOODWILL
6 Months Ended
Jun. 30, 2011
Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 7 - GOODWILL


 

 

 

 

 

The Company reviews the goodwill of its subsidiary, Microlab, for impairment whenever events or changes in circumstances indicate that the carrying amount of this asset may not be recoverable, and also reviews Microlab’s goodwill annually in accordance with Accounting Standards Codification (ASC) 350, “Accounting for Business Combinations, Goodwill, and Other Intangible Assets.” The process of evaluating the potential impairment of goodwill is ongoing, subjective and requires significant judgment and estimates regarding future cash flows and forecasts. Goodwill represents the excess of the cost of an acquisition over fair value of net assets acquired. Testing for the impairment of goodwill involves a two step process. The first step of the impairment test requires the comparing of a reporting unit’s fair value to its carrying value. If the carrying value is less than the fair value, no impairment exists and the second step is not performed. If the carrying value is higher than the fair value, there is an indication that impairment may exist and the second step must be performed to compute the amount of the impairment.

 

 

 

In the second step, the impairment is computed by estimating the fair value of all recognized and unrecognized assets and liabilities of the reporting unit and comparing the implied fair value of reporting unit goodwill with the carrying amount of that unit’s goodwill. As noted above, goodwill is attributable to one of the Company’s reporting units, Microlab.

 

 

 

In the fourth quarter of 2010, management performed their annual impairment test of goodwill which indicated that Microlab’s fair value was significantly in excess of its carrying value, therefore, there was no impairment recorded at December 31, 2010.

 

 


XML 20 R15.htm IDEA: XBRL DOCUMENT  v2.3.0.11
ACCOUNTING FOR STOCK BASED COMPENSATION
6 Months Ended
Jun. 30, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 8 - ACCOUNTING FOR STOCK BASED COMPENSATION


 

 

 

The Company follows the provisions of ASC 718, “Share-Based Payment.” The Company’s results for the three and six-month periods ended June 30, 2011 include share-based compensation expense totaling $34,903 and $56,304, respectively. Results for the three and six-month periods ended June 30, 2010 include share-based compensation expense of $50,091 and $100,182, respectively. Such amounts have been included in the Condensed Consolidated Statements of Operations within operating expenses.

 

 

 

Stock option compensation expense relative to service-based options is the estimated fair value of options granted, amortized on a straight-line basis over the requisite service period. Stock option compensation expense relating to performance-based options is the estimated fair value of options granted, recognized when stated performance targets are achieved, or expected to be achieved.

 

 

 

The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. For all performance-based options granted, the Company took into consideration guidance under ASC 718 and SEC Staff Accounting Bulletin No. 107 (SAB 107) when reviewing and updating assumptions. The expected option life is derived from assumed exercise rates based upon historical exercise patterns and represents the period of time that options granted are expected to be outstanding. The expected volatility is based upon historical volatility of our shares using weekly price observations over an observation period that approximates the expected life of the options. The risk-free rate is based on the U.S. Treasury yield curve rate in effect at the time of grant for periods similar to the expected option life. The estimated forfeiture rate included in the option valuation was zero.

 

 

 

The Company did not grant stock options during the three or six-months ended June 30, 2011. However, during the three months ended June 30, 2010, the Company entered into a stock option agreement dated as of April 15, 2010, pursuant to which an employee of the Company was awarded options to purchase up to 300,000 shares of the Company’s common stock at an exercise price of $0.96 per share, representing a 5% premium over the average closing bid and asked prices of the Company’s common stock for the five trading days previous to the date of grant. The options are performance-based and are subject to the same performance criteria as those granted to the Company’s Chief Executive Officer in 2009.


 

 

 

 

 

During the three-months ended June 30, 2011, the Company adjusted its outstanding stock options by 100,000 shares due to expiration. Additionally, during the three-months ended June 30, 2010, the Company adjusted its outstanding stock options by 301,300 shares due to expiration. At June 30, 2011, the total number of stock option shares outstanding, which includes both service-based and performance-based options, was 2,413,667.

 

 

 

The following table represents our service-based stock options granted, exercised, forfeited and canceled during the first six months of 2011:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

Weighted
Average
Exercise
Price per share

 

Weighted
Average
Remaining
Contractual
Term

 

Aggregate
Intrinsic
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

Service-based Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at January 1, 2011

 

 

 

1,143,667

 

 

 

$

2.60

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canceled/Expired

 

 

 

(70,000

)

 

 

$

2.46

 

 

 

 

 

 

 

 

 

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at June 30, 2011

 

 

 

1,073,667

 

 

 

$

2.61

 

 

 

 

3.2

 

 

 

-

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at June 30, 2011

 

 

 

1,013,667

 

 

 

$

2.59

 

 

 

 

3.0

 

 

 

-

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

The following table represents our performance-based stock options granted, exercised, forfeited and canceled during the first six months of 2011:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

Weighted
Average
Exercise
Price per share

 

Weighted
Average
Remaining
Contractual
Term

 

Aggregate
Intrinsic
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance-based Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at January 1, 2011

 

 

 

1,370,000

 

 

 

$

0.92

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canceled/Expired

 

 

 

(30,000

)

 

 

$

0.78

 

 

 

 

 

 

 

 

 

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at June 30, 2011

 

 

 

1,340,000

 

 

 

$

0.92

 

 

 

 

8.6

 

 

 

-

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at June 30, 2011

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

As of June 30, 2011, the unearned compensation related to Company granted service-based incentive stock options is $26,002 which will continue to be amortized on a straight-line basis through the end of 2011. The fair value, and unamortized amount, of performance-based options granted by the Company as of June 30, 2011 is $836,959. This unearned compensation will not be recognized until management considers the respective performance conditions to be achievable.

 

 

 

On June 8, 2010, the Company issued 40,000 shares of restricted common stock to select members of its board of directors. The shares were granted at the June 8, 2010 closing market price of $0.84 per share and vested on June 14, 2011, the date of the Company’s annual shareholders meeting, or a vesting period of approximately one year. The total compensation expense recognized over the vesting period was $33,600.

 

 

 

On March 22, 2011, the Company awarded 50,000 shares of restricted common stock to its Chief Executive Officer. The shares were granted at the March 22, 2011 closing market price of $1.08 per share and will fully vest on the one-year anniversary from date of grant. The total compensation expense to be recognized over the vesting period is $54,000 which will be amortized on a straight-line basis.


 

 

 

 

 

On June 14, 2011, the Company issued 40,000 shares of restricted common stock to select members of its board of directors. The shares were granted at the June 14, 2011 closing market price of $0.78 per share and will vest on the date of the Company’s next annual shareholders meeting, a vesting period of approximately one year. The total compensation expense to be recognized over the vesting period is $31,200 which will be amortized on a straight-line basis.

 

 

 

A summary of the status of the Company’s non-vested restricted common stock as of June 30, 2011, and changes during the six-months ended June 30, 2011 are presented below:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-vested Shares

 

 

Number of Shares

 

Weighted Average
Grant Date
Fair Value

 

 

 

 

 

 

 

 

 

 

Non-vested at January 1, 2011

 

 

40,000

 

 

 

$

0.84

 

 

 

Granted

 

 

90,000

 

 

 

$

0.95

 

 

 

Vested

 

 

(40,000

)

 

 

($

0.84

)

 

 

 

 

 

 

 

 

 

   

 

 

 

Non-vested at June 30, 2011

 

 

90,000

 

 

 

$

0.95

 

 

 

 

 

 

 

 

 

 

   

 

 


 

 

 

As of June 30, 2011, the unearned compensation related to Company granted restricted stock is $71,700 which will continue to be amortized through June 30, 2012.

 

 


XML 21 R13.htm IDEA: XBRL DOCUMENT  v2.3.0.11
INVENTORIES
6 Months Ended
Jun. 30, 2011
Inventory Disclosure [Text Block]

NOTE 6 – INVENTORIES


 

 

 

Inventory carrying value is net of inventory reserves of $521,032 and $452,310 at June 30, 2011 and December 31, 2010, respectively.


 

 

 

 

 

 

 

 

Inventories consist of:

 

June 30,
2011

 

December 31,
2010

 

 

 

 

 

 

 

 

 

 

 

 

 

Raw materials

 

 

$4,807,434

 

 

$4,632,195

 

Work-in-process

 

 

1,166,552

 

 

830,684

 

Finished goods

 

 

1,502,424

 

 

1,472,293

 

 

 

 

 

 

 

 

 

 

 

 

$7,476,410

 

 

$6,935,172

 

 

 

 

 

 

 

 

XML 22 R6.htm IDEA: XBRL DOCUMENT  v2.3.0.11
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals)
6 Months Ended
Jun. 30, 2011
Acquisition of treasury stock, shares 701,417
XML 23 R9.htm IDEA: XBRL DOCUMENT  v2.3.0.11
RECENT ACCOUNTING PRONOUNCEMENTS
6 Months Ended
Jun. 30, 2011
Accounting Changes and Error Corrections [Text Block]

NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS


 

 

 

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-05, “Presentation of Comprehensive Income.” This update eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and requires all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires an entity to present reclassification adjustments on the face of the financial statements from other comprehensive income to net income. This ASU is effective for the Company beginning January 1, 2012. The Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements.

 

 

 

In May 2011, the FASB issued ASU 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This standard amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This ASU is effective for financial periods beginning after December 15, 2011 and is to be applied prospectively. The Company does not expect this guidance to have a material impact on its condensed consolidated financial statements.

 

 

 

In December 2010, the FASB issued ASU 2010-28, “When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts” (amendments to FASB ASC Topic 350, Intangibles, Goodwill and Other). The objective of this ASU is to address diversity in practice in the application of goodwill impairment testing by entities with reporting units with zero or negative carrying amounts, eliminating an entity’s ability to assert that a reporting unit is not required to perform Step 2 because the carrying amount of the reporting unit is zero or negative despite the existence of qualitative factors that indicate the goodwill is more likely than not impaired. This ASU is effective for interim periods after January 1, 2011. The Company’s adoption of this ASU did not have a material impact on its condensed consolidated financial statements.


XML 24 R10.htm IDEA: XBRL DOCUMENT  v2.3.0.11
DISCONTINUED OPERATIONS
6 Months Ended
Jun. 30, 2011
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE 3 – DISCONTINUED OPERATIONS


 

 

 

As mentioned in Note 1, the operating activities of Willtek for the three and six-months ended June 30, 2010 are included in the Company’s condensed consolidated statement of operations as discontinued operations. The following table summarizes the components of discontinued operations for the three and six-months ended June 30, 2010:


 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30, 2010

 

Six Months Ended
June 30, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

$

1,533,173

 

 

$

6,642,152

 

Gross profit

 

 

 

403,038

 

 

 

2,609,331

 

(Loss) from discontinued operations before taxes

 

 

 

(638,543

)

 

 

(1,313,032

)

(Benefit) for income taxes

 

 

 

(985

)

 

 

(744

)

(Loss) from discontinued operations

 

 

 

(637,558

)

 

 

(1,312,288

)

Gain (loss) on sale of discontinued operations

 

 

 

179,065

 

 

 

(430,565

)

 

 

 

   

 

 

   

 

Net (loss) from discontinued operations

 

 

$

(458,493

)

 

$

(1,742,853

)

 

 

 

   

 

 

   

 

 

 

 

 

 

 

 

 

 

 

Cash flows from discontinued operations for the six-months ended June 30, 2010 are combined with the cash flows from operations within each of the three categories presented below. Cash flows from discontinued operations for the six-months ended June 30, 2010 are as follows:


 

 

 

 

 

 

 

 

Six Months Ended
June 30, 2010

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

$

(321,147)

 

Cash flows from investing activities

 

 

$

(3,136)

 

Cash flows from financing activities

 

 

$

-

 


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INCOME TAXES
6 Months Ended
Jun. 30, 2011
Income Tax Disclosure [Text Block]

NOTE 4 – INCOME TAXES


 

 

 

 

 

The Company records deferred taxes in accordance with ASC 740, “Accounting for Income Taxes”. This ASC requires recognition of deferred tax assets and liabilities for temporary differences between tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The Company periodically assesses the value of its deferred tax asset and determines the necessity for a valuation allowance. The Company evaluates which portion, if any, will more likely than not be realized by offsetting future taxable income, taking into consideration any limitations that may exist on its use of its net operating loss carry-forwards.

 

 

 

The components of deferred income taxes are as follows:


 

 

 

 

 

 

 

 

 

 

June 30,
2011

 

December 31,
2010

 

 

 

 

 

 

 

Deferred tax assets:

 

 

 

 

 

 

 

Uniform capitalization of inventory costs for tax purposes

 

 

$     197,897

 

 

$    185,024

 

Allowances for doubtful accounts

 

 

36,943

 

 

29,528

 

Accruals

 

 

60,000

 

 

242,663

 

Tax effect of goodwill

 

 

(167,580

)

 

(116,228

)

Book depreciation over tax

 

 

33,076

 

 

23,494

 

Net operating loss carryforward

 

 

18,423,732

 

 

18,709,159

 

 

 

 

 

 

 

 

 

 

 

 

18,584,068

 

 

19,073,640

 

Valuation allowance for deferred tax assets

 

 

(12,532,068

)

 

(13,380,250

)

 

 

 

 

 

 

 

 

 

 

 

$ 6,052,000

 

 

$5,693,390

 

 

 

 

 

 

 

 

 


 

 

 

 

 

Under ASC 740, the Company must recognize the tax benefit from an uncertain position only if it is more-likely-than-not the tax position will be sustained on examination by the taxing authority, based on the technical merits of the position. The tax benefits recognized in the financial statements attributable to such position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon the ultimate resolution of the position.

 

 

 

By adoption of ASC 740, the Company has analyzed its filing positions in all of the federal, state and foreign jurisdictions where it is required to file income tax returns. As of June 30, 2011, the Company has identified its federal tax return, its state tax return in New Jersey and its foreign return in Germany as “major” tax jurisdictions, as defined, in which it is required to file income tax returns. Based on the evaluations noted above, the Company has concluded that there are no significant uncertain tax positions requiring recognition or disclosure in its condensed consolidated financial statements.

 

 

 

Based on a review of tax positions for all open years and contingencies as set out in the Company’s notes to the condensed consolidated financial statements, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740 during the periods ended June 30, 2011 and 2010.

 

 


XML 28 R5.htm IDEA: XBRL DOCUMENT  v2.3.0.11
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
6 Months Ended
Jun. 30, 2011
Jun. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income (loss) $ 886,714 $ (1,124,320)
Adjustments to reconcile net income (loss) to net cash (used for) operating activities:    
Depreciation and amortization 249,755 366,258
Loss on sale of discontinued operations   430,565
Stock compensation expense 56,304 100,182
Deferred income taxes (358,610) (134,936)
Provision for (recovery of) losses on accounts receivable 18,538 (93,630)
Changes in assets and liabilities:    
Accounts receivable 45,072 (526,839)
Inventories (541,238) (814,734)
Prepaid expenses and other assets 67,277 34,653
Accounts payable, accrued expenses and other current liabilities (936,241) (1,949,284)
Net cash (used for) operating activities (512,429) (3,712,085)
CASH FLOWS FROM INVESTING ACTIVITIES    
Capital expenditures (213,925) (120,690)
Proceeds from disposition of Willtek assets - net   2,749,975
Net cash provided by (used for) investing activities (213,925) 2,629,285
CASH FLOWS FROM FINANCING ACTIVITIES    
Payments of mortgage note (33,529) (31,096)
Payment of bank note   (1,475,149)
Acquisition of treasury stock - 701,417 shares (464,563)  
Net cash (used for) financing activities (498,092) (1,506,245)
Effect of foreign currency on cash and cash equivalents   (149,862)
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (1,224,446) (2,738,907)
Cash and cash equivalents, at beginning of period 13,643,220 14,076,382
CASH AND CASH EQUIVALENTS, AT END OF PERIOD 12,418,774 11,337,475
SUPPLEMENTAL INFORMATION:    
Taxes 103,470 278,891
Interest $ 104,238 $ 133,229
XML 29 R7.htm IDEA: XBRL DOCUMENT  v2.3.0.11
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (USD $)
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Treasury Stock [Member]
Balance at Dec. 31, 2010 $ 31,744,101 $ 287,539 $ 37,746,005 $ 1,257,371 $ (7,546,814)
Net income 886,714     886,714  
Shares issued under restricted stock plan   1,300 (1,300)    
Stock compensation expense 56,304   56,304    
Repurchase of treasury stock (464,563)       (464,563)
Balance at Jun. 30, 2011 $ 32,222,556 $ 288,839 $ 37,801,009 $ 2,144,085 $ (8,011,377)
XML 30 R16.htm IDEA: XBRL DOCUMENT  v2.3.0.11
SEGMENT INFORMATION: REGIONAL SALES
6 Months Ended
Jun. 30, 2011
Segment Reporting Disclosure [Text Block]

NOTE 9 – SEGMENT INFORMATION: REGIONAL SALES


 

 

 

 

 

The Company, in accordance with ASC 280, “Disclosures about Segments of an Enterprise and Related Information”, has disclosed the following segment information:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months
Ended June 30,

 

For the Six Months
Ended June 30,

 

Revenues by region

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

4,865,322

 

$

4,462,514

 

$

8,927,285

 

$

8,687,911

 

Europe, Middle East, Africa (EMEA)

 

 

1,111,409

 

 

1,055,734

 

 

2,659,675

 

 

2,463,835

 

Asia Pacific (APAC)

 

 

496,025

 

 

562,356

 

 

962,751

 

 

1,066,200

 

 

 

   

 

   

 

   

 

   

 

Total Revenues

 

$

6,472,756

 

$

6,080,604

 

$

12,549,711

 

$

12,217,946

 

 

 

   

 

   

 

   

 

   

 


 

 

 

Net sales are attributable to a geographic area based on the destination of the product shipment. The majority of shipments in the Americas are to customers located within the United States. Although shipments to the EMEA region were not significantly concentrated in one country, shipments to the APAC region were largely concentrated in China.

 

 

 

Due to the significant concentration of shipments to both the United States and China, the following table discloses the revenue attributable to these two countries:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months
Ended June 30,

 

For the Six Months
Ended June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

4,557,492

 

$

4,317,230

 

$

8,376,819

 

$

8,125,248

 

China

 

 

240,524

 

 

281,549

 

 

458,150

 

 

527,444

 


XML 31 R2.htm IDEA: XBRL DOCUMENT  v2.3.0.11
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
Jun. 30, 2011
Dec. 31, 2010
- ASSETS -    
Cash and cash equivalents $ 12,418,774 $ 13,643,220
Accounts receivable - net of allowance for doubtful accounts of $92,357 and $73,819 for 2011 and 2010, respectively 4,240,110 4,303,720
Inventories 7,476,410 6,935,172
Deferred income taxes - current 294,841 457,215
Prepaid expenses and other current assets 401,399 465,798
TOTAL CURRENT ASSETS 24,831,534 25,805,125
PROPERTY, PLANT AND EQUIPMENT - NET 4,297,860 4,333,690
OTHER ASSETS:    
Goodwill 1,351,392 1,351,392
Deferred income taxes - non-current 5,757,159 5,236,175
Other assets 889,555 892,433
TOTAL OTHER ASSETS 7,998,106 7,480,000
TOTAL ASSETS 37,127,500 37,618,815
- LIABILITIES AND SHAREHOLDERS’ EQUITY -    
Accounts payable 1,265,295 743,398
Accrued expenses and other current liabilities 901,919 2,360,057
Current portion of mortgage payable 70,972 68,347
TOTAL CURRENT LIABILITIES 2,238,186 3,171,802
LONG TERM LIABILITIES:    
Mortgage payable 2,666,758 2,702,912
COMMITMENTS AND CONTINGENCIES    
SHAREHOLDERS’ EQUITY:    
Preferred stock, $.01 par value, 2,000,000 shares authorized, none issued 0 0
Common stock, $.01 par value, 75,000,000 shares authorized, 28,883,861 and 28,753,861 shares issued, respectively, 25,086,786 and 25,658,203 shares outstanding, respectively 288,839 287,539
Additional paid-in-capital 37,801,009 37,746,005
Retained earnings 2,144,085 1,257,371
Treasury stock at cost, 3,797,075 and 3,095,658 shares, respectively (8,011,377) (7,546,814)
TOTAL SHAREHOLDERS’ EQUITY 32,222,556 31,744,101
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 37,127,500 $ 37,618,815
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