SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission file number 0-3207
Barringer Technologies Inc.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
Delaware 84-0720473
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
219 South Street, New Providence, New Jersey 07974
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(908) 665-8200
(Issuer's telephone number)
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF
CHANGED SINCE LAST REPORT)
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:
Common stock, $0.01 par value - outstanding as of August 9, 1996 -
3,506,474 shares
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
INDEX
Part I Financial Information
Item 1. Financial Statements.
- Consolidated Balance Sheets as of June 30, 1996
(unaudited) and December 31, 1995;
- Consolidated Statements of Operations (unaudited)
for the three months and six months ended June 30, 1996
and 1995;
- Consolidated Statements of Cash Flows (unaudited)
for the three months and six months ended June 30, 1996
and 1995;
- Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Signatures
Exhibits
<PAGE>
Item 1. Financial Statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS June 30, Dec. 31,
1996 1995
(unaudited)
Current assets:
Cash $17,000 $43,000
Trade receivables, less
allowances of $90,000 and $41,000 2,658,000 1,533,000
Inventories 1,652,000 1,621,000
Prepaid expenses and other 276,000 250,000
Deferred tax asset 225,000 225,000
----------------------------------------
Total current assets 4,828,000 3,672,000
Property and equipment 558,000 586,000
Investment in unconsolidated subsidiary
(note 4) 355,000 334,000
Other assets 140,000 143,000
----------------------------------------
Total assets $5,881,000 $4,735,000
========================================
See notes to consolidated financial statements.
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY June 30, Dec. 31,
1996 1995
(unaudited)
Current liabilities:
Bank indebtedness and other notes $1,231,000 $744,000
Accounts payable 1,117,000 1,278,000
Accrued liabilities 902,000 723,000
Accrued payroll and related taxes 338,000 257,000
Current portion of long term debt (note 6)300,000 300,000
---------------------------------------
Total current liabilities 3,888,000 3,302,000
Other non-current liabilities 113,000 108,000
---------------------------------------
Total liabilities 4,001,000 3,410,000
---------------------------------------
Shareholders' equity:
Class A convertible preferred
stock, $2.00 par value, 270,000
shares authorized, 74,000 and 83,000
shares outstanding less discount of
$57,000 and $64,000, respectively 91,000 101,000
Class B convertible preferred stock,
$2.00 par value, 730,000 shares
authorized, 233,000 and 258,000 shares 465,000 515,000
outstanding, respectively
Common stock, $.01 par value,
7,000,000 shares authorized, 3,498,000
and 3,479,000 shares outstanding,
respectively 35,000 35,000
Additional paid-in capital 17,765,000 17,685,000
Accumulated deficit (16,003,000) (16,542,000)
Foreign currency translation (460,000) (456,000)
--------------------------------------------
1,893,000 1,338,000
Less: common stock in treasury at cost,
31,000 shares (13,000) (13,000)
--------------------------------------------
Total shareholders' equity 1,880,000 1,325,000
--------------------------------------------
Total liabilities and equity $5,881,000 $4,735,000
============================================
See notes to consolidated financial statements.
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS) (UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------------
1996 1995 1996 1995
-------------------- -----------------------
Revenues from operations $2,658 $1,782 $5,012 $3,110
Cost of sales 1,411 925 2,647 1,892
--------------------- -----------------------
Gross profit 1,247 857 2,365 1,218
---------------------- -----------------------
Operating expenses:
Selling, general
and administrative 832 671 1,641 1,300
Unfunded research
and development 40 70 57 104
--------------------- -----------------------
872 741 1,698 1,404
--------------------- -----------------------
Operating income (loss) 375 116 667 (186)
--------------------- -----------------------
Other income (expense):
Interest (64) (60) (130) (122)
Equity in earnings of Labco 42 - 20 -
Other, net 22 (43) 7 (48)
---------------------- ----------------------
0 (103) (103) (170)
----------------------- ----------------------
Income (loss) from continuing
operations 375 13 564 (356)
Income from operation
held for sale - 54 - 55
------------------------ ---------------------
Net income (loss)
for the period 375 67 564 (301)
Preferred stock dividend
requirements (12) (24) (24) (51)
------------------------ ---------------------
Net income (loss) attributable to
common shareholders $ 363 $43 $540 $ (352)
======================== =====================
Primary Per share data (note 3):
Income (loss) continuing
operations $ 0.10 $ (0.01) $ 0.16 $ (0.13)
Income from operation
held for sale - 0.02 - 0.02
---------------------- ----------------------
Net Income (loss)
per share $ 0.10 $ 0.01 $ 0.16 $ (0.11)
======================= ======================
Fully Diluted Per share data (note 3):
Income (loss) continuing
operations $ 0.10 $ (0.01) $ 0.15 $ (0.13)
Income from operation
held for sale - 0.02 - 0.02
------------------------ ----------------------
Net Income (loss)
per share $ 0.10 $ 0.01 $ 0.15 $ (0.11)
======================== ======================
Weighted average common and
common equivalent shares
outstanding:
Primary 3,489 3,067 3,483 3,060
======================== ======================
Fully diluted 3,489 3,067 3,854 3,060
======================== ======================
See notes to consolidated financial statements.
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS) (UNAUDITED)
Three Months Ended Six Months Ended June
June 30, 30,
--------------------- ---------------------
OPERATING ACTIVITIES 1996 1995 1996 1995
--------------------- ---------------------
Net Income (loss) $375 $67 $564 $(301)
Items not affecting cash:
Depreciation/amortization 21 77 75 309
(Income) from operation
held for sale - (54) - (55)
Equity in (earnings) of Labco(42) - (20) -
Other (76) 72 19 81
Decrease (increase) in non-cash
working capital balances (268) (582) (1,083) (695)
--------------------- -----------------------
Cash provided by (used in)
operating activities 10 (420) (445) (661)
--------------------- -----------------------
INVESTING ACTIVITIES
Purchase of equipment and other (21) (80) (47) (262)
Increase in investment in
operation held for sale (21) (133) (21) (133)
--------------------- ----------------------
Cash (used in)
investing activities (42) (213) (68) (395)
--------------------- ----------------------
FINANCING ACTIVITIES
Proceeds on sale of securities
and other - 905 - 905
Increase (reduction) in
bank debt and other - 34 487 210
-------------------- ---------------------
Cash provided by
financing activities 0 939 487 1,115
-------------------- ---------------------
Increase (decrease) in cash (32) 306 (26) 59
Cash at beginning of period 49 20 43 267
---------------------- ---------------------
Cash at end of period $17 $326 $ 17 $326
====================== =====================
CHANGES IN COMPONENTS OF NON-
CASH WORKING CAPITAL BALANCES
RELATED TO CONTINUING OPERATIONS
Receivables $ (319) $40 $ (1,125) $(757)
Inventory 3 185 (31) 281
Other current assets (12) (38) (26) (8)
Other assets (27) - - (32)
Accounts payable and
accrued expenses 87 (769) 99 (179)
----------------------- ----------------------
Decrease (increase) in non-
cash working capital balances $(268) $(582) $(1,083) $(695)
======================= ========================
Cash paid during the
period for interest $54 $105 $107 $150
======================= ========================
Cash paid during the
period for income taxes $0 $0 $0 $0
======================= ========================
See notes to consolidated financial statements.
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the unaudited consolidated financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the consolidated financial position of the
Company as of June 30, 1996 and the results of its operations and its cash flows
for the three months and six months ended June 30, 1996 and 1995, respectively.
The accounting policies followed by the Company are set forth in the Notes to
Consolidated Financial Statements in the audited consolidated financial
statements of Barringer Technologies Inc. and Subsidiaries included in its
Annual Report on Form 10-K for the year ended December 31, 1995. This report
should be read in conjunction therewith. The results of operations for the
interim periods are not necessarily indicative of the results to be expected for
the full year.
2. As a result of the Company's history of losses, a valuation allowance has
been provided for all U.S. deferred tax assets and for substantially all of the
Canadian deferred tax assets. The net deferred tax asset relates to the
Company's Canadian subsidiary, which has available tax credits and loss
carryforwards. The Canadian subsidiary has a history of profitability, despite
the consolidated losses of the Company. Based on this history and estimated 1996
earnings, which includes earnings from certain contracts, as well as available
tax planning strategies, management considers realization of the unreserved
deferred tax asset more likely than not.
3. Earnings (loss) per share is computed by dividing net income (loss), less
preferred stock dividend requirements, by the weighted average number of common
and common equivalent shares outstanding during the period. Common equivalent
shares consist of the dilutive effect, if any, of unissued shares under options
and warrants, computed using the treasury stock method (using the average stock
prices for primary basis and the higher of average or period end stock prices
for fully-diluted basis). In applying the treasury stock method, the provisions
of Accounting Principles Board Opinion 15, paragraph 38 were considered and had
a dilutive effect on the fully-diluted earnings per share calculation for the
six months ended June 30, 1996. The effect of this provision is to limit the
amount of shares purchased under the treasury stock method to 20% of outstanding
shares and apply the excess proceeds to reduce borrowings and related interest
expense.
4. The Company maintains a 26% interest in Barringer Laboratories, Inc. and
accounts for this investment on the equity method.
<PAGE>
The following is the condensed results of operations and condensed
balance sheet for Labco.
Condensed Results of Operations
(in $000's)
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- -----
Revenues 1,675 1,647 2,971 3,089
Cost of revenues 1,124 1,141 2,135 2,222
----- ----- ----- -----
Gross profit 551 506 836 867
Expenses 387 391 758 749
----- ----- ----- ------
Net income 164 115 78 118
====== ====== ======= ======
Condensed Balance Sheet
As of June 30, 1996
(In $000's)
Current assets 1,301
Property and equipment 482
Other assets 52
-------
Total assets 1,835
Current liabilities 625
Long-term debt 122
Equity 1,088
-----
Total liabilities and equity 1,835
5. The Company's Agreement with the Toronto-Dominion Bank contains certain
covenants which the Company's Canadian subsidiary must meet. At June 30, 1996,
certain of the financial covenants were not met. The Company has periodically
failed to meet various of the covenants, but the Bank has continued to provide
funding in accordance with past practices. Management believes the Company will
re-establish compliance. If the Company continues to periodically fail to comply
with the terms of the facility, management believes the Bank will continue to
provide funding in accordance with past practices, however, the Company cannot
predict what actions, if any, the Bank may take or as to the timing thereof.
6. Subsequent Event - On July 10, 1996, the Company completed the sale of
$1,000,000 of its 6% Convertible Subordinated Debentures, due 1997, in a private
transaction to institutional and private investors and members of management.
The Debentures are due July 9, 1997 and are convertible into shares of the
Company's Common Stock at the rate of $2.75 per share of Common Stock. Interest
is payable semi-annually.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended June 30, 1996 Compared To Quarter ended June 30, 1995
Sales of all instruments increased by $936,000, or 58.1% in the second
quarter of 1996 compared to the second quarter of 1995. Sales of Ionscan
instruments and related products increased by approximately $661,000, or 44.1%,
in the second quarter of 1996 compared to the second quarter of 1995, on
increased unit sales of approximately 56%. This was due to increased sales of
the Model 400 which was introduced in the first quarter of 1995. Management
believes the increased sales resulted from an expanded market, coupled with the
Model 400 having a lower selling price than its predecessor Model 350, and being
smaller, lighter and containing more features. In addition, the Company has been
successful in adapting its units to suit customer needs in order to increase
unit sales. Sales of instruments other than Ionscan products increased by
approximately $275,000, or 243% in the second quarter of 1996 compared to the
second quarter of 1995, principally due to the award in 1995 of the heavy water
analyzer contract, which was substantially completed in the second quarter of
1996.
Revenues of the research and development business decreased by
approximately $57,000, or 40.4% in the second quarter of 1996 compared to the
second quarter of 1995. The reduced revenues are attributable to reduced work
performed under the Company's contract with the Emergencies Science Division,
Environment Canada to design and build an airborne laser-fluorosensor system The
contract had an original value of approximately $1,450,000, with a substantial
portion of that contract being billed in 1995.
The Company's Consumer products business, formed in March 1995, did not
achieve significant sales during the second quarter of 1996. After limited
market testing of its DrugAlert[TM] product, it became apparent that a
successful marketing program has to overcome certain barriers that exist
relating to the consumer's reluctance to purchase the product. Although
management believes that the product has good potential it has not yet been able
to formulate an effective marketing strategy nor has management made the
determination that it will pursue developing this product in the future. In the
meantime, it is proceeding with limited distribution.
Gross profit for all businesses as a percentage of sales for the
quarter ended June 30, 1996 decreased from 48.1% to 46.9% over the same period
last year. The gross profit as a percentage of sales for the Instruments
business decreased from 52.6% in the second quarter of 1995 to 50.5% in the
second quarter of 1996. The decrease was attributable to reduced unit sales of
the Model 350 IONSCAN in the second quarter of 1996 at lower selling prices,
compared to the second quarter of 1995 which had higher unit sales at higher
selling prices. The gross profit as a percentage of sales for the Research and
Development business decreased to a negative 33.3.0% in the quarter from a
negative 12.8% in the same period in 1995. The decrease was due to the reduced
volume in that segment of the business. The results of the Consumer Products
Business were not significant.
Selling, general and administrative expenses increased by approximately
$161,000, or 24.0% in the second quarter of 1996 over the same period in 1995.
However, in the second quarter of 1995, the Company recognized an expense
decrease of $152,000 attributable to a negotiated reduction in professional
fees. Therefore, without respect to such reduction, selling, general and
administrative expenses would have increased by $9,000. Selling expenses
increased by $52,000, or 11.9% period to period. The increase is attributable to
increased levels of sales.
<PAGE>
Unfunded research and development in the second quarter of 1996,
applied to IONSCAN(R) technology, decreased by approximately $30,000, or 42.9%
from the second quarter of 1995. The level of unfunded research and development
engaged in by the Company is primarily a function of the resources, both
financial and personnel, that are available at the time.
Interest expense increased by approximately $4,000 in the second
quarter of 1996, or 6.7% over the same period last year. The increase is the
result of higher levels of borrowing, at higher interest rates.
Income on unconsolidated subsidiary represents the Company's share of
the earnings and losses of Barringer Laboratories Inc. ("Labco") of which the
Company has a twenty-six percent ownership. Prior to December 31, 1995, the
Company had a controlling interest in Labco and consolidated it into its own
operations but since the first quarter of 1995 has presented Labco as an
operation held for sale. Fluctuations in earnings and losses are dependent upon
the performance of Labco and is not influenced by the Company. The Company's
share of Labco's net income for the second quarter of 1996 was $42,000 as
compared to $54,000 for the same period in 1995 where it is shown under the
caption "Income from operation held for sale".
Other expense, net of income was $22,000 for the second quarter of 1996
compared to other income, net of expense of $43,000 for the same period last
year. In the second quarter of 1995 changes in exchange rates generated income
of $50,000 as compared to $2,000 for the second quarter of 1996. In addition,
for the second quarter of 1996, the Company recognized gains of approximately
$42,000 on trading securities held for pension funding purposes. The balance of
the differences relate to several different accounts of income and expense that
may not recur from year to year.
Six months ended June 30, 1996 Compared To six months ended June 30, 1995
Sales of all instruments increased by $2,022,000, or 84.4% in the six
months ended June 30, 1996 compared to the same period in 1995. Sales of Ionscan
instruments and related product increased by approximately $1,676,000, or 77.1%,
in the six months ended June 30, 1996 compared to the same period in 1995, on
increased unit sales of approximately 73%. This was due to increased sales of
the Model 400 which was introduced in the first quarter of 1995. Management
believes the increased sales resulted from an expanded market, coupled with the
Model 400 having a lower selling price than its predecessor Model 350, and being
smaller, lighter and containing more features. In addition, the Company has been
successful in adapting its units to suit customer needs in order to increase
unit sales. Sales of instruments other than Ionscan products increased by
approximately $346,000, or 155% in the six months ended June 30, 1996 compared
to the same period in 1995, principally due to work performed on the heavy water
analyzer contract, which was substantially completed by June 30, 1996. In
addition the Company was successful in selling several of its other non-Ionscan
instruments.
Revenues of the research and development business decreased by
approximately $145,000, or 21.2% in the six months ended June 30, 1996 compared
to the same period in 1995. The reduced revenues are attributable to reduced
work performed under the Company's contract with the Emergencies Science
Division, Environment Canada to design and build an airborne laser-fluorosensor
system The contract had an original value of approximately $1,450,000, with a
substantial portion of that Contract being billed in 1995.
<PAGE>
The Company's Consumer products business, formed in March 1995, did not
achieve significant sales during the first six months of 1996. After limited
market testing of its DrugAlert[TM] product, it became apparent that a
successful marketing program has to overcome certain barriers that exist
relating to the consumer's reluctance to purchase the product. Although
management believes that the product has good potential it has not yet been able
to formulate an effective marketing strategy nor has management made the
determination that it will pursue this product in the future. In the meantime,
it is proceeding with limited distribution.
Gross profit for all businesses as a percentage of sales for the six
months ended June 30, 1996 increased to 47.2% from 39.2% in the same period last
year. The gross profit as a percentage of sales for the Instruments business
increased to 52.7% for the six months ended June 30, 1996 as compared to 49.4%
for the same period in 1995. The increase was attributable to better margins on
custom sales orders and a better international mix of sales, coupled with
larger, more efficient production runs. The sale of several Model 350 units,
whose carrying value had been reduced in 1995, also contributed to the
improvement. The gross profit as a percentage of sales for the Research and
Development business improved to 8.3% for the six months ended June 30, 1996 as
compared to 1.0% for the same period in 1995. The improvement was due to several
small contracts that carried high gross profit margins during the first quarter
of 1996. The Consumer Products Business did not contribute any gross profit.
Selling, general and administrative expenses increased by approximately
$341,000, or 26.2% for the six months ended June 30, 1996 as compared to the
same period in 1995. However, in the 1995 period the Company recognized an
expense decrease of $152,000 attributable to a negotiated reduction in
professional fees. Therefore, without respect to such reduction, selling general
and administrative expenses would have increased by $189,000. Selling expenses
increased by $256,000, or 34.3% period to period. Most of the increase is
attributable to the expenses associated with the Company's French and United
Kingdom offices being open for a six month period in 1996, at full staffing
levels. The balance of the increase is attributable to increased levels of sales
activity in Canada and the United States and marketing expenses associated with
the DrugAlert(TM) product, which marketing expenses were significantly reduced
as of July 1, 1996.
Unfunded research and development in the first six months of 1996,
applied to IONSCAN(R) technology, decreased by approximately $47,000, or 45.2%
from the first six months of 1995. The level of unfunded research and
development engaged in by the Company is primarily a function of the resources,
both financial and personnel, that are available at the time.
Interest expense increased by approximately $8,000 in the six months
ended June 30, 1996, or 6.6% over the same period last year. The increase is the
result of higher levels of borrowing, at higher interest rates.
Income on unconsolidated subsidiary represents the Company's share of the
earnings and losses of Labco, of which the Company has a twenty-six percent
ownership. Prior to December 31, 1995, the Company had a controlling interest in
Labco and consolidated it into its own operations, but since the first quarter
of 1995, has presented Labco as an operation held for sale. Fluctuations in
earnings and losses is dependent upon the performance of Labco and is not
influenced by the Company. The Company's share of Labco's net income for the six
months ended June 30, 1996 was $20,000 as compared to $55,000 for the same
period in 1995 where it is shown under the caption "Income from operation held
for sale".
Other income, net of expense was $7,000 for the six months ended June
30, 1996 as compared to other expense, net of income of $48,000 for the same
<PAGE>
period last year. In the six months ended June 30, 1995 changes in exchange
rates generated income of $55,000 as compared to $14,000 for the same period in
1996. In addition, for the six months ended June 30, 1996, the Company
recognized gains of approximately $42,000 on trading securities held for pension
funding purposes. The balance of the differences relate to several different
accounts of income and expense that may not recur from year to year.
Capital Resources and Liquidity
Operating Activities
For the six months ended June 30, 1996, cash used in operating activities
was $445,000. This was composed of cash generated from operating results of
$638,000, offset by $1,083,000 used to fund non-cash working capital balances,
primarily higher levels of trade receivables. The higher level of trade
receivables was the result of higher levels of sales occurring towards the end
of the second quarter of 1996. The working capital requirements of the Company
will increase as the Company's sales and production levels increase.
Investment Activities
Purchases of fixed assets for the six months ended June 30, 1996, were
$47,000. The Company does not currently anticipate the need for significant
purchases of fixed assets during the remainder of 1996.
Pursuant to the terms of a Stock Purchase Agreement, dated December 8,
1995, between the Company and Labco, on December 13, 1995 the Company sold to
Labco 647,238 shares of Labco's common stock for an aggregate purchase price of
$809,000. The purchase price consisted of $300,000 in cash, cancellation of all
amounts owed by the Company to Labco pursuant to certain intercompany agreements
and cancellation of $57,000 in accounts receivable due to Labco. The proceeds
were added to working capital. The Company continues to own approximately 26% of
Labco's common stock outstanding. The Company anticipates that it will divest
itself of its remaining investment in Labco, as conditions may allow.
Financing Activities
For the six months ended June 30, 1996, the Company increased its
borrowings under its credit facilities by $487,000. At June 30, 1996, the
Company had available unused lines of credit of $250,000, to the extent of
available collateral. During July 1996, the Company's foreign subsidiaries
factored approximately $380,000 of its receivables. The proceeds were added to
working capital.
On July 10, 1996, the Company completed the sale of $1,000,000 of its
6% Convertible Subordinated Debentures, due July 9, 1997. The Debentures are
convertible into shares of the Company's Common Stock at the rate of $2.75 per
share of Common Stock. The Company utilized $300,000 of the proceeds to pay the
balance due on its 12 1/2% Convertible Subordinated Debentures, maturing July
15, 1996. The remaining proceeds were added to working capital.
Both the Company and its Canadian subsidiary have substantial tax loss and
research and
<PAGE>
development tax credit carryforwards to offset future tax liabilities.
The Company has been experiencing cash flow shortages since mid-1994.
This is the result of the need for capital to support higher levels of accounts
receivable and inventory caused primarily by uneven sales patterns during the
quarters. This situation was exacerbated, in 1995, by the Company's converting
its production from its Model 350 IONSCAN(R) to its newly introduced Model 400
IONSCAN(R). The Company needs additional amounts of capital in order to proceed
with product and applications development. During 1995 and the first six months
of 1996, the Company did not generate positive cash flow from operations despite
achieving net income of $564,000 for the six months ended June 30, 1996. If
additional capital is required in the future in excess of cash generated by
operations, the Company presently intends to raise such additional capital
through the sale of its equity and/or debt securities and/or the sale of the
remaining stock in its 26% ownership in Labco. However, there can be no
assurances that the Company will be able to raise the needed capital or as to
the terms or timing thereof.
The Company's Agreement with the Toronto-Dominion Bank contains certain
covenants which the Company's Canadian subsidiary must meet. At June 30, 1996,
certain of the financial covenants were not met. The Company has periodically
failed to meet various of the covenants, but the Bank has continued to provide
funding in accordance with past practices. Management believes the Company will
re-establish compliance. If the Company continues to periodically fail to comply
with the terms of the facility, management believes the Bank will continue to
provide funding in accordance with past practices, however, the Company cannot
predict what actions, if any, the Bank may take or as to the timing thereof.
Inflation
Inflation was not a material factor in either the sales or the
operating expenses of the Company during the periods presented herein.
Disclosure Regarding Forward Looking Statements
Certain information in this Form 10-QSB contains forward looking statements
within the meaning of Section 27A of the Securities Act and 21E of the Exchange
Act. Such statements include, but are not limited to, the Company's
opportunities to increase sales through, among other things, the development of
new applications and markets for its Ionscan equipment and technology, the
probability of the Company's future success with its DrugAlert[TM] product line,
exposure to fluctuations in foreign currencies and periodic liquidity and
capital requirements. Forward looking statements are inherently subject to risks
and uncertainties, many of which cannot be predicted with accuracy and some of
which might not even be anticipated. Future events and actual results, financial
and otherwise, could differ materially from those set forth in or contemplated
by the forward looking statements herein. Important factors that could
contribute to such differences include, the effect of economic and market
conditions on the Company, the impact of both foreign and domestic governmental
budgeting decisions and the timing thereof, the ability of the Company to
successfully develop and market current products and new product applications
and the ability of the Company to comply with the covenants of its loan
agreements as well as certain other risks described elsewhere herein. Subsequent
written and oral forward looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
cautionary statements in this paragraph and elsewhere in this Form 10-QSB.
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
PART II
OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1A The Company's Certificate of Incorporation, as amended.(1)
3.2A By-laws of the Company.(2)
11 Earnings Per Share.
27 Financial Data Schedule.
____________________________
(1) Incorporated by reference to the identically numbered exhibit to the
Registrant's Registration Statement on Form S-1, File No. 33-031626.
(2) Incorporated by reference to the identically numbered exhibit to the
Registrant's Registration Statement on Form S-1, File No. 33-43094.
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
SIGNATURES
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.
BARRINGER TECHNOLOGIES INC.
(Registrant)
/S/ STANLEY S. BINDER
Stanley S. Binder
President,
/S/ RICHARD S. ROSENFELD
Richard S. Rosenfeld, Chief
Financial Officer (Principal
Accounting Officer)
Date: August 13, 1996
<PAGE>
BARRINGER TECHNOLOGIES INC.
INDEX TO EXHIBITS
Exhibit Number Page No.
11 Earnings Per Share 21
27 Financial Data Schedule 22
<PAGE>
EXHIBIT 11
BARRINGER TECHNOLOGIES INC.
EARNINGS PER SHARE
<TABLE>
<CAPTION>
PRIMARY PER SHARE FULLY-DILUTED PER SHARE
-----------------------------------------------------------------------------------------
Three months Six months ended Three months Six months ended
ended June 30, June 30, ended June 30, June 30,
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ---- ----
Income (loss) to from continuing operations $ 375 $ 13 $ 564 $(356) $ 375 $ 13 $ 564 $ (356)
Income (loss) from operation held for sale -- 54 -- 55 -- 54 -- 55
Preferred dividend requirements (12) (24) (24) (51) -- (24) -- (51)
Interest adjustment (2) -- -- -- -- -- -- 17 --
--------------------------------------------------------------------------------
$ 363 $ 43 $ 540 $(352) $ 375 $ 43 $ 581 $(352)
=================================================================================
Weighted average shares outstanding 3,489 3,067 3,484 3,060 3,489 3,067 3,485 3,060
Assumed exercise of outstanding options and
warrants (1) n/a n/a n/a n/a n/a n/a 958 n/a
Assumed conversion of preferred stock n/a n/a n/a n/a n/a n/a 105 n/a
Assumed repurchase (treasury stock method)(1) n/a n/a n/a n/a n/a n/a (693) n/a
-----------------------------------------------------------------------------
Revised share basis 3,489 3,067 3,484 3,060 3,489 3,067 3,855 3,060
==============================================================================
Earnings per share:
Continuing operations $ 0.10 $ (0.01) $ 0.16 $ (0.13) $ 0.11 $ (0.01) $ 0.15 $ (0.13)
Income from operations held for sale - 0.02 - 0.02 - 0.02 - 0.02
-------------------------------------------------------------------------------
Net income (loss) per share $ 0.10 $ 0.01 $ 0.16 $ (0.11)$ 0.11 $ 0.01 $ 0.15 $ (0.11)
===============================================================================
_____________________
1) Pursuant to APB 15, paragraph 38, all outstanding options and warrants
are assumed to have been exercised and the shares repurchased under the treasury
stock method have been limited to 20% of the June 30, 1996 outstanding shares.
The effect of this computation is not dilutive in periods for which the
computation is not presented.
2) Proceeds from the assumed exercise of options and warrants, in excess of
that required to repurchase the amount of shares equal to 20% of the June 30,
1996 outstanding shares, has been applied to reduce outstanding borrowings and
related interest expense.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM BARRINGER TECHNOLOGIES INC.'S
FORM 10-QSB FOR THE QUARTER ENDED JUNE 30, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1996
<PERIOD-END> JUN-30-1996
<PERIOD-TYPE> 6-MOS
<EXCHANGE-RATE> 1
<CASH> 17
<SECURITIES> 0
<RECEIVABLES> 2,748
<ALLOWANCES> 90
<INVENTORY> 1,652
<CURRENT-ASSETS> 4,828
<PP&E> 2,154
<DEPRECIATION> 1,596
<TOTAL-ASSETS> 5,881
<CURRENT-LIABILITIES> 3,888
<BONDS> 0
0
556
<COMMON> 35
<OTHER-SE> 1,289
<TOTAL-LIABILITY-AND-EQUITY> 5,881
<SALES> 5,012
<TOTAL-REVENUES> 5,012
<CGS> 2,647
<TOTAL-COSTS> 1,698
<OTHER-EXPENSES> (27)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 130
<INCOME-PRETAX> 564
<INCOME-TAX> 0
<INCOME-CONTINUING> 564
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 564
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.15
</TABLE>
