Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | MICROWAVE FILTER CO INC /NY/ | |
Entity Central Index Key | 716,688 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,579,928 | |
Trading Symbol | MFCO | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 844,688 | $ 923,117 |
Accounts receivable-trade, net of allowance for doubtful accounts of $4,000 and $4,000 | 247,966 | 346,633 |
Inventories, net | 441,960 | 448,747 |
Prepaid expenses and other current assets | 55,943 | 61,673 |
Total current assets | 1,590,557 | 1,780,170 |
Property, plant and equipment, net | 365,086 | 351,931 |
Total assets | 1,955,643 | 2,132,101 |
Current liabilities: | ||
Accounts payable | 73,051 | 61,770 |
Customer deposits | 4,926 | 28,818 |
Accrued payroll and related expenses | 63,605 | 43,646 |
Accrued compensated absences | 124,588 | 144,942 |
Notes payable - short term | 47,718 | 46,652 |
Other current liabilities | 20,183 | 16,274 |
Total current liabilities | 334,071 | 342,102 |
Notes payable - long term | 294,809 | 318,998 |
Total other liabilities | 294,809 | 318,998 |
Total liabilities | 628,880 | 661,100 |
Stockholders' Equity: | ||
Common stock, $.10 par value Authorized 5,000,000 shares, Issued 4,324,140 shares in 2017 and 2016, Outstanding 2,579,928 shares in 2017 and 2,581,007 in 2016 | 432,414 | 432,414 |
Additional paid-in capital | 3,248,706 | 3,248,706 |
Accumulated deficit | (659,745) | (516,169) |
Common stock in treasury, at cost 1,744,212 shares in 2017 and 1,743,133 shares in 2016 | (1,694,612) | (1,693,950) |
Total stockholders' equity | 1,326,763 | 1,471,001 |
Total liabilities and stockholders' equity | $ 1,955,643 | $ 2,132,101 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 4,000 | $ 4,000 |
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, shares, issued | 4,324,140 | 4,324,140 |
Common stock, shares, outstanding | 2,579,928 | 2,581,007 |
Treasury stock, shares | 1,744,212 | 1,743,133 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 825,176 | $ 1,105,853 | $ 1,604,550 | $ 1,873,400 |
Cost of goods sold | 552,466 | 653,651 | 1,082,739 | 1,162,393 |
Gross profit | 272,710 | 452,202 | 521,811 | 711,007 |
Selling, general and administrative expenses | 320,872 | 352,357 | 659,623 | 711,521 |
(Loss) income from operations | (48,162) | 99,845 | (137,812) | (514) |
Other expense, net | (2,215) | (3,092) | (5,764) | (6,084) |
(Loss) income before income taxes | (50,377) | 96,753 | (143,576) | (6,598) |
Benefit for income taxes | 3,000 | 3,000 | ||
Net (loss) income | $ (50,377) | $ 99,753 | $ (143,576) | $ (3,598) |
Per share data: | ||||
Basic and diluted earnings (loss) per common share | $ (0.02) | $ 0.04 | $ (0.06) | $ 0 |
Shares used in computing net earnings (loss) per common share: | ||||
Basic and diluted | 2,580,434 | 2,581,224 | 2,580,724 | 2,581,330 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (143,576) | $ (3,598) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation | 39,590 | 47,059 |
Change in operating assets and liabilities: | ||
Accounts receivable-trade | 98,667 | (138,652) |
Inventories | 6,787 | 65,697 |
Prepaid expenses and other assets | 5,730 | (9,312) |
Accounts payable and customer deposits | (12,611) | 52,279 |
Accrued payroll and related expenses and compensated absences | (395) | 22,964 |
Other current liabilities | 3,909 | (4,538) |
Net cash (used in) provided by operating activities | (1,899) | 31,899 |
Cash flows from investing activities: | ||
Property, plant and equipment purchased | (52,745) | (1,229) |
Net cash used in investing activities | (52,745) | (1,229) |
Cash flows from financing activities: | ||
Repayment of note payable | (23,123) | (22,057) |
Purchase of treasury stock | (662) | (235) |
Net cash used in financing activities | (23,785) | (22,292) |
(Decrease) increase in cash and cash equivalents | (78,429) | 8,378 |
Cash and cash equivalents at beginning of period | 923,117 | 896,667 |
Cash and cash equivalents at end of period | 844,688 | 905,045 |
Supplemental Schedule of Cash Flow Information: | ||
Interest paid | $ 8,059 | $ 9,125 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies In these notes, the terms “MFC” and “Company” mean Microwave Filter Company, Inc. and its subsidiary companies. The following condensed balance sheet as of September 30, 2016, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the company believes that the disclosures made are adequate to make the information not misleading. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The operating results for the six month period ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ended September 30, 2017. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10K for the year ended September 30, 2016. |
Industry Segment Data
Industry Segment Data | 6 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Industry Segment Data | Note 2. Industry Segment Data The Company’s primary business segment involves the operations of Microwave Filter Company, Inc. which designs, develops, manufactures and sells electronic filters, both for radio and microwave frequencies, to help process signal distribution and to prevent unwanted signals from disrupting transmit or receive operations. Markets served include cable television, television and radio broadcast, satellite broadcast, mobile radio, commercial communications and defense electronics. |
Inventories
Inventories | 6 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3. Inventories Inventories are stated at the lower of cost determined on the first-in, first-out method or market. Inventories net of the reserve for obsolescence consisted of the following: March 31, 2017 September 30, 2016 Raw materials and stock parts $ 347,565 $ 324,749 Work-in-process 28,664 54,716 Finished goods 65,731 69,282 $ 441,960 $ 448,747 The Company’s reserve for obsolescence equaled $435,528 at March 31, 2017 and September 30, 2016. The Company provides for a valuation reserve for certain inventory that is deemed to be obsolete, of excess quantity or otherwise impaired. |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 4. Income Taxes The Company accounts for income taxes under FASB ASC 740-10. Deferred tax assets and liabilities are based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates which are anticipated to be in effect when these differences reverse. The deferred tax provision is the result of the net change in the deferred tax assets and liabilities. A valuation allowance is established when it is necessary to reduce deferred tax assets to amounts expected to be realized. The Company has provided a full valuation allowance against its net deferred tax assets. FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax position taken or expected to be taken on a tax return. Additionally, it provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company determined it has no uncertain tax positions and therefore no amounts are recorded. |
Legal Matters
Legal Matters | 6 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | Note 5. Legal Matters None. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 6. Fair Value of Financial Instruments The carrying values of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of those instruments. The Company currently does not trade in or utilize derivative financial instruments. |
Significant Customers
Significant Customers | 6 Months Ended |
Mar. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Significant Customers | Note 7. Significant Customers Sales to one Original Equipment Manufacturer (“OEM”) customer represented approximately 44% of total sales for the six months ended March 31, 2017 and approximately 31% of total sales for the six months ended March 31, 2016. This one customer represented approximately 28%, 33% and 25% of total sales for the fiscal years ending September 30, 2016, 2015 and 2014, respectively. These sales are in connection with a multiyear program in which the Company is a subcontractor. A loss of this customer or programs related to this customer could materially impact the Company. |
Notes Payable
Notes Payable | 6 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 8. Notes Payable On July 2, 2013, Microwave Filter Company, Inc. (the “Company”) entered into a Ten Year Term Loan with KeyBank National Association in the amount of Five Hundred Thousand and No/100 Dollars ($500,000.00). The amount of all advances outstanding together with accrued interest thereon shall be due and payable on July 2, 2023 (“Maturity”). The Company shall pay interest on the outstanding principal balance of this Note at the rate per annum equal to 4.5%. The net proceeds from the Term Loan will be available to provide working capital as needed. The total amount outstanding as of March 31, 2017 and September 30, 2016 was $342,527 and $365,650 respectively. Interest accrued as of March 31, 2017 and September 30, 2016 was $1,239 and $1,280, respectively. The Company has secured this Note by: (a) a Mortgage, Assignment of Rents, Security Agreement and Fixture Filing which creates a 1 st |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Mar. 31, 2017 | |
Per share data: | |
Earnings Per Share | Note 9. Earnings Per Share The Company presents basic earnings per share (“EPS”), computed based on the weighted average number of common shares outstanding for the period, and when applicable diluted EPS, which gives the effect to all dilutive potential shares outstanding (i.e. options) during the period after restatement for any stock dividends. There were no dividends declared during the quarters ended March 31, 2017 and 2016. Income (loss) used in the EPS calculation is net income (loss) for each period. There were no dilutive potential shares outstanding for the periods ending March 31, 2017 and 2016. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Mar. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 10. Recent Accounting Pronouncements Update 2015-11- Inventory (Topic 330): Simplifying the Measurement of Inventory, |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories Net of Reserve for Obsolescence | Inventories net of the reserve for obsolescence consisted of the following: March 31, 2017 September 30, 2016 Raw materials and stock parts $ 347,565 $ 324,749 Work-in-process 28,664 54,716 Finished goods 65,731 69,282 $ 441,960 $ 448,747 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 |
Inventory Disclosure [Abstract] | ||
Reserve for obsolescence | $ 435,528 | $ 435,528 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories Net of Reserve for Obsolescence (Details) - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials and stock parts | $ 347,565 | $ 324,749 |
Work-in-process | 28,664 | 54,716 |
Finished goods | 65,731 | 69,282 |
Inventory net | $ 441,960 | $ 448,747 |
Significant Customers (Details
Significant Customers (Details Narrative) | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Original Equipment Manufacturer Customer [Member] | |||||
Percentage of sales | 44.00% | 31.00% | |||
One Customer [Member] | |||||
Percentage of sales | 28.00% | 33.00% | 25.00% |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Jul. 02, 2013 | Mar. 31, 2017 | Sep. 30, 2016 |
Outstanding total amount | $ 342,527 | $ 365,650 | |
Interest accrued | $ 1,239 | $ 1,280 | |
Key Bank National Association [Member] | |||
Loan term | 10 years | ||
Loan amount | $ (500,000) | ||
Loan maturity date | Jul. 2, 2023 | ||
Percentage of interest rate | 4.50% |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Per share data: | ||||
Dividends | ||||
Dilutive potential shares outstanding |