FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
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, 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 and 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 latest practical date.
3,966,317 shares of common stock, par value $.01 per share as
of July 31, 2000.
Page 1 of 12. There is no Exhibit Index.
MICRONETICS WIRELESS, INC.
INDEX
Page No.
Part I. Financial Information:
Item 1. Financial Statements.
Consolidated Condensed Balance
Sheets - June 30, 2000 and March 3-4
31, 2000
Consolidated Condensed Statements
of Operations - Three Months Ended
June 30, 2000 and June 30, 1999 5
Consolidated Condensed Statement 6-7
of Cash Flows - Three Months Ended
June 30, 2000 and June 30, 1999
Notes to Consolidated Condensed 8
Financial Statements
Item 2. Management's Discussion and Analysis
or Plan of Operation. 9-10
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K. 11
Signature 12
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
MICRONETICS WIRELESS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
Assets
June 30, March 31,
2000 2000
CURRENT ASSETS:
Cash $1,307,119 $1,424,988
Receivables
Trade (net of allowance for
doubtful accounts) 1,085,365 1,007,134
Inventories (note 2) 2,218,145 2,082,964
Prepaid expenses and other
current assets 76,086 52,553
Deferred tax asset 174,512 185,222
Other current assets 70,438 679,111
TOTAL CURRENT ASSETS 4,931,665 4,820,772
FIXED ASSETS
Land 162,000 162,000
Building & Improvements 861,843 855,969
Furniture, Fixtures, and
Equipment 2,067,027 2,026,007
Capitalized Leases 143,703 143,703
Gross Fixed Assets 3,234,573 3,187,679
Accumulated Depreciation
and Amortization 1,643,095 1,591,111
TOTAL (NET) FIXED ASSETS 1,591,478 1,596,568
OTHER ASSETS
Deposits 4,488 4,488
Intangibles (Net of
Amortization) 119,362 122,378
Goodwill 328,945 328,945
TOTAL OTHER ASSETS 452,795 455,811
TOTAL ASSETS $6,975,938 $6,873,151
MICRONETICS WIRELESS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
Liabilities and Shareholders' Equity
June 30, March 31,
2000 2000
CURRENT LIABILITIES:
Short-term loans and capitalized
leases $ 178,678 $ 203,287
Accounts payable 264,575 366,104
Accrued expenses and taxes, other
than income taxes 217,316 166,199
Income taxes payable 19,629 7,389
TOTAL CURRENT LIABILITIES 680,198 742,979
LONG-TERM DEBT:
Notes payable - Bank 693,775 703,362
TOTAL LONG-TERM DEBT 693,775 703,362
SHAREHOLDER'S EQUITY:
Common stock 39,652 39,419
Additional paid - in capital 3,401,731 3,356,870
Retained earnings 2,160,582 2,030,521
Treasury stock - -
TOTAL SHAREHOLDERS' EQUITY 5,601,965 5,426,810
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $6,975,938 $6,873,151
MICRONETICS WIRELESS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended June 30,
2000 1999
Operating revenues $1,498,822 $1,342,916
Cost of operations 946,199 817,236
Gross profit 552,623 525,680
Selling, general and
administrative expenses 345,947 357,151
Research & development 62,461 30,129
Operating income 144,215 138,400
Other income (expense):
Rental income 21,400 16,050
Interest income 11,800 8,980
Interest (expense) (15,336) (19,391)
Other income (expense) (9,148) 5,902
Total 8,796 11,541
Income before provision
for income taxes 153,011 149,941
Provision for income taxes 22,950 50,000
Net income $ 130,061 $ 99,941
Net income per share $ 0.03 $ 0.03
Weighted average number
of shares outstanding 4,184,567 3,765,640
MICRONETICS WIRELESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended June 30,
2000 1999
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS:
Cash flows from operating
Activities:
Net income $130,061 $ 99,941
Adjustments to reconcile net
income to net cash provided
by operating activities:
Decrease in deferred tax asset 10,710 18,102
Depreciation and amortization 51,983 57,108
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable, inventories, prepaid
expenses and other current assets (239,472) (202,657)
(Increase) decrease in security
deposits and other assets 3,016 765
(Decrease) increase in accounts
payable, accrued liabilities,
notes payable and other current
liabilities (38,172) 1,478
Net cash provided (utilized)
by operating activities $(81,874) $(25,263)
MICRONETICS WIRELESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.)
(UNAUDITED)
Three Months Ended June 30,
2000 1999
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS:
Cash Flows from Investment
Activities:
(Additions) to fixed assets $ (46,894) $ (15,950)
Net cash provided (used) by
investment activities $ (46,894) (15,950)
Cash Flows from Financing
Activities:
(Reduction) increase of debt
and capitalized leases (34,196) (47,643)
Purchase of treasury shares - (38,615)
Proceeds from stock options
exercised 45,094 6,750
Net cash provided (used)
by financing activities $ 10,899 $ (79,508)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ (117,869) $ (120,721)
Cash and cash equivalents, at
beginning of year 1,424,988 1,164,661
CASH AND CASH EQUIVALENTS, AT
END OF QUARTER $1,307,119 $1,043,940
MICRONETICS, WIRELESS, INC.
NOTES TO CONSOLIDATED 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, 2000 and 1999, the results of
operations for the three month periods ended
June 30, 2000 and 1999 and cash flows for the
three month periods ended June 30, 2000 and
1999.
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, 2000.
The results of operations for the three month
period ended June 30, 2000 are not necessarily
indicative of the results of the full year.
Note 2. Inventories are summarized below:
June 30, 2000 March 31, 2000
Raw materials and
work-in-process $2,013,929 $1,882,992
Finished goods 204,216 199,972
Total $2,218,145 $2,082,964
Item 2. Management's Discussion and Analysis or Plan of
Operation.
Results of Operations
The Company had revenues of $1,498,822 and $1,342,916 for the
three months ended June 30, 2000 and 1999, respectively, an
increase of $155,876 or 11.6% in the current period. Gross profit
as a percent of net sales declined to 36.9% in the current period
from 39.1% during the corresponding period of the prior fiscal
year. This was due primarily to product mix, the move of our VCO
Products Group to a new facility and to the shipment of first units
on certain orders of the Components Group. Selling, general and
administrative expenses as a percent of net sales for the current
period decreased to 23.1% from 25.1% during the corresponding
period a year ago. Research and development expenses increased to
4.1% of net sales during the current period as compared to 2.2% of
net sales a year ago.
The Company had net income of $130,001, or $.03 per share, as
compared to net income of $99,941, or $.03 per share, for the three
month periods ended June 30, 2000 and 1999, respectively. The
weighted average shares outstanding for the three months ended June
30, 2000 and 1999, were 4,184,567 and 3,765,640, respectively.
Financial Condition
The Company's working capital at June 30, 2000 was $4,251,467,
an increase of $173,674 from $4,077,793, the working capital at
March 31, 2000. The Company's current ratio was approximately 7.25
to 1.0 at June 30, 2000; it was approximately 6.5 to 1.0 at March
31, 2000.
Net cash of $81,874 was used for operating activities during
the three months ended June 30, 2000 as compared to $25,263 that
was used by operating activities during the year earlier period.
Net cash used by investing activities during the three months ended
June 30, 2000 was $46,894 as compared to $15,950 during the year
earlier period. This was due to the purchase of more new equipment
during the current period. Net cash provided by financing
activities during the three months ended June 30, 2000 was $10,899
as compared to the use of $79,508 during the year earlier period.
This was largely due to the exercise of an increased number of
stock options in the current period as contrasted with the purchase
of treasury stock last year. As a result of these activities, the
Company's cash position decreased by $117,869 during the current
three months as compared to a reduction of $120,721 in the year ago
period.
Safe Harbor Statement
Statements which are not historical facts, including
statements about the Company's confidence and strategies and its
expectations about new and existing products, technologies and
opportunities, market and industry segment growth, demand and
acceptance of new and existing products are forward looking
statements that involve risks and uncertainties. These include,
but are not limited to, product demand and market acceptance risks;
the impact of competitive products and pricing; the results of
financing efforts; the loss of any significant customers of any
business; the effect of the Company's accounting policies; the
effects of economic conditions and trade, legal, social, and
economic risks, such as import, licensing, and trade restrictions;
the results of the Company's business plan and the impact on the
Company of its relationship with its lender. This report should be
read in conjunction with the Company's Annual Report on Form 10-KSB
for its fiscal year ended March 31, 2000.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 Certificate of Incorporation of the Company, as amended,
incorporated by reference to Exhibit 3.1 to Registration
Statement No. 33-16453 (the "Registration Statement").
3.2 By-Laws of the Company incorporated by reference to
Exhibit 3.2 of the Registration Statement.
27 Financial Data Schedule.
(b) Reports on Form 8-K
During the quarter ended June 30, 2000, the registrant did not
file any reports on Form 8-K.
SIGNATURE
Pursuant to the requirements 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.
MICRONETICS WIRELESS, INC.
(Registrant)
Dated: August 1, 2000 By:/s/Richard S. Kalin
Richard S. Kalin,
President (Principal
Executive Officer)