SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 Q/A -2
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _______________
Commission file number 1-11916
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WIRELESS TELECOM GROUP, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-2582295
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
East 64 Midland Avenue
Paramus, New Jersey 07652 07652
(Address of principal executive offices) (Zip Code)
(201) 261-8797
Registrant's telephone number, including area code
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the most recent practicable date.
Common Stock - Par Value $.01 Class 17,557,298
Outstanding Shares
At October 28, 1998
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Operating activities provided $3,405,807 in cash flow for the comparable period
in 1997. Cash provided from operations was primarily due to net income offset by
increases in accounts receivable and inventory.
Net cash used for investing activities for the nine month periods ending
September 30, 1998 and 1997 were $949,506 and $1,067,282, respectively. Capital
expenditures for the Company's increasing product line and workforce were the
primary use of funds. In addition, in 1997 funds were used for premiums on life
insurance for certain of the Company's officers and other key employees.
Net cash used for financing activities for the nine month periods ending
September 30, 1998 and 1997 were $668,567 and $2,452,743, respectively. The
payment of quarterly cash dividends were the primary use of these funds. The
Company also reacquired 20,000 shares of its common stock in the open market
during the second quarter of 1997. These cash outlays were partially offset by
proceeds from the exercise of stock options.
On January 26, 1998, the Company announced the declaration of a quarterly cash
dividend of $.05 per share to shareholders of record on March 23, 1998. This
cash dividend aggregated $877,545 and was paid by March 31, 1998.
On May 15, 1998 the Company ceased paying a quarterly cash dividend to instead
reinvest earnings in the Company. The Company paid cash dividends aggregating
$.20 per share for the year ending December 31, 1997.
The Company believes that its financial resources from working capital provided
by operations are adequate to meet current requirements.
IMPACT OF THE YEAR 2000 ISSUE
The Company is in the process of assessing its information technology ("IT") and
non-IT computer systems and operations to identify and determine the extent to
which any such systems will be susceptible to potential malfunctions as a result
of the Year 2000 ("Y2K") problem. The Y2K problem arose because many existing
computer programs use only the last two digits to refer to a particular year,
rather than four. Therefore, these computer programs do not properly recognize a
year that begins with "20" instead of the familiar "19." Any of the Company's
systems utilizing such last two-digit system to refer to a particular year may
not recognize the year 2000; but rather, assume the year to be 1900. This could
potentially result in major system failures or miscalculations, causing
disruption of operations, including, but not limited to, a temporary inability
to process transactions, billing and customer service or to engage in normal
business activities.
The Company is currently upgrading its computer systems and operations to ensure
that all such systems are, or will be prior to January 1, 2000, Y2K compliant.
The Company estimates that it will incur aggregate costs of $60,000 for such
upgrade, of which the Company has incurred $20,000 to date. Such costs will be
borne out of the Company's general working capital funds. There can be no
assurance, however, that the Company will achieve full Y2K compliance before the
end of 1999 or that such costs will not increase.
In addition to assessing its own computer systems and operations, the Company is
currently conducting an external review of its vendors and suppliers. However,
the Company does not believe that its relationship with any one vendor or
supplier is material to the extent that such party's Y2K noncompliance would
have a material adverse effect on the Company's business and operations.
Notwithstanding, the Company may experience problems to the extent that a large
number of its suppliers or vendors are not Y2K compliant, and there can be no
assurance that such problems would not have a material adverse effect on the
Company.
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Although the Company expects, without any assurance, that its computer systems
and operations will be fully Y2K compliant by the end of 1999, the Company does
not currently have any contingency plans in the event they are not, and there
can be no assurance that any effective contingency plans will be developed or
implemented. A failure of the Company to effectively upgrade its computer
systems to become Y2K compliant before the end of 1999 could have a material
adverse effect on the Company's business, financial position and results of
operations. The most reasonably likely worst case scenario would be a systems
failure beyond the control of the Company to remedy. Such failure could
materially prevent the Company from operating its business. The Company believes
that such failure would likely lead to lost revenues, increased operating costs,
loss of customers or other business interruptions of a material nature.
INFLATION AND SEASONALITY
The Company does not anticipate that inflation will significantly impact its
business nor does it believe that its business is seasonal.
OTHER
This report contains forward-looking statements and information that is based on
management's beliefs and assumptions, as well as information currently available
to management. When used in this document, the words "anticipate," "estimate,"
"expect, " "intend," and similar expressions are intended to identify
forward-looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. Such statements are
subject to certain risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize, or should the underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
estimated or expected. Among the key factors that may have a direct bearing on
the Company's operating results are fluctuations in the global economy, the
degree and nature of competition, the risk of delay in product development and
release dates and acceptance of, and demand for, the Company's products.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amended report to be signed on its behalf by
the undersigned thereunto duly authorized.
WIRELESS TELECOM GROUP, INC.
(Registrant)
Date: January 22, 1999 /s/ Demir Richard Eden
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Demir Richard Eden
President
Date: January 22, 1999 /s/ Edward Garcia
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Edward Garcia
Chief Operating Officer
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