SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ---- ACT OF 1934
For the quarterly period ended March 31, 1999
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 REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 84-0720473
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
30 Technology Drive, Warren, New Jersey
07059 (ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
(908) 222-9100
(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
1939 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 practicable date:
Common stock, $0.01 par value - outstanding as of April 21, 1999 - 7,214,197
shares
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
INDEX
Part I - Financial Information Page No.
Item 1. Financial Statements.
- Consolidated Balance Sheets as of March 31, 1999
(unaudited) and December 31, 1998 3
- Consolidated Statements of Income (unaudited)
for the three months ended March 31, 1999
and 1998 5
- Consolidated Statement of Stockholders' Equity and
Comprehensive Income 6
- Consolidated Statements of Cash Flows (unaudited)
for the three months ended March 31, 1999
and 1998 7
- Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 9
Item 3. Quantitive and Qualitative Disclosures about
Market Risk. 12
Part II - Other Information 13
Item 1. Legal Proceedings. 13
Signatures 14
Exhibits
<PAGE>
Part I - Item 1. Financial Statements
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS March 31, Dec. 31,
1999 1998
(unaudited)
Current assets:
Cash and cash equivalents $14,632,000 $18,802,000
Marketable securities 17,562,000 15,606,000
Trade receivables, less allowances of
$365,000 and $626,000 5,724,000 6,502,000
Inventories 5,152,000 3,943,000
Prepaid expenses and other 1,380,000 1,111,000
Deferred tax asset 2,842,000 3,092,000
---------- ------------
Total current assets 47,292,000 49,056,000
Property and equipment 2,476,000 2,349,000
Other assets 1,199,000 1,239,000
---------- ------------
Total assets $50,967,000 $52,644,000
========== ===========
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY March 31, Dec. 31,
1999 1998
(unaudited)
Current liabilities:
<S> <C> <C>
Accounts payable $1,961,000 $1,169,000
Accrued liabilities 523,000 946,000
Accrued payroll and related taxes 924,000 1,005,000
Accrued commission payable 171,000 127,000
Income taxes payable 69,000 112,000
---------- ---------
Total current liabilities 3,648,000 3,359,000
Non-current liabilities 147,000 145,000
---------- ---------
Total liabilities 3,795,000 3,504,000
---------- ---------
Stockholders' equity:
Convertible preferred stock, $1.25 par value,
1,000,000 shares authorized, none outstanding
Preferred stock, $2.00 par value, 4,000,000
shares authorized:
270,000 shares designated class A convertible
preferred stock, 45,146 shares outstanding less
discount of $30,000 47,000 47,000
730,000 shares designated class B convertible
preferred stock, 22,500 shares outstanding 45,000 45,000
Common stock, $.01 par value, 20,000,000 shares
authorized, 7,856,000 and 7,851,000 shares
outstanding, respectively 79,000 79,000
Additional paid-in capital 54,723,000 54,693,000
Accumulated deficit (3,859,000) (4,359,000)
Foreign currency translation (842,000) (786,000)
----------- -----------
50,193,000 49,719,000
Less: common stock in treasury at cost, 462,000
and 92,000 shares, respectively (3,021,000) (579,000)
----------- ----------
Total stockholders' equity 47,172,000 49,140,000
------------ -----------
<S> <C> <C>
Total liabilities and stockholders' equity $50,967,000 $52,644,000
========== ==========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
1999 1998
--------------------------------------------------------
<S> <C> <C>
Revenues $5,277,000 $5,948,000
Cost of revenues 2,140,000 2,435,000
-------------------------- -------------------------
3,137,000 3,513,000
-------------------------- -------------------------
Operating expenses:
Selling, general and administrative 2,166,000 1,696,000
Amortization of goodwill 39,000 --
Product development 634,000 362,000
-------------------------- -------------------------
2,839,000 2,058,000
-------------------------- -------------------------
Operating income 298,000 1,455,000
-------------------------- -------------------------
Other income (expense):
Interest income 485,000 150,000
Other, net 17,000 (14,000)
-------------------------- -------------------------
502,000 136,000
-------------------------- -------------------------
Income before income tax benefit 800,000 1,591,000
Income tax provision (benefit) (note 2) 300,000 (200,000)
-------------------------- -------------------------
Net income 500,000 1,791,000
Preferred stock dividend requirements (2,000) (3,000)
-------------------------- -------------------------
Net income attributable to common $498,000 $1,788,000
stockholders
========================== =========================
Per share data (note 3):
Basic earnings per share $ 0.06 $ 0.32
========================== =========================
Diluted earnings per share $ 0.06 $ 0.28
========================== =========================
Weighted average common and common equivalent shares outstanding:
Basic 7,712,000 5,519,000
========================== =========================
Diluted 8,397,000 6,391,000
========================== =========================
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
<CAPTION>
Compre-
Common Stock Class A Class B Paid-in Deficit Translation Treasury hensive
Preferred Preferred Capital* Adjustment Stock Income
Stock Stock
Total
Equity Shares Amount Shares Amount Shares Amount
------ ------ ------ ------ ------ ------ ------ ------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance - January 1, 1998 $ 49,140 7,851 $ 79 39 $47 23 $ 45 $54,693 $(4,359) $ (786) $(579)
Net income 500 500 $ 500
Translation adjustment (56) (56) (35)
-------
Comprehensive Income $ 465
=======
Exercise of stock options
and warrants 28 6 28
Repurchase of common stock (2,505) (2,505)
Sale of treasury stock, net
of notes receivable ($97) 0 (63) 63
Repayment of stockholder loan 65 65
------ ----- ----- ----- ----- ------ ---- -------- ---------- -------- --------
Balance - March 31, 1999 $ 47,172 7,857 $ 79 39 $47 23 $45 $54,723 $(3,859) $(842) $(3,021)
======== ===== ===== ==== ===== ====== ==== ======== ========== ======== ========
</TABLE>
- -------------------------
* At March 31, 1999, net of notes receivable of $1,517 from the sale of stock.
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
1999 1998
-------------- --------------
OPERATING ACTIVITIES
<S> <C> <C>
Net Income $500,000 $1,791,000
Items not affecting cash:
Depreciation and amortization 218,000 100,000
Inventory and accounts receivable reserves 42,000 166,000
Deferred tax provision (benefit) 250,000 (300,000)
Other (35,000) --
Increase in non-cash working capital balances (461,000) (1,675,000)
--------------- --------------
Cash provided by operating activities 514,000 82,000
--------------- --------------
INVESTING ACTIVITIES
Purchase of equipment and other (316,000) (304,000)
Sale (purchase) of marketable securities (1,956,000) 1,999,000
--------------- --------------
Cash provided by (used in) investing (2,272,000) 1,695,000
activities
--------------- --------------
FINANCING ACTIVITIES
Acquisition of treasury stock (2,505,000) --
Repayment of loan from employee 65,000 --
Warrant and option exercises 28,000 105,000
--------------- --------------
Cash provided by (used in) financing (2,412,000) 105,000
activities
--------------- --------------
Increase (decrease) in cash and cash equivalents (4,170,000) 1,882,000
Cash and cash equivalents at beginning of period 18,802,000 8,188,000
--------------- --------------
Cash and cash equivalents at end of period $14,632,000 $10,070,000
=============== =============
CHANGES IN COMPONENTS OF NON-CASH WORKING CAPITAL
BALANCES RELATED TO OPERATIONS
Receivables $768,000 $304,000
Inventory (1,241,000) (375,000)
Other current assets (277,000) (60,000)
Other assets - -
Accounts payable and accrued expenses 289,000 (1,544,000)
---------------- ---------------
Increase in non-cash working capital balances $(461,000) $(1,675,000)
================ ===============
Cash paid during the period for income taxes $210,000 $45,000
=============== ==============
See notes to consolidated financial statements.
</TABLE>
<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 March 31, 1999 and the results of its operations and its cash
flows for the three months ended March 31, 1999 and 1998, 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, 1998. This report
should be read in conjunction therewith. The results of operations for the three
months ended March 31, 1999, are not necessarily indicative of the results to be
expected for any other interim period or for the full year.
2. At March 31, 1999, a valuation allowance has been provided for certain
limitations applied to the net operating loss carryforward of a subsidiary. At
March 31, 1999, the net deferred tax asset of $2,792,000, included approximately
$445,000 and $2,347,000 related to the Company's Canadian and U.S. operations,
respectively. Based on historical results and estimated 1999 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.
<TABLE>
<CAPTION>
3. Basic and diluted earnings per share have been computed as follows:
Shares (Denominator) Per Share Amount
- --------------------------------------------------------------------------------------------------- -------------------
For the three months ended March 31, 1999:
Basic Earnings Per Share
<S> <C> <C> <C>
Income attributable to common shareholders $ 498,000 7,712,000 $0.06
====
Effect of dilutive securities
Warrants and options - 663,000
Convertible preferred dividend requirements 2,000 22,000
-------- ---------
Diluted Earnings Per Share
Income attributable to common
stockholders and assumed conversions $ 500,000 8,397,000 $0.06
======== ========= ====
For the three months ended March 31, 1998:
Basic Earnings Per Share
Income attributable to common shareholders $1,788,000 5,519,000 $0.32
========= ========= ====
Effect of dilutive securities
Warrants and options - 848,000
Convertible preferred dividend requirements 3,000 24,000
--------- ---------
Diluted Earnings Per Share
Income attributable to common
stockholders and assumed conversions $1,791,000 6,391,000 $0.28
==================== =================== ====
</TABLE>
<PAGE>
PartI - Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following table presents certain income and expense items from the Company's
consolidated statements of operations expressed as a percentage of revenues for
the following periods:
<TABLE>
<CAPTION>
Percentage of Total Revenue
Three months ended March 31,
1999 1998
------- ----
<S> <C> <C>
Statement of operations data:
Revenues from operations........................ 100.0 100.0
Cost of revenues................................ 40.6 40.9
-------- --------
Gross profit.................................... 59.4 59.1
Selling, general and administrative expenses.... 41.0 28.5
Amortization of goodwill........................ 0.7 --
Product development............................. 12.0 6.1
-------- -------
Operating income ............................... 5.7 24.5
Other income, net............................... 9.5 2.3
Income tax benefit (provision).................. (5.7) 3.3
-------- -------
Net income ..................................... 9.5 30.1
Preferred stock dividend requirements........... * *
-------- -------
Net income attributable to common stockholders.. 9.5 30.1
======== =======
* Less than .5%
</TABLE>
Comparison of the Quarter ended March 31, 1999 Compared To the Quarter ended
March 31, 1998
Revenues. For the quarter ended March 31, 1999, revenues decreased by
$671,000, or 11.3%, to $5.3 million from $5.9 million for the quarter ended
March 31, 1998. Sales of IONSCAN(R)s and related products decreased by $1.0
million, or 16.8%, due to a decrease of 22.9% in the number of units sold, and a
decline in average unit selling price of approximately 5.2%. The decrease in
unit sales was due to significant IONSCAN(R) sales to the aviation security
market, primarily to the FAA in the first quarter of last year. The decrease in
average selling prices resulted primarily from increased competition, primarily
in the drug interdiction market. The sale of IONSCAN(R) consumables, spares and
service represented 25.1% of IONSCAN(R) revenues for the quarter ended March 31,
1999 as compared to 14.6% in the same quarter last year. The Company expects
that, as the installed base of IONSCAN(R)s increases, these revenues will become
increasingly significant to the Company. Sales of specialty instruments and
other products increased by $318,000, or 1673%, to $337,000. The increase was
attributable to sales made by DigiVision Inc., acquired May 1, 1998. Revenues
derived from funded research and development decreased by approximately $7,000,
or 10.4%, in the quarter ended March 31, 1999 as compared to the 1998 period.
Funded research and development revenues decreased as a result of the Company
concentrating most of its research and development staff on new products and new
applications for existing products.
Gross Profit. For the quarter ended March 31, 1999, gross profit decreased
by $376,000, or 10.7%, to $3.1 million from $3.5 million in the 1998 period. As
a percentage of revenues, gross profit increased slightly to 59.4% in the
quarter ended March 31, 1999 from 59.1% in the 1998 period. The increase in the
gross profit percentage was primarily attributable to reduced production costs
resulting from larger, more efficient production runs of the IONSCAN(R) and
related reductions in cost of materials due to higher volume purchases, offset,
in part by lower average selling prices. The decrease in gross profit, however,
was due to a 22.9% decrease in units sold as well as reduced average selling
prices.
Selling, General and Administrative. For the quarter ended March 31, 1999,
selling, general and administrative expenses increased by approximately
$470,000, or 27.7%, to $2.2 million from $1.7 million in the 1998 period. As a
percentage of revenues, selling, general and administrative expenses increased
to 41.0% in the 1999 period from 28.5% in the 1998 period. Selling and marketing
expenses increased by approximately $351,000, primarily attributable to the
addition of sales and service personnel and related costs, increased commission
expense of approximately $125,000 over the same period last year and $123,000
attributable to the acquisition of DigiVision in May 1998. General and
administrative expenses decreased by $75,000, offset by $194,000 of expenses
attributable to the business development group formed in May 1998.
Product Development. For the quarter ended March 31, 1999, product
development expenses increased by $272,000, or 75.1%, to $634,000 from $362,000
in the 1998 period. As a percentage of revenues, product development expenses
increased to 12.0% for the quarter ended March 31,1999 from 6.1% in the 1998
period as a result of a higher level of internally funded new product and
applications development activity. Of the $272,000 increase, $128,000 was
attributable to DigiVision, acquired in May 1998.
Operating Income. For the quarter ended March 31, 1999, operating income
decreased by $1.2 million, or 79.5%, to $298,000 from $1.5 million in the 1998
period. As a percentage of revenues, operating income decreased to 5.7% from
24.5% in the 1998 period. The decrease is due to the combination of factors
noted above.
Other Income and Expense. For the quarter ended March 31, 1999, other
income increased by $366,000, or 269%, to $502,000 from $136,000 in the 1998
period. The increase was attributable to an increase in investment and other
interest income of $335,000, or 223%, to $485,000 as compared to $150,000 in the
same period in 1998, primarily as a result of the investment of a portion of the
net proceeds from the Company's April 1998 public offering.
Income Taxes. For the quarter ended March 31, 1999, the Company had a tax
provision of $300,000, as compared to a net tax benefit of $200,000 in the 1998
period. At December 31, 1998, the Company had substantially eliminated its
deferred tax valuation allowance and accordingly will be providing for taxes on
its future income.
Capital Resources and Liquidity
Cash provided by operations was $514,000 in the three months ended March 31,
1999, as compared to $82,000 for the same period in 1998. Cash provided by
operations in the three months ended March 31, 1999 resulted primarily from net
income of $500,000, depreciation, amortization and changes in reserves of
$510,000, partially offset by increases in inventory. Cash provided by
operations in the three months ended March 31, 1998, resulted primarily from net
income of $1.8 million, partially offset by decreases in accounts payable.
Cash used in investing activities was $2.3 million in the three months
ended March 31, 1999, and cash provided by investing activities was $1.7 million
in the same period in 1998. Cash used in investing activities in the three
months ended March 31, 1999 resulted from the purchase of $2.0 million of
marketable securities and the purchase of $316,000 of equipment. Cash provided
by investing activities in the three months ended March 31, 1998, resulted from
the sale $2.0 million of marketable securities, partially offset by the purchase
of equipment.
Cash used in financing activities was $2.4 million in the three months
ended March 31, 1999, and cash provided by financing activities was $105,000 in
the same period in 1998. Cash used in financing activities in the three months
ended March 31, 1999 resulted from the repurchase of $2.5 million of the
Company's common stock pursuant to the Company's previously announced stock
repurchase program, partially offset by the exercise of options and warrants and
the partial repayment of a stockholder loan. Cash provided by financing
activities in the three months ended March 31, 1998, resulted from the exercise
of options and warrants.
The Company's capital expenditures in the three months ended March 31, 1999
aggregated approximately $316,000. Such expenditures consisted primarily of
leasehold improvements and equipment. The Company believes that it will require
approximately $700,000 in additional capital investment in tooling, equipment,
and facility improvements for the remainder of 1999.
The Company has a $5.0 million unsecured credit facility with Fleet Bank,
N.A. to be used for general working capital purposes, including the issuance of
standby letters of credit. At March 31, 1999, $4.8 million was available under
this Facility.
At December 31, 1998, the Company had approximately $7.3 million of tax
loss carryforwards to offset future taxable income in the U.S and $2.1 million
of expenses available to offset future taxable income in Canada.
As of March 31, 1999, the Company had cash and cash equivalents of $14.6
million and marketable securities of $17.6 million. The Company believes that
its existing cash balances, marketable securities and income from operations in
future periods will be sufficient to fund its working capital requirements for
at least the next twelve months.
The Company has a common stock repurchase program under which it is
authorized to repurchase up to 1,000,000 shares of the Company's outstanding
Common Stock. As of March 31, 1999, the Company had repurchased 592,500 shares
at an aggregate cost of approximately $4.0 million.
Inflation
Inflation was not a material factor in either the sales or the operating
expenses of the Company during the periods presented herein.
Year 2000 Issue
The year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Certain computer
programs may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices or engage in similar normal business
activity.
The Company has recently established a team to assess risk, identify and
correct exposures when possible, and develop contingency plans for Year 2000
compliance issues. The Company has developed an assessment plan and timetable
and anticipates completion of its assessment by June 30, 1999. To date, the
committee has identified several areas of potential concern to the Company, most
particularly the software and hardware used as part of its own information
systems, the impact of Year 2000 problems on the operation of its products, both
current and discontinued, the impact of Year 2000 issues on its vendors, the
impact of Year 2000 issues as it affects the physical working environment in
which the Company operates, the potential impact of Year 2000 problems on the
markets that the Company sells into and finally, crisis planning.
The Company is currently completing its review of the software and hardware
systems used by the Company's information systems. The Company believes that
with modifications to existing software and hardware and conversions to new
software, its internal systems and hardware will be Year 2000 compliant .
The Company has substantially completed a preliminary review of its
IONSCAN(R) products and believes that Year 2000 issues will have no impact on
the performance of its IONSCAN(R) product line as the IONSCAN(R)'s functionality
is not dependent on date or time references. The Company has sold many custom,
one of a kind products other than the IONSCAN(R) over the years. It will
investigate Year 2000 issues related to such products only when requested to do
so by the end user. However, based upon a preliminary review the Company
believes that the functionality of those products is not dependent on date or
time references.
The Company has initiated formal communications with its significant
suppliers, customers, and critical business partners to determine the extent to
which the Company may be vulnerable in the event that those parties fail to
properly remediate their own Year 2000 issues. The Company intends to take steps
to monitor the progress made by those parties, and intends to monitor others
with whom it does business as the Year 2000 approaches.
The Company has reviewed the operating environment within which it
functions to assess the Year 2000 risks relating to, among other things, its
heating and air conditioning systems, security systems, communication systems
and related hardware. The Company has determined that such systems are Year 2000
compliant. To the extent possible, it will also assess certain market risks to
try and determine, the effects, if any, Year 2000 issues could have on its
customers that would affect their ability to purchase and pay for the Company's
products. Based on initial assessments, the Company does not believe that Year
2000 issues will significantly alter demand for the Company's products.
The Company intends to develop a crisis plan to deal with certain critical
Year 2000 "what if" situations should they arise. The Company currently expects
that it will either shift supply orders to suppliers that can demonstrate Year
2000 compliance or will attempt to stockpile significant supplies of critical
components as January 1, 2000 approaches. The Company believes, however, that
due to the widespread nature of potential Year 2000 issues, the contingency
planning process is an ongoing one which will require further modifications as
the Company obtains additional information regarding the Company's state of
preparedness and the status of third party Year 2000 readiness.
The Company believes that the actions it has taken to date and steps it
intends to take in the future will allow it to be Year 2000 compliant in a
timely manner. There can be no assurances, however, that the Company's internal
systems and products or those of third parties on which the Company relies will
be Year 2000 compliant in a timely manner or that the Company's or third
parties' contingency plans will mitigate the effects of any noncompliance. The
failure to achieve Year 2000 compliance or to have appropriate contingency plans
in place to deal with any noncompliance could result in a significant disruption
of the Company's operations and could have a material adverse effect on the
Company's financial condition or results of operations.
Because the Company is still in the process of assessing its Year 2000
issues, the Company cannot estimate the cost of achieving Year 2000 compliance
at this time. However, based on the preliminary assessments conducted to date,
the Company does not believe that the costs of achieving such compliance will be
material to its results of operations or financial condition.
The costs of compliance and the dates on which the Company believes it
will complete its Year 2000 modifications and risk assessments, are based on
managements best estimates, based upon many different assumptions of future
events and other factors. However, there can be no assurances that the Company's
estimates will be achieved and actual results could differ from those
anticipated.
Disclosure Regarding Forward Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, that are based
on the beliefs of the Company's management as well as assumptions made by and
information currently available to the Company's management. When used in this
Quarterly Report on Form 10-Q Report, the words "estimate," "project,"
"believe," "anticipate," "intend," "expect," "plan," predict," "may," "should,"
"will," the negative thereof and similar expressions are intended to identify
forward-looking statements.
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 contained herein. Important factors that could
contribute to such differences include, but are not limited to, the development
and growth of markets for the Company's products, the Company's dependence on
and the effect of governmental regulations on demand for the Company's products,
the impact of both foreign and domestic governmental budgeting decisions and the
timing of governmental expenditures, the reliance of the Company on its
IONSCAN(R) products, and the dependency of the Company on its ability to
successfully develop and market new products applications, the effects of
competition, 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 reference is hereby
made thereto for additional information with respect to the matters referenced
above. Other factors may be described from time to time in the Company's other
filings with the Securities and Exchange Commission, news releases and other
communications. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
does not undertake any obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
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 set forth above and contained elsewhere in
this Quarterly Report onForm 10-Q.
Part I - Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable.
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
In August 1998, Ion Track Instruments, Inc. ("ITI") filed a civil
action against the Company and one of its employees in the United States
District Court for the District of Massachusetts (No. 98-11521-JLT). The action
alleges that the Company and the employee made false and misleading statements
about ITI's products in violation of the Lanham Act. In March 1999, the Court
issued a preliminary injunction prohibiting the Company from making certain
statements regarding ITI and its products pending the completion of discovery
and the outcome of a trial on the merits as to whether such statements were
false and misleading. However, the court denied ITI's other claims for
preliminary injunctive relief pursuant to which ITI had sought to bar or,
alternatively, restrict the employee's employment by the Company.
The Company has denied the substantive allegations of this complaint
and has filed a counterclaim seeking damages from ITI. Notwithstanding the
imposition of the preliminary injunction, the Company believes that ITI's claims
are without merit and intends to continue to vigorously defend the action. The
Company does not expect that this action will materially adversely affect its
consolidated financial position, results of operations or liquidity.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 The Company's Certificate of Incorporation of the Company,
as amended (previously filed as Exhibit 3.1A 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 as Exhibit 3.1 to
the Company's Current Report on Form 8-K dated August 26,
1998 (File No. 0-3207) and incorporated herein by
reference).
27 Financial Data Schedule.
(b) Reports on Form 8-K
None
<PAGE>
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
SIGNATURES
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.
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: April 22 , 1999
<PAGE>
BARRINGER TECHNOLOGIES INC.
INDEX TO EXHIBITS
Exhibit Number Page No.
27 Financial Data Schedule 16
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE REGISTRANT'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
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<NAME> BARRINGER TECHNOLOGIES, INC.
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92
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