UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 OR 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended June 30,December 31, 1995
Commission file number 0-10976
MICROWAVE FILTER COMPANY, INC.
(Exact name of registrant as specified in its charter.)
New York 16-0928443
(State of Incorporation) (I.R.S. Employer Identification
Number)
6743 Kinne Street, East Syracuse, N.Y. 13057
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (315) 437-3953
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES ( x ) NO ( )
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Common Stock, $.10 Par Value - 3,319,8153,326,779 shares as of June
30,December
31, 1995.
PART I. - FINANCIAL INFORMATION
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS
AND NINE MONTHS
ENDED JUNE 30,DECEMBER 31, 1995 AND 1994
(Unaudited)
(Amounts in thousands, except per share data)
Three months ended
Nine months ended
June 30 June 30
1995 1994Dec. 31
1995 1994
[S] [C] [C]
[C] [C]
Net sales $1,860 $2,105 $5,852 $6,174$2,091 $1,964
Cost of goods sold 1,215 1,356 3,925 3,784
------- -------1,253 1,293
------- -------
Gross profit 645 749 1,927 2,390838 671
Selling, general and
administrative expenses 673 731 2,060 2,287
------- -------646 651
------- -------
Income (loss) from
operations (28) 18 (133) 103192 20
Other income (expense) (3) (2) (6) (8)
------- -------1 (4)
------- -------
Income (loss) before
income taxes (31)193 16 (139) 95
Provision (benefit)
for income taxes (11) 6 (48) 33
------- -------67 5
------- -------
NET INCOME (LOSS) (20) 10 (91) 62
======= =======126 11
======= =======
Earnings (loss) per share ($0.01)$0.04 $0.00 ($0.03) $0.02
======= =======
======= =======
[FN]
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30,DECEMBER 31, 1995 SEPTEMBER 30, 19941995
(Unaudited)
[S] [C] [C]
Assets
Current Assets:
Cash and cash equivalents $ 472962 $ 657521
Accounts receivable-trade,net 670 1,077
Federal and state income tax
receivable 62 -771 879
Inventories 1,982 1,6301,839 1,969
Prepaid expenses and other
current assets 221 170215 215
-------- --------
Total current assets 3,407 3,5343,787 3,584
Property,plant and equipment,net 1,689 1,8501,568 1,625
Other assets 87 13961 65
-------- --------
Total assets $ 5,1835,416 $ 5,5235,274
======== ========
Liabilities And Stockholders' Equity
Current liabilities:
Current portion of long term
debt $ 145148 $ 142147
Accounts payable 339 455354 362
Customer deposits 189 128302 282
Accrued federal and state
income taxes - 598 43
Accrued payroll and related
expenses 93 11071 91
Accrued compensated absences 221 192
Accrued legal costs 134 111195 183
Other current liabilities 32 9574 83
-------- --------
Total current liabilities 1,153 1,2381,242 1,191
-------- --------
Long term debt, less current
portion 477 583403 440
Deferred compensation and
other liabilities 84 8858 59
-------- --------
Total liabilities 1,714 1,9091,703 1,690
-------- --------
Stockholders' Equity:
Common stock,$.10 par value 401 400 376
Additional paid-in capital 2,877 2,6372,884 2,881
Retained earnings 829 1,1411,065 940
-------- --------
4,106 4,1544,350 4,221
Common stock in treasury,
at cost (637) (540)(637)
-------- --------
Total stockholders' equity 3,469 3,6143,713 3,584
-------- --------
Total liabilities and
stockholders' equity $ 5,1835,416 $ 5,5235,274
======== ========
[FN]
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND NINE MONTHS ENDED
JUNE 30,DECEMBER 31, 1995 AND 1994
(Unaudited)
Three months ended
Nine months ended
June 30 June 30December 31
1995 1994
1995 1994
[S] [C] [C] [C] [C]
Cash flows from operating
activities:
Net income $ (20)126 $ 10 $ (91) $ 6211
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and amortization 100 96 298 329
Stock compensation 0 0 31 2985 98
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable 315 (28) 346 (36)108 (78)
Inventories (206) (142) (352) (320)129 (282)
Prepaid expenses & other
assets 17 62 (29) 13(3) (21)
Increase (decrease) in:
Accounts payable & accrued
expenses (102) 56 (86) 19350 99
Deferred compensation &
other liabilities (1) (1) (3) (3)
------- -------
------- -------
Net cash provided by
operating activities 103 53 114 267
------- -------494 (174)
------- -------
Cash flows from investing activities:
Capital expenditures (19) (67) (107) (214)(21) (23)
Cash flows from financing activities:
Proceeds from long-term
borrowings 0 500 0 500
Principal payments on
long-term debt (38) (18) (107) (33)(36) (32)
Proceeds from sale of
common stock 7 4 13 123
Purchase of treasury
stock 0 0 (97) 0
------- -------
------- -------
Increase (decrease) in cash
and cash equivalents 53 472 (184) 532441 (323)
Cash and cash equivalents
at beginning of period 419 150 656 90
------- -------521 657
------- -------
Cash and cash equivalents
at end of period $ 472962 $ 622 $ 472 $ 622
======= =======334
======= =======
[FN]
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,DECEMBER 31, 1995
Note 1. Summary of Significant Accounting Policies
The accompanying financial statements, which should be read in conjunction
with the financial statements of Microwave Filter Company, Inc. ("the
Company") included in the 19941995 Annual Report filed on Form 10-K, are
unaudited but have been prepared in the ordinary course of business for
the purpose of providing information with respect to the interim period.
The Company believes that all adjustments (none of which were other than
normal recurring accruals) necessary for a fair presentation for such
periods have been included.
Note 2. Earnings (loss) per share
Earnings (loss) per common share are calculated based upon the weighted
average number of shares of common stock outstanding during the periods
including, when significant, any common stock equivalents and after
restatement of any stock dividends. The weighted average number of shares
used for the computations were 3,309,790 for the nine months3,324,564 and 3,347,9243,302,491 for the three months
ending June 30,December 31, 1995 and 3,335,767 for the nine months
and 3,356,739 for the three months ending June 30, 1994.December 31, 1994, respectively.
Note 3. Inventories
Inventories are stated at the lower of cost determined on the first-in,
first-out method or market.
Inventories consisted of the following:
June 30,December 31, September 30,
1995 19941995
Raw materials and stock parts $ 1,033957 $ 9161,107
Work-in-process 407 335386 394
Finished goods 542 379496 468
------- -------
$ 1,9821,839 $ 1,6301,969
======= =======
MICROWAVE FILTER COMPANY, INC.
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
JUNE 30,DECEMBER 31, 1995
Micowave Filter Company, Inc. achieved record first quarter sales of
$2,091,015 during the first quarter of fiscal 1996 which ended December
31, 1995.
Net sales decreased $244,273increased $127,298 or 11.6%6.5% to $1,860,409$2,091,015 during the three
months ended June 30,December 31, 1995 when compared to net sales of $2,104,682$1,963,717 during
the same period last year.
The decrease in sales can primarily be attributedNet income increased $115,614 or 1,087% to a decrease in the sales
of the Company's Wireless Cable products. The Company has experienced a
slowdown in Wireless Cable product orders over the last few months. Although
the Company believes that market demand will grow, the timing is unknown at
this time. The Company plans to continue aggressively marketing these products
and to continue developing new products for this market.
Net sales decreased $321,955 or 5.2% to $5,852,136$126,253 during the ninethree
months ended June 30,December 31, 1995 when compared to net salesincome of $6,174,091$10,639
during the same period last year.
As a resultpercentage of sales, gross profit increased $166,892 to 40.1% during
the decrease in Wireless Cable product orders, the Company's
sales order backlog decreased to $1,759,072 at June 30,three months ended December 31, 1995 when compared to $2,040,319 at March 31, 1995 and $1,822,611 at September 30, 1994.
The Company recorded a net loss of $90,996 for the nine months ended June
30, 1995 compared to a net profit of $61,886 for34.2% during
the same period last year.
The decrease in net income can primarily be attributed to the decrease in
sales.
Selling, general and administrative expenses decreased $227,462 or 9.9%
to $2,059,868 during the nine months ended June 30, 1995 when compared to
$2,287,330 during the same period last year primarily as a result of the
Company's cost reduction efforts during fiscal 1995.
As a percentage of sales, selling, general and administrative expenses
decreased to 35.2%30.9% during the ninethree months ended June 30,December 31, 1995 when
compared to 37.0%33.2% during the same period last year.
The increase in profits can be attributed to the increase in sales,
improved margins and a decrease in operating expenses when compared
to the same period last year.
Your Company's primary objective continues to be new product development
and an aggressive marketing plan to maximize performance and shareholder
value.
Cash and cash equivalents decreased $184,299increased $441,379 to $472,262$962,055 at June 30,December 31,
1995 when compared to September 30, 1994.1995. The decreaseincrease was a result of
$113,797$494,310 in net cash provided by operating activities, $106,997$20,630 in net cash
used for capital expenditures and $191,099$32,301 in net cash used in financing
activities.
At June 30,December 31, 1995, the Company had available aggregate lines of credit
totaling $600,000. In addition, the Company has a Letter of Credit facility
available, for up to $500,000, which will be secured by specified inventory
being purchased. At June 30,December 31, 1995, the Company had $60,319 in letters of
credit outstanding.
Management believes that its working capital requirements for the forseeable
future will be met by its existing cash balances, future cash flows and its
current credit arrangements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is unaware of any material threatened or pending
litigation against the company.
Item 2. Changes in Securities
None during this reporting period.
Item 3. Defaults Upon Senior Securities
The Company has no senior securities.
Item 4. Submission of Matters to a Vote of Security Holders
None during this reporting period.
Item 6. Exhibits and Reports on Form 8-K
None.
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MICROWAVE FILTER COMPANY, INC.
August 14, 1995January 15, 1996 Carl F. Fahrenkrug
(Date) --------------------------
Carl F. Fahrenkrug
Chief Executive Officer
August 14, 1995January 15, 1996 Richard L. Jones
(Date) --------------------------
Richard L. Jones
Chief Financial Officer