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, 1997
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
INCORPORATION) NUMBER)
219 South Street, Murray Hill, 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 registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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
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 8, 1997 - 5,475,179
shares
Transitional Small Business Disclosure Format (check one): Yes ; No X
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
INDEX
Page No.
Part I Financial Information
Item 1. Financial Statements
- Consolidated Balance Sheets as of June 30, 1997
(unaudited) and December 31, 1996 3
- Consolidated Statements of Operations (unaudited)
for the three months and six months ended
June 30, 1997 and 1996 5
- Consolidated Statements of Cash Flows (unaudited)
for the three months and six months ended June 30,
1997 and 1996 6
- Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis 8
Part II Other Information:
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Exhibits 16
<PAGE>
Item 1. Financial Statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS June 30, Dec. 31,
1997 1996
(unaudited)
Current assets:
Cash and cash equivalents $3,896,000 $5,276,000
Marketable securities 4,055,000 4,328,000
Trade receivables, less allowances
of $157,000 and $63,000 6,352,000 3,521,000
Inventories 3,424,000 2,270,000
Prepaid expenses and other 495,000 498,000
Deferred tax asset 1,031,000 731,000
------------- ---------
Total current assets 19,253,000 16,624,000
Machinery and equipment, net 1,066,000 595,000
Other assets 66,000 104,000
------------- ----------
Total assets $20,385,000 $17,323,000
============= ===========
See notes to consolidated financial statements.
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY June 30, Dec. 31,
1997 1996
(unaudited)
Current liabilities:
Notes payable $ - $ 174,000
Accounts payable 1,266,000 1,009,000
Accrued liabilities 717,000 536,000
Accrued commissions 446,000 112,000
Accrued payroll and related taxes 410,000 522,000
----------- ----------
Total current liabilities 2,839,000 2,353,000
Other non-current liabilities 121,000 117,000
----------- ----------
Total liabilities 2,960,000 2,470,000
----------- ----------
Stockholders' equity (note 5):
Preferred stock, $2.00 par value, 4,000,000
shares authorized:
270,000 shares designated class A
convertible preferred stock, 58,206 and
60,165 shares outstanding less discount
of $45,000 and $47,000, respectively 71,000 74,000
730,000 shares designated class B
convertible preferred stock, 22,500 and
122,500 shares outstanding, respectively 45,000 245,000
Common stock, $.01 par value, 20,000,000
and 7,000,000 shares authorized,
respectively, 5,470,000 and 5,357,000
shares outstanding, respectively 55,000 54,000
Additional paid-in capital 29,952,000 29,430,000
Accumulated deficit (12,268,000) (14,522,000)
Foreign currency translation (417,000) (415,000)
Treasury stock, at cost, 31,000 shares (13,000) (13,000)
----------- ------------
Total shareholders' equity 17,425,000 14,853,000
---------- ------------
Total liabilities and equity $20,385,000 $17,323,000
================ ==============
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS) (UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1997 1996 1997 1996
------------- -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Revenues $5,816 $2,658 $9,438 $5,012
Cost of revenues 2,494 1,411 3,955 2,647
------------- -------------- ------------ ---------------
Gross profit 3,322 1,247 5,483 2,365
------------- -------------- ------------ ---------------
Operating expenses:
Selling, general and administrative 1,905 832 3,200 1,641
Product development 163 40 338 57
------------- -------------- ------------ ---------------
2,068 872 3,538 1,698
------------- -------------- ------------ ---------------
Operating income 1,254 375 1,945 667
------------- -------------- ------------ ---------------
Other income (expense):
Investment income 115 42 212 42
Interest expense (3) (64) (5) (130)
Equity in earnings of Labco - 42 - 20
Other, net (7) (20) (23) (35)
------------- -------------- ------------ ---------------
105 0 184 (103)
------------- -------------- ------------ ---------------
Income before income tax (benefit) 1,359 375 2,129 564
Income tax benefit (provision) 56 - 131 -
------------- -------------- ------------ ---------------
Net income for the period 1,415 375 2,260 564
Preferred stock dividends (3) (12) (6) (24)
------------- -------------- ------------ ---------------
Net income attributable to common $1,412 $363 $2,254 $540
stockholders
============= ============== ============ ===============
Primary per common share data (note 3):
Primary earnings per common share $ 0.22 $ 0.10 $ 0.36 $ 0.16
============= ============== ============ ===============
Fully diluted earnings per common share $ 0.22 $ 0.10 $ 0.35 $ 0.15
============= ============== ============ ===============
Weighted average common and common equivalent
shares outstanding:
Primary 6,297 3,489 6,176 3,483
============= ============== ============ ===============
Fully diluted 6,418 3,489 6,388 3,854
============= ============== ============ ===============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS) (UNAUDITED)
Three Months Six Months
Ended June 30, Ended June 30,
------------- ----------- ------------- --------------
OPERATING ACTIVITIES 1997 1996 1997 1996
------------- ----------- ------------- --------------
<S> <C> <C> <C> <C>
Net Income $1,415 $375 $2,260 $564
Items not affecting cash:
Depreciation/amortization 40 21 80 75
Deferred tax (benefit) (175) - (300) -
Receivable reserve 94 94
Income from unconsolidated investment - (42) - (20)
Other 41 (76) (13) 19
(Increase) in non-cash working capital balances (1,411) (268) (3,416) (1,083)
---------- ----------- ----------- ----------
Cash provided by (used in) operating 4 10 (1,295) (445)
activities ---------- ----------- ----------- ----------
INVESTING ACTIVITIES
Purchase of equipment and other (140) (21) (513) (47)
Sale of marketable securities 821 273 -
Increase in investment in operation held for sale
- (21) - (21)
---------- ----------- ----------- -----------
Cash provided by (used in) investing 681 (42) (240) (68)
activities
---------- ----------- ----------- -----------
FINANCING ACTIVITIES
Proceeds on sale of securities and other 96 - 264 -
Repayment of stockholder loan 71 71
Payment of dividends on preferred stock (6) (6)
Increase (reduction) in bank debt and - - (174) 487
other
---------- ----------- ----------- -----------
Cash provided by financing activities 161 0 155 487
---------- ----------- ----------- -----------
Increase (decrease) in cash 846 (32) (1,380) (26)
Cash at beginning of period 3,050 49 5,276 43
---------- ----------- ----------- -----------
Cash at end of period $ 3,896 $ 17 $ 3,896 $ 17
========== =========== =========== ===========
CHANGES IN COMPONENTS OF NON-CASH
WORKING CAPITAL BALANCES RELATED TO
CONTINUING OPERATIONS
Receivables $(1,377) $ (319) $ (2,925) $ (1,125)
Inventory (774) 3 (1,154) (31)
Other current assets (257) (12) 3 (26)
Other assets - (27) - -
Accounts payable and accrued liabilities 997 87 660 99
--------- ----------- ---------- ----------
(Increase) in non-cash working capital balances $(1,411) $ (268) $ (3,416) $ (1,083)
========= =========== ========== ===========
Cash paid during the period for interest - $ 54 $ 2 $ 107
========= =========== ========== ==========
Cash paid during the period for income taxes $ 8 $ 0 $ 158 $ 0
========= =========== ========== =========
</TABLE>
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, 1997 and the results of its operations and its cash flows
for the three months and six months ended June 30, 1997 and 1996, 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-KSB for the year ended December 31, 1996. 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
any other interim period or for the full year.
2. As a result of the Company's historical trend of losses, a valuation
allowance has been provided for a substantial portion of the deferred tax
assets. At December 31, 1996, the net deferred tax asset of $731,000, included
approximately $525,000 and $206,000 related to the Company's Canadian and U.S.
operations, respectively. At June 30, 1997, the net deferred tax asset of
$1,031,000 included approximately $525,000 and $506,000 related to the Company's
Canadian and U.S. operations, respectively. Based on historical results and
estimated 1997 and 1998 earnings, which include earnings from certain contracts,
as well as available tax planning strategies, management considers realization
of the unreserved deferred tax asset more likely than not. Additional reductions
to the valuation allowance will be recorded when, in the opinion of management,
the Company's ability to generate taxable income is considered more likely than
not.
3. Net income per share is computed by dividing net income, less preferred stock
dividends, 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). Fully
diluted income per share is computed assuming the conversion of convertible
preferred stock at the beginning of the period or the date of issuance,
whichever is later.
4. On February 28, 1997, the Company's Board of Directors granted options to 13
officers, directors and key employees, to acquire 135,500 shares of the
Company's common stock at $9.375 per share, which was the fair value of the
stock on the date of grant. On April 15, 1997, the Company's Board of Directors
granted an option to 1 key employee, to acquire 5,000 shares of the Company's
common stock at $11.25 per share, which was the fair value of the stock on the
date of grant. In addition, on May 13, 1997, pursuant to the terms of the
Company's Independent Director Plan, options to acquire 12,000 shares of the
Company's common stock at $13.875 per share, which was the fair value of the
stock on the date of grant, were issued to the Company's independent directors.
5. SUBSEQUENT EVENT - On August 7, 1997, the Company filed with the Securities
and Exchange Commission a registration statement relating to a proposed
underwritten public offering by the Company of 2,000,000 shares of its Common
Stock.
<PAGE>
Item 2. Management's Discussion and Analysis
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table sets forth certain income and expense items from the
Company's consolidated statements of operations expressed as a percentage of
revenues for the periods indicated.
<TABLE>
<CAPTION>
Percentage of Revenues
<PAGE>
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
----- ---- ---- -----
<S> <C> <C> <C> <C>
Statement of operations data:
Revenues........................................ 100.0 100.0 100.0 100.0
Cost of revenues................................ 42.9 53.1 41.9 52.8
-------- ---------- ---------- ---------
Gross profit.................................... 57.1 46.9 58.1 47.2
Selling, general and administrative expenses 32.8 31.3 33.9 32.8
Product development............................. 2.8 1.5 3.6 1.1
-------- ---------- ---------- ---------
Operating income ............................... 21.5 14.1 20.6 13.3
Other income (expense), net..................... 1.8 0.0 1.9 (2.1)
Income tax benefit ............................. 1.0 - 1.4 -
-------- --------- ---------- ---------
Net income ..................................... 24.3 14.1 23.9 11.2
Preferred stock dividend requirements........... (0.1) (0.5) (0.1) (0.5)
-------- --------- ---------- ---------
Net income attributable to common 24.2 13.6 23.8 10.7
stockholders.................................
========= ========= ========== =========
</TABLE>
Comparison of the Three-Month Period Ended June 30, 1997 to the Three-Month
Period Ended June 30, 1996
Revenues. For the three months ended June 30, 1997, revenues increased by
$3.2 million, or 119%, to $5.8 million from $2.7 million in the comparable
period ended June 30, 1996. Sales of IONSCAN(R)s and related products increased
by $3.4 million, or 158%, due to an increase of 224% in the number of units
sold, offset in part by a decline in average unit selling price. The increase in
unit sales was due to significant IONSCAN(R) sales to the aviation security
sector, primarily to the FAA, and, to a lesser extent, increased sales in other
markets. The decrease in average selling prices resulted primarily from an
increase in the number of IONSCAN(R)s sold to U.S. government agencies, which
typically are at lower unit prices than sales to other customers. Sales of
specialty instruments decreased by approximately $350,000, or 84.5%, in the
three months ended June 30, 1997 as compared to the same period in 1996,
principally due to the completion of a heavy water analyzer contract, which was
awarded to the Company in mid-1995 and completed in the first half of 1996.
<PAGE>
Revenues derived from funded research and development increased by approximately
$96,000, or 114%, in the three months ended June 30, 1997 as compared to the
same period in 1996. Funded research revenues increased as the Company commenced
work on an FAA contract, awarded in April 1997. As sales of its IONSCAN(R)s have
increased, the Company has placed less emphasis on marketing of specialty
instruments and contract research and development. As a result, management
anticipates that revenues from those activities will become increasingly less
important to the Company's overall results of operations.
Gross Profit. For the three months ended June 30, 1997, gross profit
increased by $2.1 million, or 166%, to $3.3 million from $1.2 million in the
comparable 1996 period. As a percentage of revenues, gross profit increased to
57.1% in the 1997 period from 46.9% in the comparable 1996 period. The
improvement was primarily attributable to higher margins on international sales,
coupled with larger, more efficient production runs of the IONSCAN(R), offset in
part by lower margins on sales to U.S. government agencies. In addition, the
Company has been able to reduce its cost of materials as a result of higher
volume purchases.
Selling, General and Administrative. For the three months ended June 30,
1997, selling, general and administrative expenses increased by $1.1 million, or
129%, to $1.9 million from $832,000 in the comparable 1996 period. Selling and
marketing expenses increased by approximately $751,000, of which $687,000 was
due to increased sales commissions attributable to a larger percentage of sales
originating through independent sales agents and distributors during the period.
The remaining increase was attributable to the addition of sales and service
personnel and related costs to handle increased business volume. General and
administrative expenses increased by $322,000, primarily as a result of
increased payroll and related costs and increased professional and consulting
costs. As a percentage of revenues, selling, general and administrative expenses
increased to 32.8% in the 1997 period from 31.3% in the comparable 1996 period.
Product Development. For the three months ended June 30, 1997, product
development expenses increased by $123,000, or 308%, to $163,000 from $40,000 in
the comparable 1996 period. As a percentage of revenues, product development
expenses increased to 2.8% (5.9% when combined with funded research and
development) in the 1997 period from 1.5% (4.7% when combined with funded
research and development) in the comparable 1996 period as a result of a higher
level of internally funded new product development activity. Management expects
to incur increased product development expenses in future periods in connection
with the enhancement of existing products and the development of new products
and applications.
Other Income and Expense. For the three months ended June 30, 1997,
interest expense decreased by $61,000, or 95.3%, to $3,000 from $64,000 in the
comparable 1996 period as a result of the repayment of indebtedness out of the
net proceeds of the Company's November 1996 public offering.
<PAGE>
Investment income for the three months ended June 30, 1997 was $115,000 as
compared to $42,000 for the same period in 1996, primarily as a result of the
investment of a portion of the net proceeds from the Company's November 1996
public offering. In the three months ended June 30, 1996, the Company recorded
$42,000 of gains recognized on trading securities held for Canadian pension
funding purposes.
Income Taxes. In the three-month period ended June 30, 1997, the Company
had a net tax benefit of $56,000, composed of current foreign taxes of $119,000,
offset by a $175,000 net deferred tax benefit. Such deferred tax benefit was due
in part to a reduction in the deferred tax valuation allowance as a result of
changes in management's estimates of the utilization of both U.S. and Canadian
tax loss carryforwards caused primarily by improved operating results.
Management anticipates that further deferred tax benefits will be recognized in
1997.
Comparison of the Six-Month Period Ended June 30, 1997 to the Six-Month Period
Ended June 30, 1996
Revenues. For the six months ended June 30, 1997, revenues increased by
$4.4 million, or 88.3%, to $9.4 million from $5.0 million in the comparable
period ended June 30, 1996. Sales of IONSCAN(R)s and related products increased
by $5.2 million, or 135%, due to an increase of 167% in the number of units
sold, offset in part by a decline in average unit selling price. The increase in
unit sales was due to significant IONSCAN(R) sales to the aviation security
sector, primarily to the FAA, and, to a lesser extent, increased sales in other
markets. The decrease in average selling prices resulted primarily from an
increase in the number of IONSCAN(R)s sold to U.S. government agencies, which
typically are at lower unit prices than sales to other customers. Sales of
specialty instruments decreased by approximately $523,000, or 83.9%, in the six
months ended June 30, 1997 as compared to the same period in 1996, principally
due to the completion of a heavy water analyzer contract, which was awarded to
the Company in mid-1995 and completed in the first half of 1996. Revenues
derived from funded research and development decreased by approximately
$227,000, or 42.0%, in the six months ended June 30, 1997 as compared to the
same period in 1996. Funded research revenues declined as the Company redirected
its research and development resources to product application and development
and in support of increased production. As sales of its IONSCAN(R)s have
increased, the Company has placed less emphasis on marketing of specialty
instruments and contract research and development. As a result, management
anticipates that revenues from those activities will become increasingly less
important to the Company's overall results of operations.
Gross Profit. For the six months ended June 30, 1997, gross profit
increased by $3.1 million, or 132%, to $5.5 million from $2.4 million in the
comparable 1996 period. As a percentage of revenues, gross profit increased to
58.1% in the 1997 period from 47.2% in the comparable 1996 period. The
improvement was primarily attributable to higher margins on international sales,
coupled with larger, more efficient production
<PAGE>
runs of the IONSCAN(R), offset in part by lower margins on sales to U.S.
government agencies. In addition, the Company has been able to reduce its cost
of materials as a result of higher volume purchases.
Selling, General and Administrative. For the six months ended June 30,
1997, selling, general and administrative expenses increased by $1.6 million, or
95.0%, to $3.2 million from $1.6 million in the comparable 1996 period. Selling
and marketing expenses increased by approximately $1.0 million, of which
$687,000 was due to increased sales commissions attributable to a larger
percentage of sales originating through independent sales agents and
distributors during the period. The remaining increase was attributable to the
addition of sales and service personnel and related costs to handle increased
business volume. General and administrative expenses increased by $553,000,
primarily as a result of increased payroll and related costs and increased
professional and consulting costs. As a percentage of revenues, selling, general
and administrative expenses increased to 33.9% in the 1997 period from 32.8% in
the comparable 1996 period.
Product Development. For the six months ended June 30, 1997, product
development expenses increased by $281,000, or 493%, to $338,000 from $57,000 in
the comparable 1996 period. As a percentage of revenues, product development
expenses increased to 3.6% (6.9% when combined with funded research and
development) in the 1997 period from 1.1% (11.9% when combined with funded
research and development) in the comparable 1996 period as a result of a higher
level of internally funded new product development activity. Management expects
to incur increased product development expenses in future periods in connection
with the enhancement of existing products and the development of new products
and applications.
Other Income and Expense. For the six months ended June 30, 1997, interest
expense decreased by $125,000, or 96.2%, to $5,000 from $130,000 in the
comparable 1996 period as a result of the repayment of indebtedness out of the
net proceeds of the Company's November 1996 public offering.
Investment income for the six months ended June 30, 1997 was $212,000 as
compared to $42,000 for the same period in 1996, primarily as a result of the
investment of a portion of the net proceeds from the Company's November 1996
public offering. In the six months ended June 30, 1996, the Company recorded
$42,000 of gains recognized on trading securities held for Canadian pension
funding purposes.
Income Taxes. In the six-month period ended June 30, 1997, the Company had
a net tax benefit of $131,000, composed of current foreign taxes of $291,000,
offset by a $422,000 net deferred tax benefit. Such deferred tax benefit was due
in part to a reduction in the deferred tax valuation allowance as a result of
changes in management's estimates of the utilization of both U.S. and Canadian
tax loss carryforwards caused primarily by improved operating results.
Management anticipates that further deferred tax benefits will be recognized in
1997.
<PAGE>
Liquidity and Capital Resources
During 1995 and 1996, the Company used the net proceeds of private and
public sales of securities to fund a portion of its cash flow needs. Since
January 1, 1995, the Company has raised approximately $2.0 million from the
private sales of warrants, convertible debentures and Common Stock. During 1995
and 1996, the Company also financed a portion of its working capital needs
through the sale of its remaining interest in Barringer Laboratories Inc.
("Labco"), pursuant to which the Company received $874,000. In November 1996,
the Company completed a public offering of its Common Stock and Common Stock
Purchase Warrants, resulting in net proceeds of $10.4 million. A portion of the
net proceeds of that offering was used to repay the Company's long-term
indebtedness.
Cash used in operations was $1.3 million for the six months ended June 30,
1997 as compared to $445,000 in the same period in 1996. However, for the three
months ended June 30, 1997, the Company generated cash from operations of $4,000
as compared to $10,000 in the same period in 1996. Cash used in the first six
months of 1997 resulted primarily from a significant increase in accounts
receivable and inventories, which more than offset net income of $2.3 million.
Accounts receivable increased as a result of higher sales, particularly during
the month of June. Inventories also increased substantially as the Company
acquired the materials necessary to support increased IONSCAN(R) production
during the second half of 1997. Cash used in operating activities during 1996
resulted primarily from increases in accounts receivable and inventory, which
more than offset net income of $564,000 for the same period in 1996.
Net cash used in investing activities was $240,000 for the first six months
of 1997 and $68,000 for the same period in 1996. Cash used in investing
activities during the first half of 1997 resulted primarily from capital
expenditures of $513,000, offset in part by the sale of investments. Cash used
in investing activities during the same period in 1996 resulted primarily from
capital expenditures of $47,000 and an additional investment in Labco of
$21,000.
Cash provided by financing activities was $155,000 for the first six months
of 1997 and $487,000 for the same period in 1996. Cash provided by financing
activities during the first six months of 1997 resulted primarily from the net
proceeds of certain option and warrant exercises, offset in part by the
repayment of indebtedness. Cash provided by financing activities in the same
period in 1996 resulted from an increase in indebtedness.
The Company's capital expenditures for the six months ended June 30, 1997
aggregated $513,000. Such expenditures consisted primarily of software upgrades
to various manufacturing information systems, computer hardware modernization
relating to the Company's network system and the acquisition of additional
equipment. The Company anticipates that total capital expenditures will be
approximately $500,000 for
<PAGE>
the remainder of 1997, substantially all of which will relate to equipment.
Also, the Company believes that it will require approximately $1.0 million in
additional investment in tooling, equipment, fixtures and facility to meet its
anticipated production levels for 1998.
The Company has substantial tax loss carryforwards to offset future tax
liabilities in the U.S.
Inflation
Inflation was not a material factor in either the sales or the operating
expenses of the Company during the periods presented herein.
Recent Pronouncements of the Financial Accounting Standards Board
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
128") which establishes standards for computing and presenting earnings per
share. SFAS 128 replaces the presentation of primary earnings per share and
fully diluted earnings per share with basic earnings per share and diluted
earnings per share, respectively. Basic earnings per share excludes dilution and
is computed by dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period. Diluted earnings per
share is computed similarly to fully diluted earnings per share. The standard is
effective for financial statements for periods ending after December 15, 1997,
with earlier application not permitted.
Basic and diluted earnings per share using this standard would have been
$0.26 and $0.22 and $0.42 and $0.35, respectively, for the three months and six
months ended June 30, 1997, respectively, and $0.10 and $0.10 and $0.16 and
$0.15, respectively, for the three months and six months ended June 30, 1996,
respectively.
In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, "Disclosures About Segments of an Enterprise and Related Information,"
which requires disclosure of reportable operating segments and will be effective
for financial statements issued for fiscal years beginning after December 31,
1997. The Company will be reviewing this pronouncement to determine its
applicability to the Company, if any.
<PAGE>
Disclosure Regarding Forward-Looking Statements
This Form 10-QSB contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. Such statements
include, but are not limited to, the anticipated growth in the demand for the
Company's products, the Company's opportunities to increase sales through, among
other things the development of new applications and markets for the IONSCAN(R),
the development of new products, the probability of the Company's success in the
sales of IONSCAN(R)s in current and future markets and 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, but are not limited to, the Company's dependence on
and the effect of governmental regulations and procurement policies on demand
for the Company's products, the Company's dependence on large orders and
customer concentrations, the reliance of the Company on its IONSCAN(R) products,
the dependence of the Company on its ability to successfully develop and market
new product applications, risks related to the limited proprietary rights
contained in the IONSCAN(R), risks related to potential fluctuations in
operating results, the effects of competition, risks related to the Company's
lengthy sales cycle, risks related to international business operations,
including potential changes in foreign regulations and fluctuations in exchange
rates, the Company's dependence on a limited number of suppliers, the Company's
ability to manage its growth, the Company's past cash constraints, and the
effect of general economic and market conditions, as well as conditions
prevailing in the markets for the Company's products. Certain of the factors
summarized above are described in more detail in the Company's Registration
Statement on Form SB-2 (File no. 333-33129) and the Company's 1996 Annual Report
on Form 10-KSB and reference is hereby made thereto for additional information
with respect to the matters referenced above.
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
(a) The 1997 Annual Meeting of Stockholders of the Company was held
on May 13, 1997.
(b) Not applicable
(c) The results of the voting at the Annual Meeting of Stockholders was
as follows:
1) Election of Directors
<TABLE>
Nominee For Withheld
------- -------- ---------
<S> <C> <C>
Stanley S. Binder 4,086,308 1,359,170
John H. Davies 4,086,308 1,359,170
John J. Harte 4,086,308 1,359,170
Richard D. Condon 4,086,308 1,359,170
John D. Abernathy 4,086,308 1,359,070
James C. McGrath 4,086,308 1,359,070
</TABLE>
2) Amendment to the Certificate of Incorporation to increase the
authorized shares of the Company's Common Stock, par value $0.01
per share, from 7,000,000 to 20,000,000
FOR: 3,869,994; AGAINST: 203,757; ABSTAIN: 17,750; NOT-VOTED: 1,371,730
3) Adoption of the Company's proposed 1997 Stock Compensation Program:
FOR: 1,591,003; AGAINST: 427,270; ABSTAIN: 27,156; NOT-VOTED: 3,417,802
4) Ratification of appointment of BDO Seidman, LLP as independent
auditors of the Company's 1997 financial statements
FOR: 3,860,123; AGAINST: 11,700; ABSTAIN: 13,794; NOT-VOTED: 1,577,434
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 The Company's Certificate of Incorporation, as amended (previously
filed as Exhibit 3.1 to the Company's Registration Statement on Form
SB-2 (File No. 333-33129 ) and incorporated herein by reference).
3.2 By-laws of the Company (previously filed Exhibit 3.2A to the Company's
Annual Report on Form 10-K/A-2 for the fiscal year ended December 31,
1994 (File No. 0-3207) and incorporated herein by reference).
10.1 1997 Stock Compensation Program (previously filed as Exhibit 10.9 to
the Company's Registration Statement on Form SB-2 (file No. 333-33129)
and incorporated herein by reference).
10.2 Letter Agreement, dated July 25, 1997, by and between Barringer
Research Ltd. And Her Majesty the Queen in Right of Canada, as
Represented by the Minutes of National Revenue (previously filed as
Exhibit 10.11 to the Company's Registration Statement on Form SB-2
(File No. 333-33129) and incorporated herein by reference).
11.1 Earnings Per Share
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
None
<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 12, 1997
<PAGE>
BARRINGER TECHNOLOGIES INC.
INDEX TO EXHIBITS
Exhibit Number Page No.
11.1 Earnings Per Share
27.1 Financial Data Schedule
EXHIBIT 11.1
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
PRIMARY PER FULLY DILUTED PER SHARE
SHARE
------------------- -------------------- ----------------------------------------
Three months ended Six months ended Three months ended Six months ended
June 30, June 30, June 30, June 30,
------------------- --------------------- ------------------- -------------------
1997 1996 1997 1996 1997 1996 1997 1996
--------- --------- ---------- -------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net income $ 1,415 $ 375 $ 2,260 $ 564 $ 1,415 $ 375 $ 2,260 $ 564
Interest adjustment - - - - - - - 17
Preferred dividends (3) (12) (6) (24) (3) - (6) -
----------- --------- ------- -------- --------- ------ --------- -------
Net income to common stockholders $ 1,412 $ 363 $ 2,254 $ 540 $ 1,412 $ 375 $ 2,254 $ 581
=========== ========= ======== ======== ========= ====== ========= ========
Weighted average common shares outstanding 5,453 3,489 5,423 3,483 5,452 3,489 5,423 3,485
Assumed conversion of preferred stock - - - - 29 - 29 105
Assumed conversion of outstanding
options and warrants (treasury stock method) 844 - 753 - 937 - 936 264
---------- --------- ------- -------- ------- ------ -------- ---------
Revised common share basis 6,297 3,489 6,176 3,483 6,418 3,489 6,388 3,854
========== ========= ======= ======== ======== ======= ======== =========
Earnings per common share $ 0.22 $ 0.10 $ 0.36 $ 0.16 $ 0.22 $ 0.10 $ 0.35 $ 0.15
========= ========= ======= ======== ======= ======= ======== ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000010119
<NAME> BARRINGER TECHNOLOGIES, INC.
<MULTIPLIER> 1000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 3,896
<SECURITIES> 4,055
<RECEIVABLES> 6,509
<ALLOWANCES> 157
<INVENTORY> 3,424
<CURRENT-ASSETS> 19,253
<PP&E> 2,408
<DEPRECIATION> 1,342
<TOTAL-ASSETS> 20,385
<CURRENT-LIABILITIES> 2,839
<BONDS> 0
0
116
<COMMON> 55
<OTHER-SE> 17,254
<TOTAL-LIABILITY-AND-EQUITY> 20,385
<SALES> 9,438
<TOTAL-REVENUES> 9,438
<CGS> 3,955
<TOTAL-COSTS> 3,538
<OTHER-EXPENSES> (189)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5
<INCOME-PRETAX> 2,129
<INCOME-TAX> (131)
<INCOME-CONTINUING> 2,260
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,260
<EPS-PRIMARY> 0.36
<EPS-DILUTED> 0.35
</TABLE>
