UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 33-16453
MICRONETICS WIRELESS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 22-2063614
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
26 Hampshire Drive, Hudson, NH 03051
(Address of principal executive offices) (Zip Code)
(603)883-2900
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Outstanding at
Class of Common Stock July 24, 1996
$.01 par share 3,117,438
Page 1 of 11. There is no Exhibit Index.
MICRONETICS WIRELESS, INC.
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Condensed Balance Sheets -
June 30, 1996 and March 31, 1996 3-4
Condensed Statements of Operations-
Three Months Ended June 30, 1996 and
June 30, 1995 5
Condensed Statements of Cash Flows -
Three Months Ended June 30, 1996
and June 30, 1995 6-7
Notes to Condensed Financial
Statements 8
Item 2. Management's Discussion and Analysis 9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 10
Signature 11
PART I. FINANCIAL INFORMATION
MICRONETICS WIRELESS, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
Assets
--------------
June 30, March 31,
1996 1996
-----------------------------
CURRENT ASSETS:
Cash $ 212,387 $ 146,674
Receivables
Trade (net of allowance for
doubtful accounts) 616,684 688,828
Inventories (note 2) 841,249 834,209
Insurance receivable 596,376 596,376
Prepaid expenses and other
current assets 31,984 23,793
Deferred tax asset 25,000 25,000
--------- ---------
TOTAL CURRENT ASSETS 2,323,680 2,314,880
FIXED ASSETS
Land 162,000 162,000
Building & Improvements 840,247 840,247
Furniture, Fixtures, and
Equipment 1,015,318 988,624
Capitalized Leases 102,535 102,535
--------- ---------
Gross Fixed Assets 2,120,100 2,093,406
Accumulated Depreciation
and Amortization (703,332) (674,128)
--------- ---------
TOTAL (NET) FIXED ASSETS 1,416,768 1,419,278
OTHER ASSETS
Deposits 5,701 5,086
Intangibles (Net of 106,973 109,814
Amortization)
Deferred tax asset 120,391 151,391
--------- ---------
TOTAL OTHER ASSETS 233,065 266,291
--------- ---------
TOTAL ASSETS $3,973,513 $4,000,449
========= =========
MICRONETICS WIRELESS, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
Liabilities and Shareholders' Equity
--------------------------------------------
June 30, March 31,
1996 1996
-----------------------------
CURRENT LIABILITIES:
Short term loans and capitalized
leases $ 95,106 $ 90,982
Accounts payable 144,874 218,046
Accrued expenses and taxes, other
than income taxes 145,131 148,455
Subordinated Debentures 25,000 25,000
Deferred Sales 9,342 0
Income taxes payable 4,562 3,815
--------- ---------
TOTAL CURRENT LIABILITIES 424,015 486,298
LONG-TERM DEBT:
Capitalized leases 3,439 7,978
Notes Payable - Bank 923,703 947,089
--------- ---------
TOTAL LONG-TERM DEBT 927,142 955,067
SHAREHOLDER'S EQUITY
Common stock 31,174 31,166
Additional paid-in capital 2,336,522 2,335,530
Retained earnings (deficit) 254,660 192,388
---------- ---------
TOTAL SHAREHOLDERS' EQUITY 2,622,356 2,559,084
---------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $3,973,513 $4,000,449
========== =========
MICRONETICS WIRELESS, INC.
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
--------------------------------------------
3 Months Ended June 30,
1996 1995
-------------- ----------
Operating revenues $ 848,847 $ 842,663
Cost of operations 481,501 495,977
--------- ---------
Gross profit 367,346 346,686
Selling, general and
administrative expenses 220,197 207,021
Research & Development 44,058 40,486
--------- ---------
Operating income 103,091 99,179
Other income (expense):
Rental income 15,062 0
Interest income 651 721
Interest expense (23,279) (10,397)
Other income (2,253) (669)
--------- ---------
Total (9,819) (10,345)
--------- ---------
Income before provision
for income taxes 93,272 88,834
Provision for income taxes 31,000 29,000
--------- ---------
Net income $ 62,272 $ 59,834(1)
========= =========
Net income per share $ 0.02 $ 0.02(1)
========= =========
Weighted average number
of shares outstanding 3,268,858 3,052,831
--------- ---------
__________
(1) Restated to provide for impact of income taxes.
MICRONETICS WIRELESS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
--------------------------------------------
3 Months Ended June 30,
1996 1995
-------------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS:
Cash Flows from operating
Activities:
Net income $ 62,272 $ 59,834
Adjustments to reconcile net
income to net cash provided
by operating activities:
Decrease in deferred tax asset 31,000 29,000
Depreciation and amortization 32,045 27,600
Changes in assets and liabilities:
(increase) decrease in accounts
receivable, inventories, prepaid
expenses and other current assets 56,913 (109,644)
(Increase) decrease in security
deposits and other assets (615) (922)
(Increase) in insurance receivable 0 (21,715)
(Decrease) increase in accounts
payable accrued liabilities,
notes payable and other current
liabilities (75,749) 20,611
Increase (decrease) in deferred
sales 9,342 (21,058)
--------- ----------
Net cash provided (utilized)
by operating activities $ 115,208 $ (16,294)
========= ==========
MICRONETICS WIRELESS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
--------------------------------------------
3 Months Ended June 30,
1996 1995
-------------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS:
Cash Flows from Investment
Activities:
(Additions) to fixed assets $ (26,694) $ (24,819)
--------- ---------
Net cash provided (used) by
investment activities (26,694) (24,819)
--------- ---------
Cash Flows from Financing
Activities:
(Reduction) increase of debt
and capitalized leases (23,801) (17,424)
Proceeds from stock options
exercised 1,000 0
Proceeds from issuance of common
stock 0 0
Proceeds from issuance of
subordinated convertible
debentures 0 0
--------- ---------
Net cash provided (used)
by financing activities (22,801) (17,424)
--------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 65,713 (58,537)
Cash and cash equivalents, at
beginning of year 146,674 288,015
--------- ---------
CASH AND CASH EQUIVALENTS, AT
END OF QUARTER $ 212,387 229,478
========= =========
MICRONETICS WIRELESS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1. In the opinion of the Company, the accompany-
ing unaudited consolidated condensed financial
statements contain all adjustments (consisting
of only normal recurring adjustments) which in
the opinion of management are necessary in order
to present fairly the financial position as of
June 30, 1996 and 1995, the results of
operations for the three month periods ended
June 30, 1996 and 1995 and cash flows for the
three month periods ended June 30, 1996 and
1995.
While the Company believes that the disclosures
presented are adequate to make the information
not misleading, it is suggested that these
consolidated condensed financial statements be
read in conjunction with the Company's Annual
Report on Form 10-KSB for its fiscal year ended
March 31, 1996.
The results of operations for the three month
period ended June 30, 1996 are not necessarily
indicative of the results of the full year.
Note 2. Inventories are summarized below:
June 30, 1996 March 31, 1996
Raw materials and
work-in-process $626,529 $649,657
Finished goods 214,720 184,552
------- -------
Total $841,249 $834,209
======= =======
Item 2. Management's Discussion and Analysis
Results of Operations
The Company had revenues of $848,847 and $842,663 for the three
months ended June 30, 1996 and 1995, respectively, an increase of
$6,184 in the current period. Gross profit as a percent of net sales
increased to 43.3% during the current period as compared to 41.1%
during the corresponding period of the prior fiscal year. This was
largely a reflection of increased sales of commercial products for
wireless communications systems. Selling, general and administrative
expenses as a percent of net sales for the current period was 25.9%
as compared to 24.6% for the corresponding year earlier period.
Research and development expenses were 5.2% of net sales during the
current period as compared to 4.8% of net sales a year ago.
The Company had net income of $62,272, or $.02 per share, as
compared to net income of $59,834, or $.02 per share, for the three
month periods ended June 30, 1996 and 1995, respectively. This is an
increase of $2,438 or 4.1% in the current period. The weighted
average shares outstanding for the three months ended June 30, 1996
were 3,268,858 as compared to 3,052,831 in the year earlier period.
Financial Condition
The Company's working capital at June 30, 1996 was $1,899,665,
an increase of $71,083 from $1,828,582, the working capital at March
31, 1996. The Company's current ratio was approximately 5.5 to 1 at
June 30, 1996; it was approximately 4.8 to 1 at March 31, 1996.
Net cash of $115,208 was provided by operating activities during
the three months ended June 30, 1996 as compared to $16,294 of cash
utilized during the year earlier period. This was primarily due to
a decrease in accounts receivable and accounts payable during the
quarter, as compared to an increase in such receivables and
payables during the year earlier period. Net cash utilized by
investing activities during the three months ended June 30, 1996 was
$26,694 as compared to net cash utilized by investing activities of
$24,819 during the year earlier period. This use of cash was
primarily due to the Company's purchase of equipment during both
periods. Net cash utilized by financing activities during the three
months ended June 30, 1996 was $22,801, as compared to $17,424 of
cash provided during the year earlier period. The primary use of
cash was to reduce debt in both periods. As a result of these
activities, the Company's cash position increased by $65,713 during
the current three months as compared to a decrease of $58,537 in the
year ago period.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) During the quarter ended June 30, 1996, the registrant did
not file any reports on Form 8-K.
SIGNATURE
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MICRONETICS WIRELESS, INC.
(Registrant)
Dated: August 2, 1996 By: s/Richard S. Kalin
Richard S. Kalin,
President (Principal Executive
and Financial Officer)
micro\10-Q-JUN.96