SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
Amendment No. 1
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE NINE MONTHS ENDED JUNE 30, 1999
BOONTON ELECTRONICS CORPORATION
State: New Jersey Identification No. 22-1543137
File No. 0-2364
Address: 25 Eastmans Road, P.O. Box 465,
Parsippany, New Jersey 07054-0465
Telephone: 973-386-9696
Address: 25 Eastmans Road, P.O. Box 465,
Parsippany, New Jersey 07054-0465
Telephone: 973-386-9696
"Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days."
YES [X] NO [ ]
Shares Outstanding:
June 30, 1999 2,387,332
June 30, 1998 1,644,301
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
BALANCE SHEET
JUNE 30, SEPTEMBER 30,
ASSETS 1999 1998
------ ------------ ------------
Current assets:
Cash and cash equivalents $ 113,452 $ 113,812
Trade receivables 1,070,469 1,299,281
Inventories 1,855,430 1,444,245
Deferred tax benefits 86,000 86,000
Other current assets 405,000 318,442
------------ ------------
Total current assets 3,530,351 3,261,780
------------ ------------
Plant and equipment-net 397,230 457,160
------------ ------------
Other assets:
Deferred tax benefit 927,129 927,129
Security deposits 70,121 70,121
------------ ------------
Total other assets 997,250 997,250
------------ ------------
Total assets $ 4,924,831 $ 4,716,190
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Note payable $ 69,032 $ 73,333
Related party loans 43,530 43,530
Accounts payable - trade 1,026,502 783,247
Other current liabilities 291,511 527,366
Unsecured claims payable (Chapter 11
settlement) current -- 144,993
------------ ------------
Total current liabilities 1,430,575 1,572,469
Note payable - noncurrent 255,814 307,496
Related party loans - noncurrent 218,970 218,970
Unsecured claims payable (Chapter 11
settlement) - noncurrent -- --
------------ ------------
Total liabilities 1,905,359 2,098,935
------------ ------------
Commitments and contingencies
Stockholders' equity:
Common stock 238,733 164,430
Capital in excess of par 5,005,563 4,637,866
Deficit (2,224,824) (2,185,041)
------------ ------------
Total stockholders' equity 3,019,472 2,617,255
------------ ------------
Total liabilities and stockholders' equity $ 4,924,831 $ 4,716,190
============ ============
The accompanying footnotes are an integral part of these statements.
2
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED
--------------------------
JUNE 30, JUNE 30,
1999 1998
----------- -----------
Net sales $ 5,234,573 $ 4,642,057
Cost of goods sold 2,716,778 2,332,550
----------- -----------
Gross profit 2,517,795 2,309,507
----------- -----------
Operating expenses:
Commissions 650,643 456,585
Research and development 604,774 748,102
Other operating expenses 1,184,541 1,070,322
----------- -----------
Total operating expenses 2,439,958 2,275,009
----------- -----------
Income from operations 77,837 34,498
----------- -----------
Interest expense 50,478 37,163
Other expense/(income) 65,704 10,929
----------- -----------
Total other expenses 116,182 48,092
----------- -----------
Income/(loss) before provision for
income taxes (38,345) (13,594)
Provision for income taxes 1,438 --
----------- -----------
Net income/(loss) (39,783) (13,594)
Stockholders' equity - beginning 2,617,255 2,449,296
Common stock sold 442,000 25,000
----------- -----------
Stockholders' equity - ending $ 3,019,472 $ 2,460,702
=========== ===========
Weighted average number of shares
Outstanding 2,338,954 1,644,301
=========== ===========
Earnings/(loss) per share: $(0.02) $(0.01)
====== ======
The accompanying footnotes are an integral part of these statements.
3
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED
--------------------------
JUNE 30, JUNE 30,
1999 1998
----------- -----------
Net sales $ 1,820,394 $ 1,422,653
Cost of goods sold 923,170 680,347
----------- -----------
Gross profit 897,224 742,306
----------- -----------
Operating expenses:
Commissions 213,266 122,166
Research and development 170,777 254,380
Other operating expenses 397,159 372,058
----------- -----------
Total operating expenses 781,202 748,604
----------- -----------
Income/(loss) from operations 116,022 (6,298)
----------- -----------
Interest expense 19,933 10,602
Other expense/(income) 27,106 14,742
----------- -----------
Total other expenses 47,039 25,344
----------- -----------
Income/(loss) before provision for income
taxes 68,983 (31,642)
Provision for income taxes 1,439 --
----------- -----------
Net income/(loss) 67,544 (31,642)
Stockholders' equity - beginning 2,951,928 2,492,344
----------- -----------
Stockholders' equity - ending $ 3,019,472 $ 2,460,702
=========== ===========
Weighted average number of shares
Outstanding 2,338,954 1,644,301
=========== ===========
Earnings/(loss) per share: $0.03 $(0.02)
===== ======
The accompanying footnotes are an integral part of these statements.
4
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED
-------------------------
JUNE 30, JUNE 30,
1999 1998
--------- ---------
Cash provided/(used) by operations:
Net income/(loss) $ (39,783) $ (13,594)
Adjustments to reconcile net income:
Depreciation & amortization 66,087 60,391
(Gain) on sale of fixed assets (150) --
Decrease/(increase) in current assets:
Accounts receivable 228,812 216,740
Inventories (411,185) (26,897)
Other current assets (86,558) 94,495
Increase/(decrease) in current liabilities:
Accounts payable 243,255 (349,822)
Chapter 11 settlement - current (144,993) (48,491)
Accrued liabilities (235,855) 131,424
--------- ---------
Net cash provided/(used) by operations (380,370) 64,246
--------- ---------
Cash flows from investing activities:
Purchase of equipment (6,157) (565)
Proceeds from sale of assets 150 1,103
--------- ---------
Net cash provided/(used) by investing activities (6,007) 538
--------- ---------
Cash flows from financing activities:
Increase notes payable -- --
Payments on loans (55,983) (91,795)
Proceeds from sale of stock 442,000 25,000
--------- ---------
Net cash provided/(used) by financing activities 386,017 (66,795)
--------- ---------
Increase/(decrease) in cash and cash equivalents (360) (2,011)
Cash and cash equivalents at beginning of period 113,812 121,620
--------- ---------
Cash and cash equivalents at end of period $ 113,452 $ 119,609
========= =========
The accompanying footnotes are an integral part of these statements.
5
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND
DESCRIPTION OF BUSINESS:
A. The Company is a New Jersey corporation organized in 1947. The
Company designs and produces electronic testing and measuring
instruments including power meters, voltmeters and modulation meters.
Recent models are microprocessor controlled and are often used in
computerized automatic testing systems. The Company's equipment is
marketed throughout the world to commercial and government customers
in the electronics industry.
The Company markets and distributes its products throughout the
United States and abroad through some 15 domestic sales
representatives and 24 foreign distributors. Representatives sell on
a commission basis, while distributors buy products for resale at
discounted ex-factory prices. Its representatives and distributors
also handle the products of other manufacturers, although these are
not generally competitive with the Company's products except that
some items handled by foreign distributors may be somewhat
competitive.
B. Use of estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
C. The company accounts for uncollectible accounts under the direct
write-off method whereas generally accepted accounting principals
require provision for such expenses under the allowance method. The
effect of using this method approximates the allowance method as all
amounts are deemed to be fully collectible.
D. Inventories - stated at the lower of cost or market determined by the
first-in, first-out (FIFO) method.
E. Plant and equipment - Depreciation and amortization are calculated by
the straight-line method for financial reporting purposes at rates
based on the following estimated useful lives:
Building and improvement 39
Machinery and equipment 5-10
Office furniture and fixtures 5-10
Transportation equipment 3
6
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
The accelerated cost recovery system and modified accelerated cost
recovery system is used for income tax purposes. Cost of major renewals and
betterments that extend the life of the property and equipment are capitalized.
Expenditures for maintenance and repairs are charged to expenses as incurred.
F. Financial risk - The Company regularly maintains bank account
balances in excess of FDIC insurable limit.
G. Income Taxes - The Company adopted the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
which requires a company to recognize deferred tax liabilities and
assets for the expected future tax consequences of events that have
been recognized in a Company's financial statements or tax returns.
Under this method, deferred tax liabilities and assets are determined
based on the differences between the financial statement carrying
amounts and tax basis of assets and liabilities using expected tax
rates in effect in the years in which the differences are expected to
reverse. The Company recognized the benefit of net operating loss
carryforwards applying the valuation allowance, which requires that
the tax benefit be limited, based on the weight of available evidence
and the probability that some portion of the deferred tax asset will
not be realized.
H. Financial Instruments - The Company's financial instruments include
cash, cash equivalents, trade receivables and payables, long-term
debt and loans from related parties for which carrying amounts
approximate fair value. It is not practicable to estimate the fair
value of related party loans and long-term debt.
I. Stock-Based Compensation - The Company has elected to follow Account
Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees (APB25) and related interpretations in accounting for its
employee stock options. Under APB25, because the exercise price of
employee stock options equals the market price of the underlying
stock on the date of grant, no compensation expense is recorded.
Effective October 1, 1997, the Company has adopted the disclosure
only provisions of Statement of Financial Accounting Standards No.
123, Accounting for Stock-Based Compensation (Statement 123).
7
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 2 - PROCEEDINGS UNDER CHAPTER 11:
The Company operated under Chapter 11 proceedings for the period
September 7, 1993 through November 15, 1994 when, on the later date, the order
confirming the Plan of Reorganization was entered by the United States
Bankruptcy Court, District of New Jersey. The settlement of unsecured claims
under the confirmed Plan of Reorganization totaling 35% of allowed claims for
accounts payable and accrued expenses provided for the following payments to be
made subsequent to November 15, 1994:
%
10 From after tax proceeds from termination of the company's pension plan
5 One year after initial payout
5 Two years after initial payout
15 Three years after initial payout
Pre-petition liabilities in accordance with the November 15, 1994
confirmed plan of reorganization were compromised of the following:
Accounts payable $ 702,233
Accrued expenses:
Commissions payable 126,370
Vacation pay 96,250
Severance pay 25,108
Other 78,282
------------
Total September 30, 1994 1,028,243
Court authorized payments/adjustments (75,073)
------------
Balance subject to settlement 953,170
Amount discharged and/or paid to date (953,170)
------------
Chapter 11 settlement total June 30, 1999 $ --
============
8
<PAGE>
<TABLE>
<CAPTION>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 3 - INVENTORIES
JUNE 30, SEPTEMBER 30,
1999 1998
------------- -------------
<S> <C> <C>
Raw material $ 958,606 $ 707,729
Work in process 605,438 532,470
Finished goods 291,386 204,046
------------- -------------
Total inventories $ 1,855,430 $ 1,444,245
============= =============
NOTE 4 - PLANT AND EQUIPMENT:
JUNE 30, SEPTEMBER 30,
1999 1998
------------- -------------
<S> <C> <C>
Building and improvements $ 62,329 $ 62,329
Machinery and equipment 1,675,511 1,670,068
Office furniture and fixtures 583,232 582,518
Transportation equipment 13,188 13,188
------------- -------------
Total 2,334,260 2,328,103
Less Accumulated depreciation 1,937,031 1,870,943
------------- -------------
Net depreciated cost $ 397,229 $ 457,160
============= =============
NOTE 5 - NOTES PAYABLE
JUNE 30, SEPTEMBER 30,
1999 1998
------------- -------------
<S> <C> <C>
A. Board of Directors:
Notes, subordinated to NJEDA loan,
dated February 6, 1995, payable in monthly
installments of $5,449 including interest at
9% per annum through September 30, 2001:
$ 262,500 $ 262,500
Less current portion 43,530 43,530
------------- -------------
Noncurrent portion $ 218,970 $ 218,970
============= =============
</TABLE>
Interest expense for the fiscal years ended September 30, 1998 and 1997 amounted
to $24,035 and $24,757, respectively. No principal payments were made due to
these notes being subordinated to the NJEDA loan.
9
<PAGE>
<TABLE>
<CAPTION>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
JUNE 30, SEPTEMBER 30,
1999 1998
------------- -------------
<S> <C> <C>
B. New Jersey Economic Development
Authority:
Notes, dated July 31, 1996, payable in
monthly installments of $7,620
including interest at 6.75% per
annum through June 30, 2003: $ 324,846 $ 380,829
Less current portion 69,032 73,333
------------- -------------
Noncurrent portion $ 255,814 $ 307,496
============= =============
</TABLE>
Interest expense for the fiscal years ended September 30, 1998 and 1997 amounted
to $28,061 and $23,066, respectively. Future principal payments under the terms
of the agreement are as follows:
FISCAL YEAR AMOUNT
----------- ------
1999 73,333
2000 72,647
2001 77,778
2002 83,271
2003 73,800
--------
TOTAL: $380,829
========
NOTE 6 - CONCENTRATION OF CREDIT RISK:
The Company maintains cash and cash equivalents at three financial
institutions that are insured by the Federal Deposit Insurance Corporation
(FDIC) and/or Securities Investor Protection Corporation (SIPC). The Company at
times during the year had amounts in these institutions that exceeded insurable
limits of $100,000 FDIC and $500,000 SIPC. In the normal course of business the
Company extends unsecured credit to customers in the United States and Asia.
10
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 7 - COMMITMENTS AND CONTINGENCIES:
Commitments:
A. Retirement Plans:
Effective July 1, 1989, the Company adopted a defined contribution
plan for all eligible employees. In accordance with Internal Revenue
Code Section 401(k), the plan provides for elective deferral of up to
15% of total compensation. The plan further provided for a Company
matching contribution of 25% of the elective deferral amount of each
participant that did not exceed 6% of total compensation. Effective
January 1, 1994, the matching Company contribution was suspended due
to the company's financial condition and pending reorganization.
Effective October 1, 1995, the Company reinstated a matching
contribution at 50% of the elective deferral amount for each
participant that does not exceed 6% of total compensation. The
amounts charged to operations were $33,792 and $37,581 for the years
ended September 30, 1998 and 1997, respectively.
B. Employee Stock Options Plans:
On February 26, 1987, the Stockholders approved the 1987 Incentive
Stock Option Plan, the 1987 Employee Stock Purchase Plan and the 1987
Stock Option Program for Non-Employee Directors. Subject to the
provisions of these plans, an aggregate of 150,000 shares of the
Company's stock was made available for option purchases; namely,
75,000 shares, 37, 500 shares and 37,500 shares, respectively. The
plans ended effective December 1996 and no further grants may be made
for options.
11
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
OPTION
------
PRICE PER SHARE NUMBER OF SHARES
--------------- ----------------
Shares under option at
September 30, 1995 $ 1.0625 81,250
Exercised $ 1.0625 (34,500)
Expired $ 1.0625 (250)
Shares under option at
September 30, 1996 $ 1.0625 46,500
Expired $ 1.0625 (20,000)
-------
Shares under option at
September 30, 1997 & 1998 $ 1.0625 26,500
=======
Lease Commitments:
Subsequent to the sale of the Company's facility in Randolph, New
Jersey on September 28, 1994, the company entered into a seven-year
lease for its present office and manufacturing facility in Hanover
Township, New Jersey with a five-year renewal option. Rent charged to
operations for the fiscal year ended September 30, 1998 was $227,400.
Annual rent for the initial seven-year term is $227,400 for the first
four years and $300,000 for years five through seven. Future minimum
lease payments required under the operating lease are as follows:
FISCAL YEAR AMOUNT
----------- ------
1999 $300,000
2000 300,000
2001 300,000
The Company leases office equipment under a five-year operating lease
with an option to upgrade after three years that it intends to
exercise. The annual lease payment for the term of the lease is
$17,617. Future lease payments required under the operating lease are
as follows:
12
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
FISCAL YEAR AMOUNT
----------- ------
1999 17,617
2000 17,617
2001 1,468
Contingencies:
A. Environmental Contingencies:
Following an investigation by the New Jersey Department of
Environmental Protection (NJDEP) of the Company's waste disposal
practices at a certain site that it formerly leased, the Company put
a ground water management plan into effect as approved by the
Department. Costs associated with this site are charged directly to
income as incurred. The owner of this site has notified the Company
that if the NJDEP investigation proves to have interfered with a sale
of the property, the owner may seek to hold the Company liable for
any loss it suffers as a result. However, corporate counsel has
informed management that, in their opinion, the lessor would not
prevail in any lawsuit filed due to the imposition by law of the
statute of limitations. Costs charged to operations in connection
with the water management plan amounted to $57,205 and $43,173 for
the years ended September 30, 1998 and 1997, respectively. The
Company estimates the expenditures in this regard for the fiscal year
ending September 30, 1999 will amount to approximately $52,000. The
Company will continue to be liable under the plan in all future years
until such time as the NJDEP releases it from all obligations
applicable thereto.
B. Contingent Subscription and Option Agreement:
On October 2, 1997, the Board of Directors of Boonton Electronics
Corporation (BEC) agreed to enter into a Subscription and Option
Agreement with G.E.M. USA, Inc. (GEM), a wholly-owned subsidiary of
General Electronique Mesure, S.A., whereby GEM shall have the option
to buy 435,984 shares of the common stock of BEC at an option price
of $3.24 per share. The term of the option agreement shall be for a
period of two years. GEM paid BEC $25,000 for this option and
simultaneously purchased 7,716 shares of BEC's common stock from the
corporation for $25,000.
13
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
Further, on June 30, 1997, the Board of Directors of BEC resolved to
enter into a Shared Facilities Agreement with B&K Precision, Inc.
(B&K), a wholly owned subsidiary of GEM, as additional consideration
for the above noted option. B&K shall pay BEC a monthly management
fee of $15,000 until May, 1999, at which time the management fee will
be $5,000 per month. They shall also pay rent at the same price per
square foot as BEC for the area sublet to B&K.
The effective date on both the above-noted agreements was October 1,
1997, one day subsequent to the fiscal year end, September 30, 1997.
The company also received payment of $50,000 on October 1, 1997.
C. Income Tax Contingencies:
The Company's income tax returns for the fiscal years ended September
30, 1996, 1997 and 1998 are subject to review.
NOTE 8 - COMMON AND TREASURY STOCK:
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1999 1998
---------- ------------
<S> <C> <C>
Common Stock:
$.10 par value, authorized 5,000,000
shares, issued and outstanding 2,387,332
shares and 1,644,301 shares, respectively. $ 238,733 $ 164,430
========== ==========
NOTE 9 - INCOME TAXES:
The components of the deferred tax asset are:
JUNE 30, SEPTEMBER 30,
1999 1998
---------- -------------
<S> <C> <C>
Deferred tax asset $2,867,591 $2,867,591
Less: Valuation allowance (1,854,462) (1,854,462)
---------- ----------
Net deferred tax asset $1,013,129 $1,013,129
========== ==========
</TABLE>
Financial Accounting Standards Board Statement No. 109, "Accounting for
Income Taxes", requires that the Company record a valuation allowance when it is
"more likely than not that some portion or all of the deferred tax assets will
not be realized". It further states that "forming a conclusion that a valuation
allowance is not needed is difficult when there is negative evidence such as
cumulative losses in recent years".
14
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
The ultimate realization of this deferred income tax asset depends on
the ability to generate sufficient taxable income in the future. The Company is
undergoing substantial restructuring changes and has made strategic realignments
of its operations in association with its Plan or Reorganization that management
believes will result in future profitability. While it is management's belief
that these measures will allow the total deferred income tax asset to be
realized by future operating results, the losses in recent years and a desire to
be conservative make it appropriate to record a valuation allowance.
Accordingly, the Company has provided a valuation allowance (based on
estimated future taxable income) for the portion of the total deferred income
tax asset that will not be realized as related to the operating loss
carryforward.
Income tax laws allow for the utilization of loss carryforwards over
periods not to exceed 15 and 7 years for Federal and State purposes,
respectively. If the Company is not able to generate sufficient taxable income
in the future through operating results, increases in the valuation allowance
will be required through a charge to expense (reducing stockholder's equity). In
the event the Company reports sufficient profitability to use all of the
deferred income tax assets, the valuation allowance will be eliminated through a
credit to expense (increasing stockholder's equity).
The following is a reconciliation of income taxes at the federal
statutory rate.
JUNE 30, JUNE 30,
1999 1998
--------- ---------
Computed income taxes at statutory rate $ -- $ 6,136
Recognition of net operating loss -- (6,136)
--------- ---------
Expense/(benefit) $ -- $ --
========= =========
The Company has net operating loss carryforwards for federal and state
purposes approximating $6,067,151 and $8,063,752 that will not begin to expire
until the year 2011 and 2003 respectively. These loss carryforwards can be
utilized to reduce future taxable income dollar for dollar.
15
<PAGE>
(Unaudited)
BOONTON ELECTRONICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 10 - SEGMENT INFORMATION:
The Company is engaged in the manufacture and sale of electronic test
and measurement equipment and management considers its business as a single
segment for reporting purposes.
A. The Company's export sales were as follows:
NINE MONTHS ENDED % OF
JUNE 30, AMOUNT TOTAL SALES
----------------- ---------- -----------
1999 $2,504,815 48%
1998 $1,961,972 42%
B. Customers sales to domestic government agencies were as follows:
NINE MONTHS ENDED % OF
JUNE 30, AMOUNT TOTAL SALES
----------------- ---------- -----------
1999 $ 291,097 6%
1998 $ 167,422 4%
NOTE 11 - EARNINGS PER SHARE:
Earnings per share have been computed by dividing net earnings by
the weighted average number of common shares outstanding of 2,338,954 for 1999
and 1,644,301 for 1998. Options to purchase a total of 428,268 shares of common
stock at $3.24 per share were not included because the exercise price exceeded
the average market price, which would result in antidilution. Incentive stock
options to purchase 26,500 shares in 1998 and 26,500 shares in 1997 were not
included because they were insignificant.
16
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS
NINE MONTHS ENDED JUNE 30, 1999
Sales for the nine months ended June 30, 1999 were $592,516 more than
the prior year due to the increase in export shipments. Cost of goods sold was
$384,228 higher than the prior year due to the higher volume in sales. The gross
profit, as percentage of sales decreased to 48.1% versus the prior year's 49.8%.
Research and development expense was lower than the prior year by $143,328 due
to capitalization of software/hardware new product development. The other
operating expense categories were $308,277 higher than the prior year due to
reorganizational expenses. Income from operations was $43,339 higher than the
prior year due to the increased sales volume coupled with the decrease in
development expense. There was a net loss of $38,345 versus a prior year's net
loss of $13,594.
The June 30, 1999 production inventory balance was $358,593 higher than
the September 30, 1998 balance. The demonstrator inventory balance increased by
$52,592 over the September balance for demonstrator additions for new products.
Accounts receivable was down $228,812 from September's balance. The current
ratio at June 30, 1999 was 2.47 versus September's 2.07.
The company's backlog at June 30, 1999 was $712,112, which was $269,556
below the backlog balance as of September 30, 1998. Bookings for the quarter and
month ended June 30, 1999 were $1,740,979 and $555,785, respectively.
17
<PAGE>
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.
BOONTON ELECTRONICS CORPORATION
By: /s/ YVES GUYOMAR
-------------------------------------
Yves Guyomar, President and Chief
Executive Officer
Date: August 23, 1999
BY: /s/ ROBERT HANNON
-------------------------------------
Robert Hannon, Controller
Date: August 23, 1999
August 23, 1999
18
<PAGE>
BOONTON ELECTRONICS CORPORATION
INDEX TO EXHIBIT FILED
IN THE QUARTERLY REPORT ON FORM 10-QSB
FOR THE NINE MONTHS ENDED JUNE 30, 1998
EXHIBIT NO. PAGE
27 Financial Data Sheet 20
19
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000013191
<NAME> Boonton Electronics
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 113,452
<SECURITIES> 0
<RECEIVABLES> 1,070,469
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0
0
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<INCOME-CONTINUING> (39,783)
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<NET-INCOME> (39,783)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
