SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended:
September 30, 1995 Commission File No. 1-7939
- ---------------------------------------------- -------
VICON INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 11-2160665
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
525 Broad Hollow Road, Melville, New York 11747
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 293-2200
- -----------------------------------------------------------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, Par Value $.01
(Title of class)
American Stock Exchange
(Name of each exchange on which registered)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
The aggregate market value of Common Stock held by non-affiliates of the
registrant as of December 22, 1995 was approximately $3,500,000.
The number of shares outstanding of the registrant's Common Stock as of December
22, 1995 was 2,762,828.
PART I
ITEM 1 - BUSINESS
General
Vicon Industries, Inc. (the "Company"), incorporated in New York in October,
1967, designs, manufactures, assembles and markets a wide range of closed
circuit television ("CCTV") components and CCTV systems for security,
surveillance, safety, process and control applications by end users. The Company
sells CCTV components and systems directly to distributors, dealers and original
equipment manufacturers, principally within the security industry. The U.S.
security industry is a multi-billion dollar industry which includes guard
services, armored carrier, electronic alarms and sensing equipment, safes,
locking devices and access systems, as well as CCTV. The nature of the Company's
business and the general security market it serves has not changed materially in
the past five years.
Users of the Company's products typically utilize them as a visual crime
deterrent, for visual documentation, observing inaccessible or hazardous areas,
enhancing safety, obtaining cost savings (such as lower insurance premiums),
managing control systems, and improving the efficiency and effectiveness of
personnel. The Company's products are marketed under its own brand names and
registered trademarks. In fiscal 1995, no customer represented more than 10% of
consolidated revenues.
Products
The Company's product line consists of approximately 600 products, of which
about a third represent model variations. The Company's product line consists of
various elements of a video surveillance system, including video cameras,
display units (monitors), cassette recorders, switching equipment for video
distribution, digital video and signal processing units (which perform character
generation, multi screen display, video insertion, intrusion detection, source
identification and alarm processing), motorized zoom lenses, remote camera
positioning devices, manual and computer based system controls, environmental
camera enclosures and consoles for system assembly. In 1995, the Company
introduced a new product called ProTech which is a Windows based command and
control software package. ProTech allows personal computers (p.c.) users to
graphically program and operate from a P.C. all of the Company's digital control
and video processing systems. The Company expects to further enhance the
capabilities of ProTech. The Company maintains a large line of products due to
the many varied climatic and operational environments under which the products
are expected to perform. In addition to selling from a standard catalog line,
for significant orders, the Company will produce to specification or modify an
existing product to meet a customer's requirements. The Company's products range
in price from $10 for a simple camera mounting bracket to approximately one
hundred thousand dollars (depending upon configuration) for a large digital
control and video switching system.
- 2 -
Marketing
The Company's products are sold worldwide, principally to independent
distributors, dealers and integrators of various types of security-related
systems. Sales are made by in-house customer service representatives, field
sales engineers and by independent sales representatives in certain areas of the
United States. The sales effort is supported by several in-house application
engineers.
Although the Company does not sell directly to end users, much of its sales
promotion and advertising is directed at end user markets. The Company's
products are employed in video system installations by: (1) commercial and
industrial users, such as office buildings, manufacturing plants, warehouses,
apartment complexes, shopping malls and retail stores; (2) federal, state, and
local governments for national security purposes, municipal facilities, prisons,
and military installations; (3) financial institutions, such as banks, clearing
houses, brokerage firms and depositories, for security purposes; (4)
transportation departments for highway traffic control, bridge and tunnel
monitoring, and airport, subway, bus and seaport surveillance; (5) gaming
casinos, where video security is often mandated by local statute; and (6) health
care facilities, such as hospitals, particularly psychiatric wards and intensive
care units. The Company estimates that approximately 50 percent of its total
revenues are sales for commercial and industrial uses.
The Company's principal sales offices are located in Melville, New York;
Atlanta, Georgia and Segensworth, England.
International Sales
The Company sells internationally by direct export to dealers and distributors,
and, in Europe through the Company's United Kingdom (U.K.) subsidiary. In fiscal
1995, the operating profit and identifiable assets for the Company's U.K.
subsidiary amounted to approximately $573,000 and $5.2 million, respectively.
For more information regarding foreign operations, see Note 7 of Notes to
Consolidated Financial Statements included elsewhere herein. Direct export sales
and sales from the Company's U.K. subsidiary amounted to $17.5 million, $16.7
million and $16.1 million or 40%, 35% and 35% of consolidated revenues in fiscal
years 1995, 1994, and 1993, respectively. Export sales are made through a
wholly-owned subsidiary, Vicon Industries Foreign Sales Corporation, a tax
advantaged foreign sales corporation. The Company's principal foreign markets
are Europe and the Far East, which together accounted for approximately 83
percent of international sales in fiscal 1995. Additional information is
contained in the discussion of foreign currency activity included in Item 7.
- 3 -
Competition
The Company competes in areas of price, service, product performance and
availability with several large and small public and privately-owned companies
in the manufacture and distribution of CCTV systems and components (excluding
cameras, monitors and video cassette recorders "Video Products") within the
security industry. The Company's Video Products compete with many large
companies whose financial resources and scope of operations are substantially
greater than the Company's. The Company is one of a few domestic market
suppliers that design, assemble, manufacture, market and support an extensive
line of products offering a comprehensive system capability in a wide range of
applications. Many competitors, including manufacturers of cameras, monitors and
recorders, typically produce a limited product line since components and
accessories are low volume items. The Company believes a broad product line is
desirable since many customers prefer to obtain a complete video system from one
supplier with the assurance of product compatibility and reliability. In recent
years, price competition has intensified limiting the amount of cost increases
the Company can pass on to customers and in some instances requiring price
reductions.
Research and Development
The Company is engaged in ongoing research and development activities in
connection with new or existing products. Changes in CCTV technology have
incorporated the use of advanced electronic components and new materials which
add to product life and performance. Twenty-one professional employees devote
full time to the development of new products and to improving the qualities and
capabilities of existing products. Further, the Company engages the services of
others to assist in the development of new products. Expenditures for research
and development amounted to approximately $1,900,000 in 1995, $1,600,000 in
1994, and $1,600,000 in 1993 or approximately 4.2% of revenues in 1995, 3.4% of
revenues 1994, and 3.5% of revenues in 1993.
Source and Availability of Raw Materials
The Company has not experienced shortages or significant difficulty in obtaining
its raw materials, components or purchased finished products. Raw materials are
principally aluminum, steel and plastics, while components are mainly motors,
video lenses and standard electronic parts. In 1995, the Company procured
directly and indirectly approximately 19% of its product purchases from Chun
Shin Electronics, Inc., its Korean joint venture (see Item 13 for further
discussion of the Korean joint venture). The Company is not dependent upon any
other single source for a significant amount of its raw materials, components or
purchased finished products.
Patents and Trademarks
The Company owns a limited number of design and utility patents expiring at
various times and has several patent applications pending with respect to the
design and/or mechanical function of its products. The Company has certain
trademarks registered and several other trademark applications pending both in
the United States and in Europe. The Company has no licenses, franchises or
concessions with respect to any of its products or business dealings. The
Company does not deem its patents and trademarks, or the lack of licenses,
franchises and concessions, to be of substantial significance or to have a
material effect on its business.
- 4 -
Inventories
The Company maintains an inventory of finished products sufficient to
accommodate its customers' requirements, since most sales are to
dealer/contractors who do not carry large stock inventories. Parts and
components inventories are also carried in sufficient quantities to permit
prompt delivery of certain items. The Company would rather carry adequate
inventory quantities than experience shortages which detract from the production
process and sales effort. The Company's business is not seasonal.
Backlog
The backlog of orders believed to be firm as of September 30, 1995 and 1994 was
approximately $2.7 million and $3.0 million, respectively. All orders are
cancelable without penalty at the option of the customer. The Company prefers
that its backlog of orders not exceed its ability to fulfill such orders on a
timely basis, since experience shows that long delivery schedules only encourage
the Company's customers to look elsewhere for product availability.
Employees
At September 30, 1995, the Company employed 175 full-time employees, of whom
five are officers, 50 administrative personnel, 65 employed in sales capacities,
25 in engineering, and 30 production employees. At September 30, 1994, the
Company employed 185 persons categorized in similar proportions to those of
1995. There are no collective bargaining agreements with any of the Company's
employees and the Company considers its relations with its employees to be good.
ITEM 2 - PROPERTIES
In January 1988, the Company sold and subsequently leased back its 108,000
square foot headquarters facility in Melville, New York, which accommodates the
Company's sales, distribution, administration, product development and limited
assembly and manufacturing operations. Currently, the Company subleases 28,000
sq. ft. of its facility under an agreement which expires on February 28, 1997.
In November 1994, the Company entered into a sublease agreement dated as of
January 1, 1993, which gives a company affiliated with its landlord the right to
occupy approximately 25,000 sq. ft. of its primary operating facility with two
months notice in exchange for specified rent payments through the expiration of
the primary lease in 1998. In connection with such agreement, the landlord and
the subtenant were each granted an option to ask the Company to vacate the
entire premises with six months notice and the landlord agreed to release the
Company from all future obligations under its lease in exchange for a lease
termination payment by the Company. (See Notes 3 and 10 of Notes to Consolidated
Financial Statements included elsewhere herein for further information). The
Company believes that this facility is adequate to support its near term
operating plans. The Company also operates, under lease, a regional sales office
in Atlanta, Georgia. In addition, the Company owns a 14,000 square foot sales,
service and warehouse facility in southern England which services the U.K. and
European Community markets.
ITEM 3 - LEGAL PROCEEDINGS
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
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PART II
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The Company's stock is traded on the American Stock Exchange under the symbol
(VII). The following table sets forth for the periods indicated, the range of
high and low prices for the Company's Common Stock on the American Stock
Exchange:
Quarter
Ended High Low
Fiscal 1995
December 2-1/16 1-1/2
March 2-15/16 1-1/2
June 2-1/2 1-3/8
September 2-1/8 1-9/16
Fiscal 1994
December 2-1/8 1- 3/4
March 2-3/16 1- 7/8
June 2-3/16 1-11/16
September 2 1-11/16
The Company has not declared or paid cash dividends on its Common Stock for any
of the foregoing periods. Additionally, under the current loan agreement, the
Company may not declare dividends. The approximate number of holders of Common
Stock at December 22, 1995 was 1,500.
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ITEM 6 - SELECTED FINANCIAL DATA
FISCAL YEAR 1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(in thousands, except per share data)
Net sales $ 43,847 $ 47,714 $ 45,923 $ 45,041 $ 42,055
Gross profit 9,546 10,714 9,274 8,150* 10,505
Pretax income (loss) (1,267) 74 (1,858) (3,317) (478)
Net income (loss) (1,347) 45 (1,875) (3,906) (377)
Income (loss) per share (.49) .02 (.68) (1.42) (.14)
Total assets 26,423 28,857 26,069 26,701 30,325
Long-term debt 5,339 6,059 5,621 6,273 6,648
Working capital 10,721 13,359 13,420 15,741 18,957
Property, plant and
equipment (net) 3,262 3,180 3,245 3,913 4,251
Cash dividends - - - - -
* Includes a provision of $2.7 million for discontinuance of certain products
and product lines.
- 7 -
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Fiscal Year 1995 Compared with 1994
Net sales for 1995 were $43.8 million, a decrease of 8.1%, compared with $47.7
million in 1994. The sales decline was the result of lower domestic shipments,
while foreign sales increased $.8 million to $17.5 million. Domestic sales were
affected by several factors such as direct end user selling by competition; lack
of competitiveness of certain products whose cost is denominated in yen; and
shortened product life cycles which made certain of the Company's key control
systems less competitive. The backlog of orders was $2.7 million at September
30, 1995 compared with $3.0 million at September 30, 1994.
Gross profit margins were 21.8% of net sales in 1995, compared with 22.5% in
1994. The margin decline was due principally to the impact of lower sales in
relation to a substantially fixed overhead structure. In addition, the value of
the dollar declined significantly against the Japanese yen for most of the year
which lowered margins of those products sourced in Japan.
Operating expenses in 1995 totaled $9.8 million compared with $9.9 million in
1994. Operating expenses, as a percent of sales, amounted to 22.4% and 20.7% in
1995 and 1994, respectively. The increase in expenses as a percent of sales is
due in part to higher bad debt expense, severance pay, bank and professional
fees.
During 1994, the Company incurred an unrealized foreign exchange gain of
$45,000. This gain resulted from the Company's revaluation of its yen
denominated mortgage obligation into U.S. dollars as the value of the British
pound sterling gained against the Japanese yen during the year.
Interest expense increased $230,000 as a result of higher interest rates.
The net loss of $1.3 million compared with a profit of $45,000 was the result of
lower sales and gross margins and higher interest expenses as discussed above.
- 8 -
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Fiscal Year 1994 Compared with 1993
Net sales for 1994 were $47.7 million, an increase of 3.9%, compared with $45.9
million in 1993. The sales growth resulted primarily from increased sales in
Europe. The backlog of orders was $3.0 million at September 30, 1994 compared
with $4.1 million at September 30, 1993. This decline is the result of lower
domestic and export sales bookings in 1994.
Gross profit margins were 22.5% of net sales in 1994, compared with 20.2% in
1993. In 1993, the Company's cost of products sourced in Japan increased
significantly as a result of a severe decline in the value of the U.S. dollar
compared with the Japanese yen. Also, a decline in the value of the British
pound versus the U.S. dollar further reduced margins on U.S. sourced product
sales in Europe. In 1994, the value of the dollar continued to weaken against
the Japanese yen but to a lesser extent than in 1993. The Company was able to
substantially offset the effects of this further decline by securing U.S. dollar
based purchase agreements to cover most of the year's yen based product purchase
commitments. During 1994, the Company began shifting product sourcing to
suppliers transacting in more stable and favorable currencies. Further, the
value of the British pound increased against the U.S. dollar in 1994 which
increased margins on U.S. sourced product sales in Europe. The Company was also
able to reduce its indirect manufacturing expenses in 1994 while increasing
product production, thus increasing product margins. Finally, prior year margins
were adversely impacted by the recognition of a $450,000 provision to the
estimated realizable value of certain discontinued product parts and components.
Such provision accounted for approximately 1% of the 1994 increase in gross
profit margins.
Operating expenses in 1994 totaled $9.9 million compared with $10.3 million in
1993. Operating expenses, as a percent of sales, amounted to 20.7% and 22.5% in
1994 and 1993, respectively. The decline in expenses was principally the result
of an ongoing cost control program.
During 1994, the Company incurred an unrealized foreign exchange gain of $45,000
compared with a loss of $262,000 in 1993. This gain or loss results from the
Company's revaluation of its yen denominated mortgage obligation into U.S.
dollars. The decrease in the loss was due to the relative stability of the
British pound sterling against the Japanese yen during the year.
Interest expense increased by $224,000 in 1994 as a result of higher interest
rates and higher borrowing levels.
Pretax income improved approximately $1.9 million as a result of increased
sales, higher gross margins and lower operating expenses as discussed above.
- 9 -
MANAGEMENT'S DISCUSSION AND ANALYSIS
LIQUIDITY AND FINANCIAL CONDITION
September 30, 1995 Compared with 1994
Total shareholders' equity was approximately $8.6 million at September 30, 1995,
despite a net loss of $1.3 million in fiscal 1995. Working capital declined by
approximately $2.6 million to $10.7 million at September 30, 1995. The decline
was principally due to the operating loss and accelerated paydown of $.9 million
of long term bank debt.
Accounts receivable decreased approximately $1.4 million to $8.4 million at
September 30, 1995. The decrease was the result of lower fourth quarter sales
and improved receivable turnover. Inventories declined $1.4 million to $12.1
million at September 30, 1995. Finished products at the Company's U.K.
subsidiary decreased $.8 million while raw material and component inventories
accounted for the remaining inventory decline as the Company moved production to
its off-shore plant and domestic contract manufacturers. Accounts payable to a
related party, Chugai Boyeki Co., Ltd., increased approximately $1.2 million to
$6.9 million at September 30, 1995 in support of the Company's repayment of bank
debt.
The Company has a revolving line of credit of 700,000 pounds sterling (approx.
$1.1 million) in the U.K. to support local cash requirements. At September 30,
1995, borrowings under this agreement were approximately $907,000, which was
used for general working capital purposes.
In December 1994, the Company extended its bank revolving credit agreement to
October 1995. Borrowings under such agreements amounted to approximately $2.8
million and $4.5 million, respectively, at September 30, 1995 and 1994, which
was used principally for U.S. working capital purposes. At September 30, 1995,
the Company was in default of certain covenants under the agreement and on
December 28, 1995 repaid the entire loan with the proceeds of a new bank loan.
The new two year loan agreement provides for maximum borrowings of $3,250,000
through June 30, 1996 and $4,000,000 thereafter, subject to an availability
formula based on accounts receivable and inventories. Concurrent with the new
loan agreement, the Company amended its $2,000,000 secured promissory note with
Chugai Boyeki Co., Ltd., a related party, to defer all scheduled installments to
July 1998. The Company believes that the new loan agreement and its other
sources of credit provide adequate funding to meet its near term cash
requirements.
- 10 -
Foreign Currency Activity
The Company's foreign exchange exposure is principally limited to the
relationship of the U.S. dollar to the Japanese yen and the British pound
sterling.
Japan sourced products denominated in Japanese yen accounted for approximately
19 percent of product purchases in fiscal 1995. In recent years the dollar has
weakened dramatically in relation to the yen, resulting in increased costs for
such products. When market conditions permit, cost increases due to currency
fluctuations are passed on to customers through price increases. The Company
also attempts to reduce the impact of an unfavorable exchange rate condition
through cost reductions from its suppliers, lowering production cost through
product redesign, and shifting product sourcing to suppliers transacting in more
stable and favorable currencies. During the period from the second half of 1993
through July 1994, the Company was granted dollar based pricing through Chugai
Boyeki Co., Ltd., its Japanese supplier. Subsequent to this period, the
Company's purchases have been denominated in Japanese yen. However, this
supplier, at the Company's direction, has entered into foreign exchange
contracts on behalf of the Company to hedge the currency risk on these product
purchases.
Sales to the Company's U.K. subsidiary, which approximated $4.3 million in
fiscal 1995, are made in pounds sterling and include products sourced from the
Far East. In the years when the pound has weakened significantly against the
U.S. dollar and Japanese yen, the cost of U.S. and Japanese sourced product sold
by the Company's U.K. subsidiary has increased. When market conditions
permitted, such cost increases were passed on to the customer through price
increases. The Company attempts to minimize its currency exposure on
intercompany sales through the purchase of forward exchange contracts to cover
unpaid receivables.
The Company intends to increase prices and seek lower prices from suppliers to
mitigate exchange rate exposures, however, there can be no assurance that such
steps will be effective in limiting foreign currency exposure.
Inflation
The impact of inflation on the Company has lessened in recent years as the rate
of inflation declined. However, inflation continues to increase costs to the
Company. As operating expenses and production costs increase, the Company, to
the extent permitted by competition, recovers these increased costs by
increasing prices to its customers.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Part IV, Item 14, for an index to consolidated financial statements and
financial statement schedules.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
- 11 -
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Directors and Executive Officers of the Company are as follows:
Directors and Executive Officers
Donald N. Horn, age 66 Chairman of the Board (since 1967);
term ends April 1996
Kenneth M. Darby, age 49 President, Chief Executive Officer,
Assistant Secretary, and Director
(since 1987); term ends April, 1997
Arthur D. Roche, age 57 Executive Vice President, Chief
Financial Officer, Secretary, Member of
the Office of the President and Director
(since 1992); term ends April 1996
Peter F. Barry, age 66 Director since 1984; term ends April
1996
Milton F. Gidge, age 66 Director since 1987; term ends April
1998
Michael D. Katz, age 57 Director since 1993; term ends April
1998
Peter F. Neumann, age 61 Director since 1987; term ends April
1997
W. Gregory Robertson, age 51 Director since 1991; term ends April
1998
Kazuyoshi Sudo, age 53 Director since 1987; term ends April
1997
Arthur V. Wallace, age 70 Director since 1974; term ends April
1998
Peter A. Horn, age 40 Vice President, Compliance and Quality
Assurance
Yacov A. Pshtissky, age 44 Vice President, Engineering
Kevin D. Whitley, age 39 Vice President, U.S. Sales
Mr. D. Horn founded the Company in 1967 and has served as Chairman of the Board
since its inception. He also served as Chief Executive Officer from the
Company's inception until April 1992 and as President to September, 1991.
Mr. Darby has served as Chief Executive Officer since April, 1992 and as
President since October, 1991. Mr. Darby also served as Chief Operating Officer
and as Executive Vice President, Vice President, Finance and Treasurer of the
Company. He first joined the Company in 1978 as Controller after more than nine
years at KPMG Peat Marwick, a major public accounting firm.
Mr. Roche joined the Company as Executive Vice President and co-participant in
the Office of the President in August 1993. For the six months earlier, Mr.
Roche provided consulting services to the Company. In October, 1991 Mr. Roche
retired as a partner of Arthur Andersen & Co., an international accounting firm
whom he joined in 1960.
Mr. Barry is a retired executive of Grumman Corp., an aerospace manufacturer,
for whom he served from August 1988 to March 1991 as Senior Vice President of
Washington D.C. operations. Previously, he served since 1974 as President of
Hartman Systems, Inc., a manufacturer of electronic controls and display devices
for military applications. Mr. Barry currently acts as a consultant to private
industry on government relations.
- 12 -
Mr. Gidge is a retired executive officer of Lincoln Savings Bank (1976-1994) and
served as its Chairman, Credit Policy. He has also served as a director since
1980 of Interboro Mutual Indemnity Insurance Co., a general insurance mutual
company and since 1988 as a director of Intervest Corporation of New York, a
mortgage banking company.
Mr. Katz is a physician practicing in New York. He is the President of Katz,
Rosenthal, Ganz, Snyder & PDC. He has served in that capacity for 25 years.
Mr. Neumann has been President of Flynn-Neumann Agency, Inc. an insurance
brokerage firm, since 1971. He has also served since 1978 as a director of
Reliance Federal Savings Bank.
Mr. Robertson is President of TM Capital Corporation, a financial services
company, an organization he founded in 1989. From 1985 to 1989, he was employed
by Thomson McKinnon Securities, Inc. as head of investment banking and public
finance.
Mr. Sudo has been Treasurer of Chugai Boyeki (America) Corp., a distributor of
electronic, chemical and optical products, for the past ten years.
Mr. Wallace, who joined the Company in 1970, was Executive Vice President from
1979 until he retired in September, 1990.
Mr. P. Horn joined the Company in January, 1974 and has been employed in various
technical capacities. In 1986 he was appointed as Vice President, Engineering;
in May, 1990 as Vice President, New Products and Technical Support Services; in
September 1993, he was appointed Vice President, Marketing; in 1994 as Vice
President, Product Management; and in 1995 as Vice President, Compliance and
Quality Assurance.
Mr. Pshtissky, who joined the Company in September 1979, as an Electrical Design
Engineer, was promoted to Director of Electrical Product Development in March,
1988 and to Vice President, Engineering in May, 1990.
Mr. Whitley joined the Company in March, 1987 as a Sales Engineer. He was
promoted to Midwest Regional Manager in 1989 and Vice President, U.S. Sales in
August, 1993.
There are no family relationships between any director, executive officer or
person nominated or chosen by the Company to become a director or officer except
for the relationship between Peter A. Horn, an officer of the Company, and
Donald N. Horn, Chairman of the Board. Peter A. Horn is the son of Donald N.
Horn.
- 13 -
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company during the year ended September 30, 1995 and Form 5 and amendments
thereto furnished to the Company with respect to the year ended and certain
written representations, no person, who, at any time during the year ended
September 30, 1995, was a director, officer or beneficial owner of more than 10
percent of any class of equity securities of the Company registered pursuant to
Section 12 of the Exchange Act failed to file on a timely basis, as disclosed in
the above forms, reports required by Section 16 of the Exchange Act during the
year ended September 30, 1995.
ITEM 11 - EXECUTIVE COMPENSATION
The following information is set forth with respect to all compensation paid by
the Company to its Chief Executive Officer and its most highly compensated
executive officers other than the CEO whose annual compensation exceeded
$100,000, for each of the past three fiscal years.
Annual Long Term
Compensation Compensation
Fiscal
Name and Year Ended Options All Other
Principal Position September 30, Salary No. of Shares Compensation
Kenneth M. Darby 1995 $195,000 - $ 3,000 (1)
Chief Executive Officer 1994 $195,000 59,194 $ 3,000 (1)
1993 $192,000 19,838 $31,000 (2)
Arthur D. Roche 1995 $150,000 - -
Executive Vice President 1994 $150,000 50,000 -
1993 $ 25,000 - -
No listed officer received other non-cash compensation amounting to more than
10% of salary.
(1) Represents life insurance policy payment.
(2) Includes a $28,000 cash distribution pursuant to the cancellation of a
deferred compensation agreement and a $3,000 life insurance policy payment.
- 14 -
Stock Options
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Individual Grants Value at Assumed
Annual Rates of Stock
% of Total Price Appreciation
No. of Granted to Exercise For Option Term
Options Employees In Price Expiration
Name Granted Fiscal Year Per Share Date 5% 10%
- ----------------- ---------- ------------- --------- ---------- ------- ------
None
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Value of Unexercised In-
Number of Unexercised Options the-Money Options at
As of September 30, 1995 September 30, 1995 (1)
----------------------------- ------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
Kenneth M. Darby 112,214 23,678 - -
Arthur D. Roche 30,000 20,000 - -
No options were exercised by any of the above-named officers during the year
ended September 30, 1995.
(1) Calculated based on $1.875 per share closing market value at September 30,
1995.
- 15 -
Mr. Darby has entered into an employment contract with the Company that entitles
him to receive an annual salary of $195,000 through fiscal year 2000.
Additionally, Mr. Darby's agreement provides for payment in an amount up to
three times his average annual compensation for the previous five years if there
is a change in control (as defined in the agreement).
Mr. Roche, who joined the Company on August 1, 1993, has an agreement with the
Company that provides an annual salary of $150,000 through September 30, 1997.
The agreement also provides for a payment, at Mr. Roche's option, if there is a
change in control, as defined, equal to the unpaid salary under his agreement.
Messrs. D. Horn and Wallace (a former executive and a current director) each
have insured deferred compensation agreements with the Company which provide
that upon reaching retirement age total payments of $917,000 and $631,000,
respectively, will be made in monthly installments over a ten year period. The
full deferred compensation payment is subject to such individuals' adherence to
certain non-compete covenants. Mr. Wallace, who retired in September 1990, began
receiving payments under the agreement in October, 1990 and Mr. Horn began
receiving payments under the agreement in January, 1994.
Directors, except the Chairman of the Board and employee directors, are each
compensated at the rate of $600 per Board meeting and $300 per committee meeting
attended in person. The Chairman of the Board is compensated at the rate of
$1,000 per Board meeting and $300 per committee meeting attended in person.
- 16 -
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Messrs.
Neumann, Robertson and Wallace, none of whom are or ever have been officers of
the Company, except Mr. Wallace who retired in 1990 as Executive Vice President.
See the section entitled "Certain Relationships and Related Transactions"
included elsewhere herein, for a discussion of certain other relationships
maintained by Mr. Neumann and Mr. Robertson with the Company.
BOARD COMPENSATION COMMITTEE REPORT
The Compensation Committee's compensation policies applicable to the Company's
executive officers for the last completed fiscal year were to pay a competitive
market price for the services of such officers, taking into account the overall
performance and financial capabilities of the Company and the officer's
individual level of performance.
Mr. Darby makes recommendations to the Compensation Committee as to the base
salary and incentive compensation of all executive officers other than Mr.
Darby. The Committee reviews these recommendations with Mr. Darby, and after
such review, determines compensation. In the case of Mr. Darby, the Compensation
Committee makes its determination after direct negotiation with such officer.
For each executive officer, the Committee's determinations are based on the
committee's conclusions concerning each officer's performance and comparable
compensation levels in the CCTV Industry and the Long Island area for similarly
situated officers at other companies. The overall level of performance of the
Company is taken into account but is not specifically related to the base salary
of these executive officers. Also, the Company has established an incentive
compensation plan for all of its executive officers, which provides a specified
bonus to each officer upon the Company's achievement of certain annual
profitability targets.
The Compensation Committee grants options to executive officers to connect
compensation to the performance of the Company. Options are exercisable in the
future at the fair market value at the time of grant, so that an officer granted
an option is rewarded by the increase in the price of the Company's stock. The
Committee grants options based on significant contributions of an executive
officer to the performance of the Company.
In addition, in determining the salary compensation of Mr. Darby as CEO, the
Committee considered the responsibility assumed by him in formulating and
implementing a management and operating restructuring plan.
Compensation Committee
Peter F. Neumann, Chairman, W. Gregory Robertson
and Arthur V. Wallace
- 17 -
This graph compares the return of $100 invested in the Company's stock on
October 1, 1990, with the return on the same investment in the AMEX Market Value
Index and the AMEX High Technology Index.
(The following table was represented by a chart in the printed material)
AMEX High
Vicon AMEX Market Technology
Date Industries, Inc. Value Index Index
10/01/90 100 100 100
10/01/91 82 122 160
10/01/92 109 122 150
10/01/93 64 150 178
10/01/94 66 149 186
10/01/95 68 177 247
- 18 -
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth information as to each person, known to the Company to
be a "beneficial owner" (as defined in regulations of the Securities and
Exchange Commission) of more than five percent of the Company's Common Stock
outstanding as of December 1, 1995 and the shares beneficially owned by the
Company's Directors and by all Officers and Directors as a group.
Name and Address Amount of
of Beneficial Owner Beneficial Ownership (1) % of Class
------------------- ------------------------ ----------
Chugai Boyeki (America) Corp.
55 Mall Drive
Commack, NY 11725
and
Chugai Boyeki Company, Ltd.
2-15-13 Tsukishima
Chuo-ku
Tokyo, Japan 104 548,715 18.0%
Chu Chun
C/O I.I.I. Companies, Inc.
915 Hartford Turnpike
Shrewsbury, MA 01545 168,957 5.5%
Hanshin Securities Co., Ltd.
34-7, Yoido-Dong
Youngdungpo-Gu
Seoul 150-010, Korea 143,000 4.7%
*******************************************************************************
C/O Vicon Industries, Inc.
Michael D. Katz 279,400 (2) 9.2%
Kenneth M. Darby 203,988 (3) 6.7%
Donald N. Horn 156,003 (2) 5.1%
Arthur V. Wallace 66,238 (4) 2.2%
Arthur D. Roche 47,500 (5) 1.6%
Kazuyoshi Sudo 12,000 (2) .4%
Peter F. Barry 5,600 (2) .2%
Milton F. Gidge 5,000 (2) .2%
Peter F. Neumann 3,000 .1%
W. Gregory Robertson -- --
Total all officers and
directors as a group
(13 persons) 823,024 (6) 27.0%
(1) The nature of beneficial ownership of all shares is sole voting and
investment power.
(2) Includes currently exercisable options to purchase 5,000 shares.
(3) Includes currently exercisable options to purchase 140,714 shares.
- 19 -
(4) Includes currently exercisable options to purchase 4,543 shares.
(5) Includes currently exercisable options to purchase 37,500 shares.
(6) Includes currently exercisable options to purchase 250,302 shares.
- 20 -
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and Chugai Boyeki Company, Ltd. (Chugai), a Japanese corporation,
which owns 19.9% of the outstanding shares of the Company, have been conducting
business with each other for approximately sixteen years whereby the Company
imports certain video products and lenses through Chugai and also sells its
products to Chugai who resells the products in certain Asian and European
markets. In fiscal 1995, the Company purchased approximately $11.6 million of
products through Chugai and sold products to Chugai for resale totaling
approximately $3.4 million. Kazuyoshi Sudo, a director, is Treasurer of Chugai
Boyeki (America) Corp., a U.S. subsidiary of Chugai.
Chu S. Chun, who controls 6.1% of the outstanding shares of the Company, also
owns Chun Shin Industries, Inc. (CSI). CSI is a 50% partner with the Company in
Chun Shin Electronics, Inc. (CSE), a joint venture company which manufactures
and assembles certain Vicon products in South Korea. In fiscal 1995, CSE sold
approximately $5.1 million of product to the Company through I.I.I. Companies,
Inc. (I.I.I.), a U.S. based company controlled by Mr. Chun. The Company entered
into a supplier agreement with I.I.I. during 1994 whereby I.I.I. arranges the
importation and provides short term financing on all the Company's product
purchases from CSE. CSE also sold approximately $1.2 million of product to CSI
which sells Vicon product exclusively in Korea. In addition, I.I.I. purchased
approximately $900,000 of products directly from the Company during fiscal 1995
for resale to CSI.
Peter F. Neumann, a director of the Company, is President and the principal
shareholder of Flynn-Neumann Agency, Inc., an insurance brokerage firm, which is
the agent for a majority of the Company's commercial insurance. The premium paid
for such insurance amounted to approximately $94,000 in fiscal 1995.
W. Gregory Robertson, a director of the Company, is President of TM Capital
Corporation, an investment banking firm which provides investment banking
services to the Company on a periodic basis. Services rendered to the Company
during fiscal 1995 but paid subsequent to year end amounted to $25,000.
During 1995, the Company purchased approximately $50,000 of products from
Pro/Four Video Products, Inc., in which Donald N. Horn and Arthur V. Wallace,
directors of the Company, have an ownership interest.
- 21 -
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) (1) Financial Statements
Included in Part IV, Item 14:
Independent Auditors' Report
Financial Statements:
Consolidated Statements of Operations, fiscal years ended
September 30, 1995, 1994, and 1993
Consolidated Balance Sheets at September 30, 1995 and 1994
Consolidated Statements of Shareholders' Equity, fiscal years ended
September 30, 1995, 1994, and 1993
Consolidated Statements of Cash Flows, fiscal years ended September 30,
1995, 1994, and 1993
Notes to Consolidated Financial Statements, fiscal years ended
September 30, 1995, 1994, and 1993
(a) (2) Financial Statement Schedule
Included in Part IV, Item 14:
Schedule II - Valuation and Qualifying Accounts for the years
ended September 30, 1995, 1994, and 1993
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are not applicable and, therefore,
have been omitted.
- 22 -
14(a)(3) Exhibits
Exhibit Number or
Exhibit Incorporation by
Numbers Description Reference to
3 Articles of Incorporation and Incorporated by reference
By-Laws, as amended to the 1985 Annual Report
on Form 10-K; Form S-2
filed in Registration
Statement No. 33-10435 and
Exhibit A, B and C of the
1987 Proxy Statement
10 Material Contracts
(.1) Credit and Security Agreement 10.1
dated December 27, 1995
between the Registrant and
IBJ Schroder Bank and Trust
Company
(.2) Promissory Note dated 10.2
October 5, 1993 as amended
between Registrant and Chugai
Boyeki Company, Ltd.
(.3) Mortgage Loan Agreement dated Incorporated by
June 2, 1989 between the reference to the 1989
Registrant and Chugai Boyeki Annual Report on
Company, Ltd. Form 10-K
(.4) Employment contract dated 10.4
October 1, 1995 between the
Registrant and Kenneth M. Darby
(.5) Letter Agreement dated October 10.5
1, 1995 between Registrant
and Arthur D. Roche
(.6) Employment Agreement dated June 10.6
1, 1995 between Registrant and
Peter Horn
(.7) Employment Agreement dated June 10.7
1, 1995 betwen Registrant and
Yacov Pshtissky
(.8) Deferred Compensation Agreements Incorporated by
dated November 1, 1986 between the reference to the 1992
Registrant and Donald N. Horn and Annual Report on
Arthur V. Wallace Form 10K
(.9) Agreement of lease dated Incorporated by
January 18, 1988 between the reference to the 1988
Registrant and Allan V. Rose Annual Report on Form
10-K
- 23 -
(.10) Sublease Agreement dated Incorporated by reference
as of January 1, 1993 between to the 1994 Annual Report
the Registrant and AVR on Form 10-K
Mart Inc.
(.11) Consent of Overlandlord and Incorporated by reference
Release Agreement (undated) to the 1994 Annual Report
between the Registrant and on Form 10-K
Allan V. Rose
(.12) Sublease Agreement dated 10.12
as of September 1, 1995 between
the Registrant and New York
Blood Center
(.13) Amended and restated 1986 Incorporated by
Incentive Stock Option Plan reference to the 1990
Annual Report on Form
10-K
(.14) 1994 Incentive Stock Incorporated by reference
Option Plan to the 1994 Annual Report
on Form 10-K
(.15) 1994 Non-Qualified Stock Option Incorporated by reference
Plan for Outside Directors to the 1994 Annual Report
on Form 10-K
22 Subsidiaries of the Registrant Incorporated by
reference to the Notes
to the Consolidated
Financial Statements
24 Independent Auditors' Consent 24
No other exhibits are required to be filed.
14(b) - REPORTS ON FORM 8-K
No reports on Form 8-K were required to be filed during the last quarter of the
period covered by this report.
- 24 -
Other Matters - Form S-8 Undertaking
For the purposes of complying with the amendments to the rules governing Form
S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned
registrant hereby undertakes as follows, which undertaking shall be incorporated
by reference into registrant's Registration Statements on Form S-8 Nos. 33-7892
(filed June 30, 1986), 33-34349 (filed April 1, 1990) and 33-90038 (filed
February 24, 1995):
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
- 25 -
KPMG PEAT MARWICK LLP
Independent Auditors' Report
The Board of Directors and Shareholders
Vicon Industries, Inc.:
We have audited the consolidated financial statements of Vicon Industries, Inc.
and subsidiaries as listed in Part IV, item 14(a)(1). In connection with our
audits of the consolidated financial statements, we also have audited the
financial statement schedule as listed in Part IV, item 14(a)(2). These
consolidated financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Vicon Industries,
Inc. and subsidiaries at September 30, 1995 and 1994, and the results of their
operations and their cash flows for each of the years in the three-year period
ended September 30, 1995, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.
KPMG PEAT MARWICK LLP
Jericho, New York
November 16, 1995, except as
to note 6, which is as of
December 28, 1995
- 26 -
VICON INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal Years Ended September 30, 1995, 1994 and 1993
1995 1994 1993
---- ---- ----
Net sales $43,846,571 $47,713,892 $45,922,832
Cost of sales 34,300,638 37,000,055 36,648,513
----------- ----------- -----------
Gross profit 9,545,933 10,713,837 9,274,319
Operating expenses:
General and administrative expense 3,366,662 3,188,183 3,487,616
Selling expense 6,433,483 6,712,436 6,827,256
----------- ----------- -----------
9,800,145 9,900,619 10,314,872
----------- ----------- -----------
Operating (loss) profit (254,212) 813,218 (1,040,553)
Unrealized foreign exchange (gain) loss (550) (44,748) 261,804
Interest expense 1,013,383 783,731 555,453
----------- ----------- -----------
(Loss) income before income taxes (1,267,045) 74,235 (1,857,810)
Income tax expense 80,000 29,000 17,547
----------- ----------- -----------
Net (loss) income $(1,347,045) $ 45,235 $(1,875,357)
=========== =========== ===========
(Loss) income per share $(.49) $.02 $(.68)
===== ===== ======
See accompanying notes to consolidated financial statements.
- 27 -
VICON INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1995 and 1994
ASSETS 1995 1994
- ------ ---- ----
Current
Cash $ 1,151,850 $ 910,400
Accounts receivable (less allowance
of $542,000 in 1995 and
$309,000 in 1994) 8,352,845 9,733,383
Other receivables 261,864 301,548
Inventories:
Parts, components, and materials 1,594,462 2,458,840
Work-in-process 1,686,287 1,267,344
Finished products 8,831,852 9,739,832
----------- -----------
12,112,601 13,466,016
Prepaid expenses 309,288 322,953
----------- -----------
Total current assets 22,188,448 24,734,300
Property, plant and equipment:
Land 292,298 292,298
Building and improvements 1,512,601 1,512,601
Machinery, equipment, and vehicles 11,417,598 10,671,340
----------- ----------
13,222,497 12,476,239
Less accumulated depreciation
and amortization 9,960,558 9,296,420
----------- -----------
3,261,939 3,179,819
Other assets 973,107 943,107
----------- -----------
$26,423,494 $28,857,226
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Borrowings under revolving credit agreement 906,955 936,466
Current maturities of long-term debt 220,739 1,260,158
Accounts payable:
Related party 6,895,073 5,711,951
Other 1,335,935 1,812,756
Accrued wages and expenses 1,697,732 1,289,511
Income taxes payable 78,583 32,270
Deferred gain on sale and leaseback 332,100 332,100
----------- -----------
11,467,117 11,375,212
Total current liabilities
Long-term debt:
Related party 2,437,259 2,332,632
Other 2,901,490 3,726,270
Deferred gain on sale and leaseback 433,993 766,093
Other long-term liabilities 550,609 614,487
Commitments and contingencies - Note 10
Shareholders' equity
Common Stock, par value $.01 per share
Authorized - 10,000,000 shares
Issued 2,788,228 shares 27,882 27,882
Capital in excess of par value 9,396,890 9,396,890
Retained (deficit) earnings (583,789) 763,256
----------- -----------
8,840,983 10,188,028
Less treasury stock at cost, 25,400 shares (82,901) (82,901)
Foreign currency translation adjustment (125,056) (62,595)
----------- -----------
Total shareholders' equity 8,633,026 10,042,532
----------- -----------
$26,423,494 $28,857,226
=========== ===========
See accompanying notes to consolidated financial statements
- 28 -
VICON INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Fiscal Years Ended September 30, 1995, 1994, and 1993
Earnings Foreign Total
Capital in retained currency share-
Common excess of in the Treasury translation holders'
Shares Stock par value business Stock adjustment equity
Balance September 30, 1992 2,788,228 $27,882 $9,396,890 $2,593,378 $(82,901) $(23,714) $11,911,535
Foreign currency translation
adjustment - - - - - (155,908) (155,908)
Net loss - - - (1,875,357) - - (1,875,357)
--------- ------- ---------- ---------- --------- --------- ----------
Balance September 30, 1993 2,788,228 $27,882 $9,396,890 $ 718,021 $(82,901) $(179,622) $ 9,880,270
--------- -------- ---------- ---------- -------- --------- -----------
Foreign currency translation
adjustment - - - - - 82,267 82,267
Net loss - - - 45,235 - - 45,235
--------- ------- ---------- ---------- --------- -------- ----------
Balance September 30, 1994 2,788,228 $27,882 $9,396,890 $ 763,256 $(82,901) $ (62,595) $10,042,532
--------- ------- ---------- ---------- -------- --------- -----------
Foreign currency translation
adjustment - - - - - (62,461) (62,461)
Net loss - - - (1,347,045) - - (1,347,045)
--------- ------- ---------- ---------- --------- --------- ----------
Balance September 30, 1995 2,788,228 $27,882 $9,396,890 $ (583,789) $(82,901) $(125,056) $8,633,026
========= ======= ========== ========== ======== ========= ==========
See accompanying notes to consolidated financial statements.
- 29 -
VICON INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal Years Ended September 30, 1995, 1994 and 1993
1995 1994 1993
---- ---- ----
Cash flows from operating activities:
Net income (loss) $(1,347,045) $ 45,235 $(1,875,357)
Adjustments to reconcile net income
(loss) to net cash (used in)
provided by operating activities:
Depreciation and amortization 704,900 722,488 907,572
Amortization of deferred gain
on sale and leaseback (332,100) (332,100) (332,100)
Unrealized foreign exchange
(gain) loss (550) (44,748) 261,804
Change in assets and liabilities:
Accounts receivable 1,377,405 (422,815) 565,474
Other receivables 39,684 230,259 262,587
Inventories 1,358,533 (2,201,508) (402,703)
Prepaid expenses 13,513 (17,618) 116,407
Other assets (30,000) (359,547) (53,826)
Accounts payable 708,591 572,724 2,301,289
Accrued wages and expenses 409,285 (22,020) 22,583
Income taxes payable 48,077 8,220 (1,540)
Other liabilities (63,878) (35,277) 180,764
---------- ---------- ----------
Net cash (used in) provided
by operating activities 2,886,415 (1,856,707) 1,952,954
---------- ----------- ----------
Cash flows from investing activities:
Capital expenditures, net of
minor disposals (608,808) (573,100) (514,934)
----------- ---------- ----------
Net cash used in
investing activities (608,808) (573,100) (514,934)
----------- ---------- ----------
Cash flows from financing activities:
Increase (decrease) in borrowings
under U.K. revolving credit
agreement (29,511) 941,365 (14,615)
Issuance of promissory note
to related party - 2,000,000 -
Repayments of debt (1,937,723) (625,506) (730,873)
---------- ---------- -----------
Net cash provided by (used
in) financing activities (1,967,234) 2,315,859 (745,488)
---------- ---------- -----------
Effect of exchange rate changes on cash (68,923) (14,765) (85,103)
---------- ---------- -----------
Net increase (decrease) in cash 241,450 (128,713) 607,429
Cash at beginning of year 910,400 1,039,113 431,684
---------- ---------- -----------
Cash at end of year $1,151,850 $ 910,400 $ 1,039,113
========== ========== ===========
Non-cash investing and financing activities:
Capital lease obligations entered into $ 178,151 - -
Cash paid during the fiscal year for:
Income taxes, net $ 32,097 $ 17,431 $ 20,727
Interest $ 974,640 $ 707,357 $ 519,223
See accompanying notes to consolidated financial statements.
- 30 -
VICON INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years ended September 30, 1995, 1994, and 1993
NOTE 1. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Vicon Industries,
Inc. (the Company) and its wholly owned subsidiaries, Vicon Industries Foreign
Sales Corp., a Foreign Sales Corporation (FSC) and Vicon Industries (U.K.), Ltd.
after elimination of intercompany accounts and transactions.
Revenue Recognition
Revenues are recognized when products are sold and title is passed to a third
party, generally at the time of shipment.
Inventories
Inventories are valued at the lower of cost (on a moving average basis which
approximates a first-in, first-out method) or market. When it is determined that
a product or product line will be sold below carrying cost, affected on hand
inventories are written down to their estimated net realizable values.
Property, Plant and Equipment
Property, plant, and equipment are recorded at cost and include expenditures for
replacements or major improvements. Depreciation, which includes amortization of
assets under capital leases, is computed by the straight-line method over the
estimated useful lives of the related assets for financial reporting purposes
and on an accelerated basis for income tax purposes. Machinery, equipment and
vehicles are being depreciated over periods ranging from 2 to 10 years. The
Company's building is being depreciated over a period of 40 years and leasehold
improvements are amortized over the lesser of their estimated useful lives or
the remaining lease term.
Research and Development
Product research and development costs are charged to cost of sales as incurred,
and amounted to approximately $1,900,000, $1,600,000 and $1,600,000 in fiscal
1995, 1994, and 1993, respectively.
Earnings Per Share
Earnings per share are computed based on the weighted average number of shares
outstanding and equivalent shares from dilutive stock options, if any, of
2,763,000 in 1995, 1994, and 1993, respectively.
Foreign Currency Translation
Foreign currency translation is performed utilizing the current rate method
under which assets and liabilities are translated at the exchange rate on the
balance sheet date, while revenues, costs, and expenses are translated at the
average exchange rate for the reporting period. The resulting translation
adjustment of $(125,056) and $(62,595) at September 30, 1995 and 1994,
respectively, is recorded as a component of shareholders' equity. Intercompany
balances not deemed long-term in nature at the balance sheet date resulted in a
translation gain of $46,893, $46,216, and $43,527 in 1995, 1994, and 1993,
respectively, which is reflected in cost of sales.
- 31 -
Income Taxes
In fiscal 1992, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 109, "Accounting for Income Taxes", which requires recognition of
deferred tax liabilities and assets for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under
this method, deferred tax liabilities and assets are determined based on the
difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to be recovered or settled (see Note 5).
Reclassification
Certain prior year amounts have been reclassified to conform with current year
presentation.
NOTE 2. Investment in Affiliate
The Company's 50 percent ownership in Chun Shin Electronics, Inc., a joint
venture company which assembles certain Vicon products in South Korea, is
accounted for using the equity method which reflects the cost of the Company's
investment adjusted for the Company's proportionate share of earnings or losses.
Such earnings or losses have been insignificant during each of the three years
ended September 30, 1995. Assets and sales of the joint venture were
approximately $2.6 million and $6.6 million, respectively, for the fiscal year
ended September 30, 1995. The significant portion of joint venture product sales
were to related parties including approximately $19,000 directly to the Company;
approximately $5.1 million indirectly to the Company through I.I.I. Companies,
Inc., a related party; and approximately $1.2 million to Chun Shin Industries,
Inc., also a related party (see Note 11).
NOTE 3. Deferred Gain on Sale and Leaseback
In fiscal 1988, under a sale and leaseback agreement, the Company sold its
principal operating facility in Melville, New York for approximately $11 million
and leased it back under a ten-year lease agreement. The transaction resulted in
a net gain of $3,321,000 which was deferred and is being amortized over the
ten-year lease period.
NOTE 4. Short-Term Borrowings
Borrowings under the Company's revolving credit agreement represent short term
borrowings by the Company's U.K. subsidiary. Maximum borrowings during 1995,
1994 and 1993 amounted to approximately $1,083,000, $1,123,000, and $494,000,
respectively. The weighted-average interest rate on borrowings during these
years was 8 1/2% in 1995, 7 1/4% in 1994, and 8 1/4% in 1993.
At September 30, 1995 and 1994, Accounts Payable - related party included
approximately $4.5 million and $4.3 million, respectively, of extended accounts
payable balances due Chugai Boyeki Company, Ltd. The extended accounts payable
balance at September 30, 1995 includes approximately $4.0 million of purchases
denominated in Japanese yen which bear interest at the related party's internal
lending rate (4.25% at September 30, 1995). The remaining balances are
denominated in U.S. dollars and bear interest at their U.S. bank's prime rate
(8.75% at September 30,1995).
- 32 -
NOTE 5. Income Taxes
The components of income tax expense (recovery) for the fiscal years indicated
are as follows:
Current Deferred Total
1995
Federal $ - $ - $ -
State - -
Foreign 80,000 - 80,000
------------- ------------ -------------
$ 80,000 $ - $ 80,000
============= ============ =============
1994
Federal $ - $ - $ -
State - - -
Foreign 29,000 - 29,000
------------- ------------ -------------
$ 29,000 $ - $ 29,000
============= ============ =============
1993
Federal $ - $ - $ -
State - - -
Foreign 17,547 - 17,547
------------- ------------ -------------
$ 17,547 $ - $ 17,547
============= ============ =============
A reconciliation of the U.S. statutory tax rate to the Company's effective tax rate
follows:
1995 1994 1993
---- ---- ----
Amount Percent Amount Percent Amount Percent
U.S. statutory tax rate $(431,000) 34.0% $ 25,000 34.0 % $(632,000) (34.0)%
U.S. net operating
loss carryforward 532,000 42.0 (21,000) (28.3) 549,000 29.6
Foreign subsidiary
operations (42,000) (3.3) 6,000 8.0 81,547 4.4
Officers' life insurance 17,000 1.3 17,000 22.8 17,000 0.9
Other 4,000 0.3 2,000 2.6 $ 2,000 -
-------- ------ -------- ----- --------- ---
Effective Tax Rate $ 80,000 6.3% $ 29,000 39.1% $ 17,547 0.9 %
======== ====== ======== ===== ========== ======
- 33-
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and liabilities at September 30, 1995 and 1994 are
presented below:
1995 1994
---- ----
Deferred tax assets:
Deferred gain on sale and leaseback $ 259,000 $ 371,000
Inventory obsolescence and
disposition reserves 328,000 337,000
Deferred compensation accruals 221,000 243,000
Allowance for doubtful
accounts receivable 177,000 95,000
Net operating loss carryforwards 1,943,000 1,352,000
General business credit carryforwards 186,000 186,000
Other 8,000 9,000
---------- ----------
Total deferred tax assets 3,122,000 2,593,000
Less valuation allowance (3,034,000) (2,501,000)
---------- ----------
Net deferred tax assets 88,000 92,000
---------- ----------
Deferred tax liabilities:
Cash surrender value of officers'
life insurance 65,000 54,000
Rental income on sublease - 12,000
Other 23,000 26,000
---------- -----------
Total deferred tax liabilities 88,000 92,000
---------- -----------
Net deferred tax assets and liabilities $ -0- $ -0-
---------- -----------
At September 30, 1995, the Company had net operating loss carryforwards for
federal income tax purposes of approximately $5,700,000 which are available to
offset future federal taxable income, if any, through 2010. The Company also had
general business tax credit carryforwards for federal income tax purposes of
approximately $186,000 which are available to reduce future federal income
taxes, if any, through 2003. Pretax domestic and foreign (loss) income in fiscal
1995 amounted to approximately $(1,626,000) and $291,000, respectively.
- 34 -
NOTE 6. Long-Term Debt
Long-term debt is comprised of the following:
1995 1994
---- ----
Related party:
Mortgage loan denominated in Japanese
yen at a formula interest rate
(6.1% and 7.4% at September 30, 1995
and 1994) with annual installments of
14,400,000 yen to December 1998 $ 583,010 $ 728,290
Term loan with interest rate of 1%
above the prevailing prime rate
(10.0% and 8.75% at September 30, 1995
and 1994) due July 1998 2,000,000 2,000,000
---------- ----------
2,583,010 2,728,290
Less installments due within one year 145,751 395,658
---------- ----------
$2,437,259 $2,332,632
Banks and other:
Revolving credit loan (see below) $2,800,000 $4,500,000
Capital lease obligations 146,048 -
Other 30,430 90,770
---------- ----------
2,976,478 4,590,770
Less installments due within one year 74,988 864,500
---------- ----------
$2,901,490 $3,726,270
========== ==========
In October 1993, the Company issued a $2,000,000 secured promissory note to
Chugai Boyeki Co., Ltd., a related party. The note is subordinated to senior
bank debt with regard to liens and interest under certain conditions. Subsequent
to year end, the Company amended the note to defer all scheduled installments to
July 1998. Accordingly, such amounts have been classified as long-term in the
accompanying Consolidated Balance Sheets.
At September 30, 1995, the Company was a party to a secured Revolving Credit
Agreement with two banks which provided for aggregate maximum borrowings of
$2,800,000 subject to an availability formula based on accounts receivable.
Borrowings under the Credit Agreement were due in October, 1995, with interest
at 3% above the banks' prime rate (11.75% at September 30, 1995), and required
no compensating balances. At September 30, 1995, the Company was in default of
certain financial covenants under this agreement. Such debt was repaid on
December 28, 1995 with the proceeds received under a new two year credit
agreement with another bank which provides for maximum borrowings of $3,250,000
through June 30, 1996 and $4,000,000 thereafter, subject to an availability
formula based on accounts receivable and inventory balances. Borrowings under
the agreement bear interest at the bank's prime rate plus 1.25% (9.75% at
December 27, 1995).
The bank debt contains restrictive covenants which, among other things, require
the Company to maintain certain levels of net worth, earnings and ratios of
interest coverage and debt to net worth. Borrowings under these agreements are
secured by substantially all assets of the Company.
Long-term debt maturing in each of the four years subsequent to September 30,
1995 approximates $221,000 in 1996, $220,000 in 1997, $4,973,000 in 1998 and
$145,000 in 1999, respectively.
- 35 -
At September 30, 1995, future minimum annual rental commitments under the
non-cancellable capital lease obligations were as follows: $68,556 in 1996,
$68,556 in 1997, and $28,308 in 1998, which includes imputed interest of $12,235
in 1996, $6,355 in 1997 and $782 in 1998.
NOTE 7. Foreign Operations
The Company operates one foreign entity, Vicon Industries (U.K.), Ltd., a wholly
owned subsidiary which markets and distributes the Company's products
principally within the United Kingdom and Europe.
The following summarizes certain information covering the Company's operations in the
U.S. and U.K. for fiscal years 1995, 1994, and 1993:
1995 1994 1993
---- ---- ----
Net sales
U.S. $34,294,000 $39,342,000 $38,960,000
U.K. 9,553,000 8,372,000 6,963,000
----------- ----------- -----------
Total $43,847,000 $47,714,000 $45,923,000
Operating profit (loss)
U.S. $ (827,000) $ 542,000 $(1,176,000)
U.K. 573,000 271,000 135,000
----------- ----------- -----------
Total $ (254,000) $ 813,000 $(1,041,000)
Identifiable assets
U.S. $21,213,000 $23,388,000 $22,365,000
U.K. 5,210,000 5,469,000 3,704,000
----------- ----------- -----------
Total $26,423,000 $28,857,000 $26,069,000
Net assets-- U.K. $ 711,000 $ 499,000 $ 418,000
U.S. sales include $7,987,000, $8,358,000, and $9,144,000 for export in fiscal
years 1995, 1994, and 1993, respectively. Operating profit (loss) excludes
unrealized foreign exchange gain/loss, interest expense and income taxes. U.S.
assets include $1,127,000, $888,000, and $826,000 in fiscal years 1995, 1994,
and 1993, respectively, of cash for general corporate use.
NOTE 8. Stock Options and Stock Purchase Rights
Stock option plans include both incentive and non-qualified options covering a
total of 554,174 shares of common stock reserved for issuance to key employees,
including officers and directors. Such amount includes a total of 200,000
options reserved for issuance in 1994 under an Incentive Stock Option Plan, as
well as a total of 50,000 options reserved for issuance in 1994 under a
Non-Qualified Stock Option Plan for Outside Directors. Both of these plans were
approved by the Company's shareholders in April 1994. All options are issued at
fair market value at the grant date and are exercisable in varying installments
according to the plans. There were 254,513 and 123,000 shares available for
grant at September 30, 1995 and 1994, respectively. As of September 30, 1995,
1994, and 1993, options exercisable pursuant to the plans amounted to 198,783,
268,054 and 291,738, respectively.
- 36 -
Changes in outstanding stock options for the three years ended September 30,
1995, are presented below:
Shares Price Range Per Share
Balance-September 30, 1992 312,256 $ 2.12 -- 4.88
Granted 23,482 $ 2.25 -- 2.875
Cancelled (22,564) $ 2.12 -- 2.875
-------
Balance-September 30, 1993 313,174 $ 2.12 -- 4.88
-------
Granted 221,694 $ 1.88 -- --
Cancelled (103,694) $ 2.12 -- 4.88
-------
Balance-September 30, 1994 431,174 $ 1.88 -- 2.38
-------
Granted 25,000 $ 1.94 -- --
Cancelled (156,513) $ 1.88 -- 2.25
-------
Balance-September 30, 1995 299,661 $ 1.88 -- 2.38
-------
In November 1986, the Board of Directors declared a dividend of one Stock
Purchase Right for each share of common stock outstanding on December 1, 1986.
In addition, 385,715 Rights were distributed with certain new shares
subsequently issued by the Company. The Rights entitle the holder to purchase
for $15 one share of common stock subject to adjustment under certain
conditions. The Rights are redeemable by the Company until the occurrence of
certain events at $.05 per Right.
NOTE 9. Industry Segment and Major Customer
The Company operates in one industry and is engaged in the design, manufacture,
assembly, and marketing of closed-circuit television (CCTV) equipment and
systems for the CCTV segment of the security products industry. The Company's
products include all components of a video surveillance system such as remote
positioning devices, cameras, monitors, video switchers, housings, mounting
accessories, recording devices, manual and motorized lenses, controls, video
signal equipment, and consoles for system assembly. No customer represented
sales in excess of ten percent of consolidated revenues during any of the three
fiscal years presented.
NOTE 10. Commitments
In January 1988, the Company entered into a sale and leaseback agreement
involving its principal operating facility (see Note 3). The ten-year lease
provides for rent of $1,128,000 in the first year, increasing 4 percent annually
through 1998.
In November 1994, the Company entered into a sublease agreement, dated January
1, 1993, with an affiliated company of the landlord which provides for minimum
sublease payments to the Company of $120,000 in calendar year 1993; $180,000 in
1994; $240,000 in 1995 and $300,000 per year from January 1, 1996 through
January 19, 1998, in exchange for the right to occupy a total of approximately
25,000 sq. ft. of office and warehouse space in the Company's primary operating
facility. At the same time, the Company entered into an agreement with its
landlord and subtenant whereby the Company has agreed to vacate its principal
operating facility at anytime after January 1995, at the landlord's or
subtenant's option, and the landlord has agreed to release the Company from its
future lease obligations in consideration of a lease termination payment by the
Company to the landlord of $1,000,000. Such option, if exercised, would also
require the landlord to provide the Company with at least six months notice
prior to the required vacate date. The lease termination payment will be reduced
by $27,778 for each month after January 31, 1995 that the Company remains
obligated under the primary lease. Should the landlord or subtenant exercise its
option, the potential charge to earnings will consist of relocation costs and
the write-off of abandoned leasehold improvements. The lease termination payment
will be substantially offset by the then remaining carrying value of the
deferred sale and leaseback gain.
- 37 -
Additionally, the Company occupies certain other facilities, or is contingently
liable, under long-term operating leases which expire at various dates through
1998. The leases, which cover periods from one to four years, generally provide
for renewal options at specified rental amounts. The aggregate operating lease
commitment (net of sublease rental) at September 30, 1995 was $2,406,000 with
minimum rentals for the fiscal years shown as follows: 1996--$900,000;
1997--$1,121,000; 1998--$385,000.
The Company is a party to employment agreements with four executives which
provide for, among other things, the payment of compensation if there is a
change in control (as defined in the agreements). The contingent liability under
these change in control provisions at September 30, 1995 was approximately
$1,485,000. The total compensation payable under these agreements aggregated
$1,675,000 at September 30, 1995. The Company is also a party to insured
deferred compensation agreements with two retired officers. The aggregate
remaining compensation payments of approximately $1,114,000 as of September 30,
1995 are subject to the individuals adherence to certain non-compete convenants,
and are payable over a ten year period commencing upon retirement.
Sales to the Company's U.K. subsidiary are denominated in British pounds
sterling. The Company attempts to minimize its currency exposure on these
intercompany sales through the purchase of forward exchange contracts to cover
unpaid receivables. These contracts generally involve the exchange of one
currency for another at a future date and specified exchange rate. At September
30, 1995, the Company had approximately $872,000 of outstanding forward exchange
contracts to sell British pounds. Such contracts expire at varying dates and
exchange rates through December 27, 1995.
The Company's purchases of Japanese sourced products through Chugai Boyeki Co.,
Ltd., a related party, are denominated in Japanese yen. At September 30, 1995,
Chugai had purchased, on the Company's behalf, forward exchange contracts to
purchase approximately 380 million Japanese yen to hedge the currency risk on
accounts payables denominated in Japanese yen. Such contracts expire at varying
dates and exchange rates through June 1996.
- 38 -
NOTE 11: Related Party Transactions
As of September 30, 1995 and 1994, Chugai Boyeki Company, Ltd. ("Chugai") owned
548,715 shares of the Company's common stock (19.9% of the total outstanding
shares). The Company, which has been conducting business with Chugai for
approximately 16 years, imports certain finished products and components through
Chugai and also sells its products to Chugai who resells the products in certain
Asian and European markets. The Company purchased approximately $11.6, $14.1,
and $14.6 million of products and components from Chugai in fiscal years 1995,
1994, and 1993, respectively, and the Company sold $3.4, $3.5, and $4.5 million
of product to Chugai for distribution in fiscal years 1995, 1994, and 1993,
respectively. At September 30, 1995 and 1994, the Company owed $6.9 million and
$5.8 million, respectively, to Chugai and Chugai owed $92,000 and $157,000,
respectively, to the Company resulting from purchases of products. The amounts
owed to Chugai are secured by a subordinated lien on substantially all the
Company's assets. During fiscal 1989, Chugai made a mortgage loan to the Company
in the amount of $1,026,000 to partially finance the construction of a new
sales/distribution facility in the U.K. In October 1993, the Company borrowed $2
million from Chugai under a promissory note agreement. See Note 6 for a further
discussion of this transaction.
As of September 30, 1995, Mr. Chu S. Chun controlled 168,957 shares of the
Company's common stock (6.1% of the total outstanding shares). Mr. Chun owns
Chun Shin Industries, Inc., the Company's 50% Korean joint venture partner, and
Chun Shin Electronics. (CSE) which purchases product from the joint venture (see
Note 2). During 1994, the Company entered into a supplier agreement with I.I.I.
Companies, Inc. (I.I.I.), a U.S. based company controlled by Mr. Chun, whereby
I.I.I. arranges the importation and provides short term financing on all the
Company's product purchases from Chun Shin Electronics, Inc. During fiscal years
1995 and 1994, the Company purchased approximately $5.1 million and $3.1 million
of products from I.I.I. under this agreement. Further, the Company sold
approximately $900,000 and $1.1 million of its products to I.I.I. during fiscal
years 1995 and 1994, respectively. At September 30, 1995 and 1994, I.I.I. owed
the Company approximately $422,000 and $289,000, respectively.
- 39 -
VICON INDUSTRIES, INC. AND SUBSIDIARIES
QUARTERLY FINANCIAL DATA
(Unaudited)
Net
Earnings
Quarter Net Gross Net (Loss)
Ended Sales Profit Profit (Loss) Per Share
Fiscal 1995
December $11,828,000 $2,698,000 $ 16,000 $ .01
March 10,952,000 2,351,000 (467,000) (.17)
June 10,287,000 2,247,000 (540,000) (.20)
September 10,780,000 2,250,000 (356,000) (.13)
----------- ---------- ----------- -------
Total $43,847,000 $9,546,000 $(1,347,000) $ (.49)
=========== ========== =========== =======
Fiscal 1994
December $11,617,000 $2,529,000 $ (92,000) $ (.03)
March 12,326,000 2,694,000 34,000 .01
June 12,005,000 2,742,000 31,000 .01
September 11,766,000 2,749,000 72,000 .03
----------- ----------- ----------- -------
Total $47,714,000 $10,714,000 $ 45,000 $ .02
=========== =========== =========== =======
The Company has not declared or paid cash dividends on its common stock for any
of the foregoing periods. Additionally, certain loan agreements restrict the
payment of any cash dividends in future periods.
Because of changes in the number of common shares outstanding and market price
fluctuations affecting outstanding stock options, the sum of quarterly earnings
per share may not equal the earnings per share for the full year.
- 40 -
SCHEDULE II
VICON INDUSTRIES, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
Years ended September 30, 1995, 1994, and 1993
Balance at Charged to Balance
beginning costs and at end
Description of period expenses Deductions of period
Reserves and allowances
deducted from asset
accounts:
Allowance for uncollectible
accounts:
September 30, 1995 $309,000 $381,000 $148,000 $542,000
======== ======== ======== ========
September 30, 1994 $295,000 $180,000 $166,000 $309,000
======== ======== ======== ========
September 30, 1993 $303,000 $181,000 $189,000 $295,000
======== ======== ======== ========
- 41 -
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) 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.
VICON INDUSTRIES, INC.
By Kenneth M. Darby By Arthur D. Roche By John M. Badke
------------------------- ------------------------- -------------------
Kenneth M. Darby Arthur D. Roche John M. Badke
President Executive Vice President Controller
(Chief Executive Officer) (Chief Financial Officer) (Chief Acctg.Offr.)
January 12, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons in the capacities and on the
dates indicated:
VICON INDUSTRIES, INC.
Donald N. Horn January 12, 1996
- --------------------- ----------------
Donald N. Horn Chairman of the Board Date
Kenneth M. Darby Director January 12, 1996
- --------------------- ----------------
Kenneth M. Darby Date
Arthur D. Roche Director January 12, 1996
- --------------------- ----------------
Arthur D. Roche Date
Arthur V. Wallace Director January 12, 1996
- --------------------- ----------------
Arthur V. Wallace Date
Peter F. Barry January 12, 1996
- --------------------- ----------------
Peter F. Barry Director Date
Milton F. Gidge January 12, 1996
- --------------------- ----------------
Milton F. Gidge Director Date
Michael D. Katz January 12, 1996
- --------------------- ----------------
Michael D. Katz Director Date
Peter F. Neumann January 12, 1996
- --------------------- ----------------
Peter F. Neumann Director Date
W. Gregory Robertson January 12, 1996
W. Gregory Robertson Director Date
Kazuyoshi Sudo January 12, 1996
Kazuyoshi Sudo Director Date
- 42 -
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) 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.
VICON INDUSTRIES, INC.
By ------------------------ By ------------------------ By ---------------------
Kenneth M. Darby Arthur D. Roche John M. Badke
President Executive Vice President Controller
(Chief Executive Officer) (Chief Financial Officer) (Chief Acctg. Officer)
January 12, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons in the capacities and on the
dates indicated:
VICON INDUSTRIES, INC.
January 12, 1996
Donald N. Horn Chairman of the Board Date
Director January 12, 1996
Kenneth M. Darby Date
Director January 12, 1996
Arthur D. Roche Date
Director January 12, 1996
Arthur V. Wallace Date
January 12, 1996
Peter F. Barry Director Date
January 12, 1996
Milton F. Gidge Director Date
January 12, 1996
Michael D. Katz Director Date
January 12, 1996
Peter F. Neumann Director Date
January 12, 1996
W. Gregory Robertson Director Date
January 12, 1996
Kazuyoshi Sudo Director Date
- 42 -