UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-2892
THE DEWEY ELECTRONICS CORPORATION
(Exact name of registrant as specified in charter)
NEW YORK 13-1803974
(State of Incorporation) (I.R.S. Employer Identification No.)
27 Muller Road, Oakland, New Jersey 07436
(Address of principal executive offices)Zip Code
201-337-4700
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common stock, $.01 par value
(Title of class)
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 ___.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form l0-K.
The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant, computed by reference to the
price at which the common stock was sold as of the close of business on
August 31, 2000: $1,473,189.
The number of shares outstanding of the registrant's common stock, $.01
par value was 1,339,531 at August 31, 2000.
Page 1 of 32 Pages
THE DEWEY ELECTRONICS CORPORATION
TABLE OF CONTENTS
Item Page
PART I
1. Business 3
2. Properties 5
3. Legal Proceedings 5
4. Submission of Matters to a Vote of Security Holders 5
PART II
5. Market for Registrant's Common Equity and Related
Stockholder Matters 6
6. Selected Financial Data 7
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
8. Financial Statements and Supplementary Data 14
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 28
PART III
10. Directors and Executive Officers of the Registrant 29
11. Executive Compensation 29
12. Security Ownership of Certain Beneficial Owners and
Management 29
13. Certain Relationships and Related Transactions 29
PART IV
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K 30
15. Signatures 31
PART I
Item 1. BUSINESS
The Dewey Electronics Corporation (the "Company") was incorporated in
the State of New York in 1955. It is a systems oriented military
electronics development, design and manufacturing organization based in
Oakland, New Jersey. The Company has two industry segments:
electronics, and leisure and recreation.
In the electronics segment, the Company produces sophisticated
electronics and electromechanical systems for the U.S. military as a
prime contractor and subcontractor. Its electronics business includes
spare and replacement parts.
In the leisure and recreation segment, the Company, through its HEDCO
division, designs, manufactures and markets advanced, sophisticated
snowmaking equipment.
The sales and operating profit of each industry segment and the
identifiable assets attributed to each segment for the last three
fiscal years ended June 30, 2000 are set forth in Note K Operating
Segments of the Notes to the Financial Statements.
During the last three fiscal years, there have been no material
expenditures for Company-sponsored or customer-sponsored research and
development activities.
Compliance with Federal, state and local environmental provisions has
had no material effect upon capital expenditures, earnings or the
competitive position of the Company. In addition, there are no
material capital expenditures anticipated for environmental control
facilities.
As of August 31, 2000, the Company had a work force of 39 employees, of
whom 9 were technical or professional personnel. Last year at the same
date, the work force included 36 employees, of whom 10 were technical
or professional personnel. The increase is the result of continued
production efforts in the electronics segment of business.
Fluctuations in the work force may also result from the seasonal nature
of the leisure and recreation segment of business.
ELECTRONICS SEGMENT
This segment of business accounted for 96% of total revenues in fiscal
year 2000, 97% of total revenues in fiscal 1999 and 86% of total
revenues in fiscal 1998.
Prior to fiscal year 1997, most of the Company's electronics segment
revenues were derived from products manufactured, either as prime
contractor or subcontractor, for the U.S. Navy. In August 1996, the
Company was awarded a contract with the U.S. Army to provide diesel
operated tactical generator sets with five annual purchasing periods
including price escalations each year. With the completion of
performance of the Company's contracts under the Navy's ADCAP torpedo
program, most electronics segment revenues in recent years have arisen
from performance of work for the U.S. Army under this contract.
The Company has continued to pursue both long-term and short-term
awards from various United States Government agencies and related
business sectors in its areas of electronic and mechanical expertise.
The Company, however, is bidding for such contracts in competition with
other companies, including other small firms as well as Fortune 500
companies, in a time of diminished and less predictable military
spending.
Since substantially all of the Company's electronics business is
derived from contracts with various agencies of the United States
Government (the "Government") or subcontracts with prime Government
contractors, the loss of substantial Government business would have a
material adverse effect on the business.
For the most part, working capital requirements for the electronics
segment of business are funded by progress payments provided by the
Government.
All of the Company's contracts with the Government are subject to the
standard provision for termination at the convenience of the
Government.
Although raw materials are generally available from a number of
suppliers, the Company is at times dependent upon a specific supplier
or a limited number of suppliers of material for a particular contract
and has occasionally experienced some delays in deliveries. Such
delays have not had a material effect on operations; however, the
Company cannot provide any assurances that future delays, if any, will
not have a material adverse effect.
Reference is made to Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations for additional
information regarding this segment.
LEISURE AND RECREATION SEGMENT
The leisure and recreation segment of business accounted for 4% of the
Company's revenues in fiscal year 2000, 3% of the Company's revenues in
fiscal 1999 and 14% of the Company's revenues in fiscal 1998.
Snowmaking equipment is sold to ski areas as original equipment or as
replacements for existing equipment. Most snowmaking equipment is paid
for in full at delivery to the customer. In other cases, such
equipment is sold under a sales contract that provides for a
substantial down payment and retention of a security interest in the
equipment until full payment is received. Typically, full payment is
made within one year. The Company has not experienced any losses due
to resale of the equipment following default by customers. The Company
services the equipment at the purchaser's expense after a warranty
period that expires at the end of the snowmaking season in which the
sale occurs.
The Company has sold snowmaking equipment to over three hundred
different locations in the United States and abroad. Marketing is
performed by the Company's employees in the domestic market and by
distributors and representatives in foreign markets. In fiscal 2000,
all revenues were from domestic sales.
Orders for snowmaking equipment have normally been received during the
first and fourth quarters of the fiscal year, though this pattern has
been changing. For the most part, shipments are made and revenues
recorded during the second quarter. Production usually takes place in
the first and second quarters, and it is during this period that
inventory is generated and working capital demands are the greatest.
While there may be some temporary delays, problems regarding source and
availability of raw materials have had no material adverse effect on
operations of this segment.
Reference is made to Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations for additional
information regarding this segment. As discussed in Item 7, in the
fourth quarter of fiscal year 2000, the Company reduced the value of
its inventory of snowmaking machines and parts in the amount of
$353,092, resulting in a year 2000 charge to income.
Item 2. PROPERTIES
The Company's 49,200 square foot facility at 27 Muller Road, Oakland,
New Jersey, located on 90 acres of land owned by the Company, was
constructed in 1981. This facility houses executive offices and
manufacturing operations and is used primarily for the electronics
segment of business. Approximately 90% of this facility is being
utilized for production (one shift), staging and storage.
Under the terms of a mortgage note to Sovereign Bank described in Item
7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations both the land and building are subject to the
lien of a mortgage securing indebtedness in the amount of $1,665,686.
The Company also has a line of credit with the Bank, under which the
Company may borrow up to an additional $500,000 that would be secured
by a lien on substantially all of the Company's' machinery, equipment
and other personal property.
Item 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of fiscal year 2000.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's common stock is traded over-the-counter under the symbol
"DEWY".
The table below sets forth the high and low market prices of the
Company's common stock for each quarter during the last two fiscal
years.
Quarterly Common Stock Price Range
Fiscal Year 2000 Fiscal Year 1999
Quarter High Low High Low
1st $2.375 $1.1875 $ 0.6563 $ 0.4063
2nd 2.625 2.375 0.4063 0.3125
3rd 3.125 2.1875 0.6250 0.2813
4th 2.625 1.3125 2.0000 0.6250
Price information is based on over-the-counter market quotations, which
reflect inter-dealer prices, without retail mark-up, mark-down or
commissions, and may not necessarily represent actual transactions.
There were no dividends declared or paid during the fiscal years 2000
and 1999. The Company has no plans to pay dividends in the foreseeable
future.
The number of holders of record of the Company's common stock as of
August 31, 2000 was 805.
Item 6. Selected Financial Data
(In thousands of dollars, except per share amounts)
Year ended June 30,
2000 1999 1998 1997 1996
Revenues $10,409(1) $8,632(3) $2,325 $3,828 $4,595
Income/(loss) before
income taxes $1,543(2) $ 935(3) $ (748) $ (155) $ 409
Net income/(loss) $926(1)(2) $ 561(3) $ (447) $ 7(4) $ 244
Net income/(loss) per
share basic and diluted $.69 $.42 $ (.33) $ .01 $ .18
Cash dividends per
common share -- -- -- -- --
Total assets $5,155 $5,776 $4,713 $4,645 $5,372
Long-term obligations $1,829 $2,427 $2,481 $1,843 $2,366
Working capital $3,131 $2,413 $1,444 $1,508 $1,879
Stockholders' equity $2,275 $1,349 $ 788 $1,235 $1,227
(1) Revenues in fiscal year 2000 includes $702 as a result of
notification of the final closeout of a contract with the U.S.Navy.
(2) Income in fiscal year 2000 includes a charge for an inventory
provision in the amount of $353.
(3) The increases in this selected financial data relate to the
Company's contract with the U.S. Army to supply diesel operated
tacital generator sets over five annual purchasing periods.
(4) In fiscal 1997, net income was increased by an extraordinary gain
of $100 net of income taxes.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
"Selected Financial Data" and the Company's Financial Statements,
including the related notes thereto, appearing elsewhere in this Annual
Report. Certain statements in this Form 10-K may be deemed "forward-
looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical fact, that address activities, events or developments that
the Company or management intends, expects, projects, believes or
anticipates will or may occur in the future are forward-looking
statements. Such statements are based upon certain assumptions and
assessments made by management of the Company in light of its
experience and its perception of historical trends, current conditions,
expected future developments and other factors it believes to be
appropriate. The forward-looking statements included in this Form 10-K
are also subject to a number of material risks and uncertainties,
including but not limited to economic, governmental, competitive and
technological factors affecting the Company's operations, markets,
products, services and prices. Such forward-looking statements are not
guarantees of future performance and actual results, developments and
business decisions may differ from those envisaged by such forward-
looking statements.
The sales and operating profit of each industry segment and the
identifiable assets attributed to each segment for the last three
fiscal years ended June 30, 2000, 1999, and 1998 are set forth in Note
K Operating Segments of the Notes to the Financial Statements.
Results of Operations
The Company's fiscal year ends on June 30. Accordingly, all references
to years in this Management's Discussion refer to the fiscal year ended
June 30 of the indicated year. Also, when referred to herein,
operating profit means net sales less operating expenses, without
deductions for general corporate expenses, interest and income taxes.
Revenues
Revenues for fiscal year 2000 increased by 21% over last year and were
347% higher than revenues for 1998. Revenues increased in both the
leisure and recreation segment and in the electronics segment.
During the fourth quarter of fiscal year 2000, the Company received
notice from the U.S. Government Contract Administration Office that a
contract with the U.S. Navy was closed. The Company had provided a
current liability of $701,608 contingent upon possible changes to the
contract. These changes never occurred. As a result of this contract
close out, the Company recognized this as revenue during the fourth
quarter of 2000.
Electronic Products
Revenues from the electronics segment accounted for 96% of total
revenues in 2000 and 97% of total revenues in 1999.
In 1996, the Company was awarded a contract with the U.S. Army to
supply diesel operated tactical generator sets with five annual
purchasing periods including price escalations for each year. The
Government may place orders for its tactical generator requirements
through this contract until the end of August 2001. Though it is not
obligated to do so, the Army has placed an annual production order each
year plus some additional orders. The Company has been receiving
smaller generator set orders throughout the contract period, in
addition to annual production orders, for delivery to the Army, Navy,
Air Force and the Marines. The amount of orders for this product has
amounted to approximately $21 million since its initial award, which
funded $1 million in 1996.
The Department of Defense had issued a fuel policy requiring that all
mobile electric power sets (includes tactical generators) will require
only diesel fuels and that those using gasoline fuels will be
eliminated.
The Company anticipates that the Government will continue to place
orders for these diesel operated tactical generator sets. However, no
assurances can be given that they will do so. Orders not yet received
are not reflected in the fiscal year end backlog figures provided
below.
The tactical generator set contract accounted for 78% of the electronic
segment revenues in fiscal year 2000 and 94% in 1999.
The remaining 22% of year 2000 electronic product revenues (6% in 1999)
was the result of various orders, more limited in scope and duration,
that were generally for replacement parts for previously supplied
equipment used by the Department of Defense and shipbuilders and for
other projects performed as a subcontractor. A large part of such
other revenues continues to be attributable to the Company's Pitometer
Log Division, which manufactures speed and distance measuring
instrumentation for the U.S. Navy.
In 1998, the Company experienced a period of reduced revenues. Due to
engineering changes initiated by the Company and subsequently approved
by the U.S. Army, delivery of diesel operated tactical generator sets
were rescheduled from March 1998 to November 1998. As a result of this
delay, production efforts were also delayed causing lower revenue
recognition during this period. This contract accounted for 40% of
electronic segment revenues in 1998. Various orders for replacement
parts accounted for 49% of such 1998 revenues and the remaining 11% was
from production efforts towards the completion of the Company's
contracts under the U.S. Navy's ADCAP torpedo program.
The aggregate value of the Company's backlog of electronic products not
previously recorded as revenues was approximately $4 million on June
30, 2000, 1999 and 1998. Almost all of this backlog is attributable to
the U.S. Army contract for diesel operated tactical generator sets. It
is estimated that the present backlog will be shipped during the next
12 months and recognized as fiscal year 2001 revenues.
Leisure and Recreation
In the leisure and recreation segment, sales of snowmaking machines and
related parts amounted to $375,546 in fiscal year 2000. In fiscal
years 1999 and 1998 sales amounted to $276,657 and $328,939
respectively. There were no export sales of snowmaking machines during
the last three fiscal years.
The Company is continuing its marketing efforts to increase its market
share by utilizing different strategies dependent upon regional
locations. Competition in foreign markets remains to be stronger than
in the domestic market.
There was no backlog of orders for snowmaking equipment as of June 30,
2000. Last year, there was a backlog of orders in the amount of
$201,500. There was no backlog of orders at June 30, 1998.
Gross Profit
Gross Profit was 26% in 2000, 23% in 1999 and 12% in 1998.
In the electronics segment, gross profit was 30% of revenues as a
result of continued production efforts towards the contract for diesel
operated tactical generator sets. In 1999, gross profit was 24% as
full production resumed for this project. In fiscal year 1998, gross
profit was 10% due to delayed production resulting from engineering
changes as explained above.
During the fourth quarter of fiscal year 2000, the Company's management
reviewed inventory for pricing and marketability. Inventory is
comprised almost entirely of machines and parts for its snowmaking
business. Consideration was given (among other factors) to the number
of snowmaking machines at customer sites requiring support services,
profitability and inventory carrying costs.
As a result, management determined that a reduction of inventory in the
amount of $353,092 was appropriate.
Selling, General and Administrative Expenses
In 2000, selling, general and administrative expenses remained at 10%
of revenues ($939,094) as they were in 1999 ($841,107). In 1998, these
expenses amounted to $827,776 (36% of revenues).
Interest Expense
Interest expense for the last three fiscal years amounted to $204,283
in 2000, $216,017 in 1999 and $212,738 in 1998.
Under a borrowing arrangement with Sovereign Bank, effective September
18, 1997, the interest rate for the Company's mortgage note is 8.25%.
The Company also has a line of credit facility under the Sovereign Bank
borrowing arrangement which carries an interest rate of .75% over the
prime rate for its outstanding borrowings. The prime rate as of June
30, 2000 was 9.5%. Interest payments made to Sovereign Bank constitute
essentially all of the Company's interest expense.
Other Income-Net
The amounts reported as Other Income represent the net effect of
interest and miscellaneous items such as the sale of scrap, discounts,
bank transaction fees and other like items.
During fiscal year 2000, Other Income of $4,592 was comprised of
interest income of $4,866 partially offset by the net effect of
miscellaneous items of $274.
Other Income for fiscal year 1999 represented the sum of interest
income of $870 and the net income of miscellaneous scrap sales of
$4,615.
In fiscal year 1998, Other Income was the sum of interest income of
$6,827 and miscellaneous scrap sales of $14,045.
Income Taxes
Deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes, and (b) operating loss carryforwards.
The tax (provision)benefit for the fiscal years 2000, 1999, and 1998
was at an effective rate of 40%.
Inflation
Historically, inflation and price changes have not had a material
effect on operations.
Liquidity and Capital Resources
During fiscal year 2000, the net cash provided by operating activities
was $1,757,904, as compared to $162,544 in 1999 and cash used in 1998
of $613,007.
Expenditures for plant, property and equipment amounted to $116,229 in
2000, $58,341 in 1999 and $17,490 in 1998.
In fiscal year 2000, $754,055 was used by financing activities which
includes a voluntary principal reduction payment towards the Company's
mortgage with Sovereign Bank. This additional principal payment was in
the amount of $500,000.
Net cash provided by financing activities in 1999 was $50,207 as a
result of short-term borrowings against the Company's Line of Credit
with Sovereign Bank.
In fiscal 1998, net cash provided by financing activities amounted to
$446,888.
On September 18, 1997, the Company entered into borrowing arrangements
with Sovereign Bank (the "Bank") under which:
- The Company borrowed $2,300,000 at an interest rate of 8.25% per
annum, payable in monthly installments of approximately $20,000 with a
final maturity in year 2002, evidenced by delivery of a Mortgage Note
Payable to the Bank (the "Mortgage Note").
- The Bank agreed to provide up to an additional $500,000 under a line-
of-credit agreement, to be evidenced by promissory notes bearing
interest at a rate of .75% over the prime rate that will become due and
payable on October 31 of each year. The prime rate as of June 30, 2000
was 9.50%. At the Bank's discretion, this line of credit may be
renewed. As of June 30, 2000, there were no outstanding borrowings
against this line of credit.
The Mortgage Note is secured by a first mortgage on all of the
Company's land and its building. Borrowings under the line-of-credit
arrangement are secured by a first lien on all of the Company's
machinery, equipment and other personal property.
Approximately $1,900,000 of the proceeds from the issuance of the
Mortgage Note was applied to the prepayment in full of the outstanding
balances due from the Company to Fleet Bank under its secured term loan
agreement with the Company and to New Jersey Economic Development
Authority under a mortgage note. The interest rate on the prepaid
indebtedness was 9% per annum. The prepaid indebtedness was secured by
liens on virtually all of the Company's real and personal property.
Under the former term loan agreement, the Company was subject to
numerous affirmative and negative covenants containing working capital,
net worth and other financial tests. The new borrowing arrangements
with the Bank contain no such financial test covenants.
The Company continues to meet its short-term liquidity needs arising
out of electronic product operations through a combination of progress
payments on government contracts (based on costs incurred) and billings
at the time of delivery of products.
The Company had no material commitments for capital expenditures as of
the end of the 2000 fiscal year.
The Company owns approximately 90 acres of land and the building it
occupies in Bergen County, New Jersey, which are carried on its books
at a net value of approximately $700,000. This property is adjacent to
a full interchange of Interstate Route 287. Management continues to
investigate possible uses of this property which would be favorable to
the Company's stockholders' equity.
Recent Pronouncements
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS No. 133),
establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires companies to
recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair
value. We have adopted SFAS No. 133 in the first quarter of fiscal
2001, in accordance with the deferral provision in SFAS No. 137. The
adoption of SFAS No. 133 did not have a material effect on our
financial statements.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements." SAB 101 summarizes certain of the SEC's views
in applying generally accepted accounting principles to revenue
recognition in financial statements. We are required to adopt SAB 101
in the fourth quarter of fiscal 2001. We anticipate that the adoption
of SAB 101 will not have a significant impact on our financial
statements.
Electronics Segment
Most of the Company's revenues are derived from its electronic product
segment. This segment of operations is comprised of business with the
U.S. Department of Defense or with other Government contractors. Long-
term contracts with the U.S. Department of Defense have provided most
of electronic segment revenues. The balance of such revenues is
primarily for replacement parts, which are principally driven by
requirements of the U.S. Navy and continue to remain at relatively
stable levels.
In recent years, the Company has been directing its strategy to bid on
projects which are more likely to be funded by the Government and more
resistant to budget cuts. The Company's contract with the U.S. Army to
manufacture diesel operated tactical generator sets consists of a five
year program with the Army placing orders each year from 1997 through
2001, based on a predetermined estimated quantity. The Department of
Defense has issued a fuel policy requiring that in the future all
mobile electric power sets (includes tactical generators) will require
only diesel fuels and that those using gasoline fuels will be
eliminated. It is expected that the diesel operated tactical generator
program will continue to be considered necessary to national defense
and provide a steady workflow, but no assurance can be given that the
Army will place further orders under this program. The Company
continues to explore areas of business which will provide continued
stability and growth.
Electronic product revenues are determined by the percentage of
completion method of accounting. The use of estimates to complete
projects is required under this accounting method. These estimates are
reviewed by management on an ongoing basis and are adjusted when
necessary in the opinion of management. No significant adjustments are
anticipated to be made to current estimates, but changes in contract
requirements and the efforts needed to meet such changes are normal
events in the defense electronics industry.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements
Page
Independent Auditors' Report 15
Financial Statements:
Balance Sheets, June 30, 2000 and 1999 16
Statements of Income (Loss), Years Ended June 30, 2000,
1999 and 1998 17
Statements of Stockholders' Equity, Years Ended June
30, 2000, 1999, and 1998 17
Statements of Cash Flows, Years Ended June 30, 2000,
1999, and 1998 18
Notes to the Financial Statements 19
All other schedules are omitted because they are not applicable or the
required information is shown in the Financial Statements or the Notes
thereto.
Independent Auditors' Report
Board of Directors of
The Dewey Electronics Corporation
Oakland, New Jersey
We have audited the accompanying balance sheets of The Dewey
Electronics Corporation as of June 30, 2000 and 1999, and the related
statements of income (loss), stockholders' equity and cash flows for
each of the three years in the period ended June 30, 2000. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of The Dewey
Electronics Corporation at June 30, 2000 and 1999 and the results of
its operations and its cash flows for each of the three years in the
period ended June 30, 2000 in conformity with accounting principles
generally accepted in the United States of America.
Deloitte & Touche LLP
September 13, 2000
Parsippany, New Jersey
Balance Sheets
June 30,
2000 1999
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $1,176,479 $ 288,859
Accounts receivable (includes U.S.
Government receivables of approximately
$925,000 in 2000 and $1,183,000 in 1999)
less allowance for doubtful accounts of
$20,000 in 2000 and $28,571 in 1999 1,349,965 1,211,841
Inventories 534,181 1,064,996
Contract costs and related estimated
profits in excess of billings 1,087,863 1,819,008
Deferred Tax Asset 170,475 --
Prepaid expenses and other current
assets 33,849 28,375
TOTAL CURRENT ASSETS 4,352,812 4,413,079
PROPERTY, PLANT AND EQUIPMENT:
Land and improvements 521,308 519,186
Building and improvements 1,838,083 1,799,383
Machinery and equipment 2,407,000 2,370,215
Furniture and fixtures 182,201 147,512
4,948,592 4,836,296
Less accumulated depreciation and
amortization 4,106,636 3,956,251
841,956 880,045
DEFERRED TAX ASSET -- 348,308
OTHER NON-CURRENT ASSETS 130,512 134,694
TOTAL ASSETS $5,325,280 $5,776,126
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $334,701 607,591
Accrued expenses and other liabilities 158,203 248,803
Accrued corporate income taxes 379,807 35,730
Pension costs accrued 155,772 152,722
Billings in excess of contract costs and
related estimated profits -- 701,608
Current portion of long-term debt 97,827 54,056
Note payable bank -- 200,000
TOTAL CURRENT LIABILITIES 1,126,310 2,000,510
LONG-TERM DEBT 1,567,859 2,165,685
OTHER LONG-TERM LIABILITIES 61,172 61,172
DEFERRED TAX LIABILITY 95,320 --
DUE TO RELATED PARTY 200,000 200,000
STOCKHOLDERS' EQUITY:
Preferred stock, par value $1.00;
authorized 250,000 shares, issued
and outstanding, none -- --
Common stock, par value $.01; authorized
3,000,000 shares; issued and
outstanding 1,693,397 in 2000 and 1999. 16,934 16,934
Paid-in capital 2,835,307 2,835,307
Accumulated deficit (57,525) (983,385)
2,794,716 1,868,856
Less: Treasury stock, 353,866 shares in
2000 and 1999, at cost 520,097 520,097
2,274,619 1,348,759
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,325,280 $ 5,776,126
See notes to the financial statements
Statements of Income (Loss)
Years ended June 30,
2000 1999 1998
Revenues $10,408,958 $8,632,261 $2,324,597
Cost of revenues 7,727,083 6,645,599 2,052,787
Gross profit 2,681,875 1,986,662 271,810
Selling, general and
administrative expenses 939,094 841,107 827,776
Operating profit/(loss) 1,742,781 1,145,555 (555,966)
Interest expense (204,283) (216,017) (212,738)
Other income - net 4,592 5,485 20,872
Income/(loss) before income
taxes 1,543,090 935,023 (747,832)
Income tax (provision)/benefit (617,230) (374,000) 301,028
NET INCOME/(LOSS) $925,860 $561,023 $(446,804)
NET INCOME/(LOSS) PER COMMON
SHARE BASIC AND DILUTED $ .69 $ .42 $ (.33)
Statements of Stockholders' Equity
Treasury stock
Common Stock at cost
Paid-in Accumulated
Shares Amount capital Deficit Shares Amount
Balance,
June 30, 1997 1,693,397 $16,934 $2,835,307 $(1,097,604) 353,866 $520,097
Net Loss -- -- -- (446,804) -- --
Balance,
June 30, 1998 1,693,397 16,934 2,835,307 (1,544,408) 353,866 520,097
Net Income -- -- -- 561,023 -- --
Balance,
June 30, 1999 1,693,397 16,934 2,835,307 (983,385) 353,866 520,097
Net Income -- -- -- 925,860 -- --
Balance,
June 30, 2000 1,693,397 $16,934 $2,835,307 $ (57,525) 353,866 $520,097
See notes to the financial statements
Statements of Cash Flows
Years ended June 30,
2000 1999 1998
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (Loss) $925,860 $561,023 $(446,804)
Adjustments to reconcile net
income(loss) to net cash provided
by/(used in) operating activities:
Depreciation 154,318 142,228 138,818
Amortization 4,182 4,182 7,432
Deferred income taxes provision/
(benefit) 234,183 374,000 (301,028)
Provision for doubtful accounts (8,571) -- 20,000
Increase in accounts receivable (129,553) (762,307) (92,056)
Decrease/(Increase) in inventories 530,815 (14,969) 7,311
Decrease/(Increase) in contract
costs and related estimated profits
in excess of billings 731,145 (625,488) 77,587
(Increase)/Decrease in prepaid
expenses and other current assets (5,474) 32,181 (8,524)
(Increase) in other non-current
assets -- -- (83,642)
(Decrease)/Increase in accounts
payable (272,890) 426,066 65,443
(Decrease)/Increase in accrued
expenses and other liabilities (90,600) 32,545 (39,623)
Increase/(Decrease) in pension
costs accrued 3,050 (6,917) 43,606
(Decrease) in other long-term
liabilities -- -- (1,527)
(Decrease) in billings in excess
of contract costs and related
estimated profits (701,608) -- --
Increase in accrued corporate
income taxes 383,047 -- --
Total adjustments 832,044 (398,479) (166,203)
Net cash provided by/(used in)
operations 1,757,904 162,544 (613,007)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for plant, property
and equipment (116,229) (58,341) (17,490)
Net cash used in investing (116,229) (58,341) (17,490)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term
debt (554,055) (49,793) (1,953,112)
Repayment of short term borrowings (200,000) (100,000) --
Proceeds from short-term borrowings -- 200,000 100,000
Debt refinanced -- -- 2,300,000
Net cash (used in)/provided by
financing (754,055) 50,207 446,888
NET INCREASE/(DECREASE) IN CASH 887,620 154,410 (183,609)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 288,859 134,449 318,058
CASH AND CASH EQUIVALENTS AT
END OF YEAR $1,176,479 $288,859 $ 134,449
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Interest paid $206,159 $212,682 $200,587
Interest received $4,866 $846 $6,827
Income taxes paid $2,411 $525 $732
See notes to the financial statements.
Notes to the Financial Statements
Years ended June 30, 2000, 1999, and 1998
A. Summary of Significant Accounting Policies
1. Revenue Recognition
Revenues and estimated earnings under defense contracts are recorded
using the percentage-of-completion method of accounting, measured as
the percentage of costs incurred to estimated total costs for each
contract. Provisions for estimated losses on uncompleted contracts
are made in the period in which such losses are determined. Changes
in job performance, job conditions, and estimated profitability may
result in revisions to costs and income and are recognized in the
period in which the revisions are determined.
Since substantially all of the Company's electronics business comes
from contracts with various agencies of the United States Government
or subcontracts with prime Government contractors, the loss of
Government business would have a material adverse effect on this
segment of business.
In the Leisure and Recreation segment, revenues and earnings are
recorded when deliveries are made.
2. Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with a
maturity of three months or less at the date of purchase to be cash
equivalents.
3. Fair Value of Financial Instruments
The fair values of the Company's long-term debt and line of credit
borrowings are estimated based upon interest rates currently
available for borrowings with similar terms and maturities and
approximate the carrying values.
Due to the short term nature of cash, accounts receivable, accounts
payable, accrued expenses and other current liabilities, their
carrying value is a reasonable estimate of fair value.
4. Inventories
Cost is determined by the first-in, first-out (FIFO) method.
Inventories are valued at the lower of cost or market. Components of
cost include materials, direct labor and factory overhead.
5. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles require 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 reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.
6. Property, Plant, and Equipment
Property, plant, and equipment are stated at cost. Allowance for
depreciation is provided on a straight-line basis over estimated
useful lives of three to ten years for machinery and equipment, ten
years for furniture and fixtures, and twenty years for building and
improvements.
7. Loan Fees
Loan fees are capitalized by the Company and amortized utilizing the
straight-line basis over the term of the loan.
8. Long-Lived Assets
Whenever events indicate that the carrying values of long-lived
assets may not be recoverable, the Company evaluates the carrying
values of such assets using future undiscounted cash flows.
Management believes that, as of June 30, 2000, the carrying values of
such assets are appropriate.
9. Recent Pronouncements
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS No. 133),
establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires companies to
recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair
value. We have adopted SFAS No. 133 in the first quarter of fiscal
2001, in accordance with the deferral provision in SFAS No. 137. The
adoption of SFAS No. 133 did not have a material effect on our
financial statements.
In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue
Recognition in Financial Statements." SAB 101 summarizes certain of
the SEC's views in applying generally accepted accounting principles
to revenue recognition in financial statements. We are required to
adopt SAB 101 in the fourth quarter of fiscal 2001. We anticipate
that the adoption of SAB 101 will not have a significant impact on
our financial statements.
B. Inventories
Inventories consist of:
June 30,
2000 1999
Finished goods $ 67,000 $392,652
Work in progress 192,828 146,075
Raw materials 274,353 526,269
Net inventory $534,181 $1,064,996
C. Costs and Estimated Earnings on Uncompleted Contracts
June 30,
2000 1999
Costs incurred on
contracts in progress $16,124,396 $47,961,443
Estimated contract profit 5,552,406 7,686,643
21,676,802 55,648,086
Less: billings to date 20,588,939 54,530,686
$1,087,863 $1,117,400
Included in the accompanying balance sheets under the following
captions:
June 30,
2000 1999
Contract costs and related estimated
profits in excess of applicable
billings $1,087,863 $1,819,008
Billings in excess of contract costs
and related estimated profits -- (701,608)
$1,087,863 $1,117,400
D. Stock Option Plan
On December 2, 1998, the Employee Stock Option Committee adopted a
Stock Option Plan of 1998 which granted incentive stock options to
various executives and key employees to purchase shares of common
stock. Such options were granted at fair market value of the stock
on the date of grant and are exercisable over a ten year period
beginning December 2, 1999 to December 1, 2009.
The changes in the number of shares under option are as follows:
Number of Shares Exercise Price
Balance at June 30, 1998 -- --
Granted during 1999 27,500 $.5781
Exercised -- --
Balance, June 30, 1999 27,500 $.5781
Exercised -- --
Balance, June 30, 2000 27,500 $.5781
The Company applies Accounting Principles Board (APB) Opinion 25 and
related interpretations in accounting for the Plan. Accordingly, no
compensation cost had been recognized for the Plan. Had compensation
cost for the Plan been determined consistent with Statement of
Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" (SFAS 123), it would not have any material impact on
the financial statements for 2000, 1999, and 1998, respectively.
E. Long-Term Debt
Long-term debt at June 30, consists of:
2000 1999
8.25% Mortgage Note payable to
Sovereign Bank due in monthly
installments of approximately
$20,000 with a final maturity in
October 2002. $1,665,686 $2,219,741
Less current portion: 97,827 54,056
$1,567,859 $2,165,685
On September 18, 1997, the Company entered into an agreement with
Sovereign Bank, under which Sovereign Bank loaned the Company
$2,300,000 against delivery of a mortgage note payable at the rate of
8.25%. The proceeds of the loan were used to replace all outstanding
indebtedness to Fleet Bank and the New Jersey Economic Development
Authority and for working capital.
The Mortgage Note is secured by a first mortgage on the Company's
land and its building. Borrowings under the line-of-credit
arrangement are secured by a first lien on all of the Company's
machinery, equipment and other personal property. This borrowing
arrangement with the bank contains no financial ratio or other debt
covenants. In June 2000, the Company made a voluntary principal
reduction payment of $500,000.
Aggregate annual principal payments applicable to long-term debt for
the years subsequent to June 30, 2000, based on the mortgage loan
agreement in place at June 30, 2000 are:
2001 $97,827
2002 109,916
2003 1,457,943
$1,665,686
Management has evaluated its indebtedness and has determined based on
interest rates and related terms that the fair value of such debt
approximates it carrying value.
The Bank also agreed to provide a $500,000 line-of-credit facility to
be evidenced by promissory notes bearing interest at a rate of .75%
plus the prime rate. The prime rate at June 30, 2000 was 9.50%.
There were no outstanding borrowings against the line-of-credit
facility at June 30, 2000. Any outstanding borrowings under the line
of credit will become due and payable on October 31 of each year.
This line of credit may be renewed on an annual basis.
F. Taxes on Income
Deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax
purposes, and b) operating loss and tax credit carryforwards.
Federal income tax net operating loss carryforwards mainly arise from
temporary differences between financial and taxable income. The
Company's net operating loss ("NOL") carryforwards for tax purposes
were $635,000 at June 30, 2000 and are scheduled to expire in the
year 2008.
The Company believes that it is more likely than not that the NOL
carryforwards will be utilized prior to their expiration. This
belief is based upon the expectation that the Company will remain
profitable. In addition, the Company's real property, or a portion
thereof, will generate income prior to the expiration of the loss
carryforwards in an amount at least sufficient to realize the
deferred tax benefit.
As of June 30, 2000 based on pre-tax income of $1,543,090, the
relevant income and balance sheet accounts are detailed below:
Income Statement
Expense/Benefit) Years Ended June 30,
2000 1999 1998
Deferred
Federal $200,728 $285,416 $(230,171)
State 33,455 88,584 (70,857)
Current
Federal 296,853 -- --
State 86,194 -- --
$617,230 $374,000 $(301,028)
Deferred tax assets and liabilities as of June 30, 2000 and June 30,
1999 consisted of the following:
Deferred tax assets: (Current) 2000 1999
Net operating loss carryforward $ -- $ 462,967
Vacation accrual 29,235 28,890
Inventory valuation 141,240 --
$170,475 $ 491,857
Deferred tax liabilities: (Non-Current)
Depreciation $95,320 $ 114,659
Deferred contract income -- 67,860
$ 95,320 $ 182,519
G. Pension Plan
The Company has a non-contributory defined benefit retirement plan
covering all its employees. The plan is qualified under the Internal
Revenue Code. The method of determining the accrued benefit of an
employee is the amount equal to .8% of an employee's average monthly
salary times the number of years employed by the Company, to a
maximum of 35 years. The Company's policy is to contribute the
amounts allowable under Internal Revenue Service regulations. The
plan assets are invested primarily in a fixed income investment
account.
Net pension expense consists of the following:
Years ended June 30,
2000 1999 1998
Service cost $14,281 $15,268 $19,281
Interest cost on projected
benefit obligations 51,132 46,630 46,438
Expected return on assets (32,262) (28,665) (27,144)
Net amortization and deferrals 21,788 21,788 21,788
Net pension expense $54,939 $55,021 $60,363
In both 2000 and 1999, the Company recorded its minimum pension
liability as an other long term liability and a corresponding
intangible asset included in other non-current assets. The funded
status of the plan and the amount recognized on the balance sheet are
as follows:
June 30,
2000 1999
Actuarial present value of
benefit obligations:
Accumulated benefit obligation $662,084 $599,343
Projected benefit obligation $715,546 $650,630
Plan assets at fair value,
consisting of investments held
in a fixed income investment
account 471,594 384,808
Projected benefit obligation in
excess of plan assets 243,952 265,822
Unrecognized net gain/(loss) (38,263) (28,834)
Unrecognized net obligation (28,919) (43,379)
Prior service cost not yet
recognized in net periodic
pension cost (21,981) (29,309)
Adjustment required to recognize
minimum liability 35,701 50,235
Accrued pension cost $190,490 $214,535
Weighted average assumptions as
of December 31:
Expected long-term rate of return
on plan assets: 7.5% 7.5%
Discount rate: 7.75% 7.5%
Salary increase: 2.5% 2.5%
H. Income (Loss) Per Share
The number of shares used in the computation of earnings per share
was 1,339,531 in each of the years ended June 30, 2000, 1999 and
1998. Since the computation of diluted earnings (loss) per share is
not materially dilutive or anti-dilutive, the amounts reported for
basic and diluted earnings (loss) per share are the same.
I. Related Party Transaction
Due to Related Party represents notes payable to an officer
(stockholder) of the Company. The notes are due upon demand and are
subordinate to the mortgage note held by Sovereign Bank. The officer
(stockholder) has agreed not to seek repayment of the notes until the
mortgage loan has been repaid. Accordingly, the notes have been
classified as long-term obligations.
J. Other Income
Other income/(expense) consists of the following for the year ended
June 30:
2000 1999 1998
Sales of Scrap and
miscellaneous (expense)-net $ (274) $4,615 $14,045
Interest 4,866 870 6,827
$4,592 $5,485 $20,872
K. Operating Segments
The Company operates in two industries: electronics; and leisure and
recreation. Operations in the electronics industry is primarily
related to supplying electronics and electrical products and systems
for the United States Government as a prime contractor or
subcontractor. Operations in the leisure and recreation industry
involve the production and sale of snowmaking machinery and servicing
of such machinery at the purchaser's expense beyond the warranty
period. Total revenue by industry represents sales to unaffiliated
customers, as reported in the Company's Statement of Income(Loss).
There are no inter-segment sales.
Some operating expenses, including general corporate expenses, have
been allocated by specific identification or based on direct labor
for items which are not specifically identifiable. In computing
operating profit, none of the following items have been added or
deducted: interest expense, income taxes, and non-operating income.
Depreciation and amortization for the electronics industry and the
leisure and recreation industry, respectively, was approximately
$140,000 and $18,000 in 2000, $128,000 and $18,000 in 1999 and
$126,000 and $20,000 in 1998. Capital expenditures for the
electronics industry were approximately $116,000 in 2000, $58,000 in
1999 and $17,000 in 1998. There were no capital expenditures for the
leisure and recreation industry.
Identifiable assets by industry are those assets that are used in the
Company's operations in each industry. Corporate assets are
principally cash, prepaid expenses, and other current assets.
The following tables present information about reported segment
revenues, operating profit or loss, and assets, and reconcile such
segment information to the Company's consolidated totals:
Year ended June 30, 2000
(in thousands)
Leisure and Total
Electronics Recreation Company
Total revenue $10,034 $375 $10,409
Operating profit/(loss) $2,162 $(419) 1,743
Interest expense and other
income-net (200)
Income before income taxes $1,543
Identifiable assets at
June 30, 2000 $3,262 $683 $3,945
Corporate assets 1,210
Total assets at
June 30, 2000 $5,155
Year ended June 30, 1999
(in thousands)
Leisure and Total
Electronics Recreation Company
Total revenue $8,355 $ 277 $8,632
Operating profit/(loss) $1,227 $ (81) $1,146
Interest expense and other
income-net (211)
Income before income taxes $ 935
Identifiable assets at
June 30, 1999 $3,955 $1,155 $5,110
Corporate assets 666
Total assets at
June 30, 1999 $5,776
Year ended June 30, 1998
(in thousands)
Leisure and Total
Electronics Recreation Company
Total revenue $1,996 $ 329 $2,325
Operating (loss) $(501) $ (55) (556)
Interest expense and
other income-net (192)
Loss before income taxes $ (748)
Identifiable assets at
June 30, 1998 $2,520 $1,286 $3,806
Corporate assets 907
Total assets at
June 30, 1998 $4,713
L. Unaudited Quarterly Financial Data
Earnings per share
2000 Revenue Gross profit Net income basic and diluted
Sept. 30 $2,661,493 $589,686 $199,420 $.15
Dec. 31 2,091,283 448,682 78,528 $.06
Mar. 31 1,842,929 469,377 110,969 $.08
Jun. 30 3,813,253 1,174,130 536,943 $.40
Year $10,408,958 $2,681,875 $925,860 $.69
Earnings per share
1999 Revenue Gross profit Net income basic and diluted
Sept. 30 $1,740,718 $301,346 $ 42,748 $.03
Dec. 31 2,083,905 427,757 88,436 $.07
Mar. 31 2,025,158 609,759 215,515 $.16
Jun. 30 2,782,480 647,800 214,324 $.16
Year $8,632,261 $1,986,662 $561,023 $.42
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning Directors and Executive Officers of the
Registrant is incorporated herein by reference from the Company's
definitive proxy statement for the 2000 Annual Meeting of
Stockholders.
Item 11. EXECUTIVE COMPENSATION
Executive compensation information is incorporated herein by
reference from the Company's definitive proxy statement for the 2000
Annual Meeting of Stockholders.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information concerning security ownership of certain beneficial
owners and management is incorporated herein by reference from the
Company's definitive proxy statement for the 2000 Annual Meeting of
Stockholders.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information in response to this item is incorporated herein by
reference from the Company's definitive proxy statement for the 2000
Annual Meeting of Stockholders.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) (1) The following financial statements are included in Part II
Item 8:
Page
Independent Auditors' Report 15
Balance Sheets, June 30, 2000 and 1999 16
Statements of Income (Loss), Years Ended June 30,
2000, 1999 and 1998 17
Statements of Stockholders' Equity, Years Ended
June 30, 2000, 1999 and 1998 17
Statements of Cash Flows, Years Ended June 30,
2000, 1999 and 1998 18
Notes to Financial Statements 19
(2) Exhibits 32
A list of the exhibits required to be filed as part
of this report is set forth in the Index to Exhibits,
which immediately follows the signature page, and is
incorporated herein by this reference.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the Registrant
during the last quarter of the period covered by this
report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, The Dewey Electronics Corporation has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized:
THE DEWEY ELECTRONICS CORPORATION
__________/s/________________ ______________/s/_________________
BY: Gordon C. Dewey BY: Thom A. Velto, Treasurer
President, Chief Executive
Officer and Chief Financial
Officer
DATE: September 13, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:
___________/s/________________________ Date: September 13, 2000
Alexander A. Cameron, Director
__________/s/_________________________ Date: September 13, 2000
Frances D. Dewey, Director
__________/s/_________________________ Date: September 13, 2000
Gordon C. Dewey, Director
/s/ Date: September 13, 2000
John H.D. Dewey Director
__________/s/_________________________ Date: September 13, 2000
John G. McQuaid, Director
/s/ Date: September 13, 2000
Pat Nolletti Director
_________/s/___________ Date: September 13, 2000
Nathaniel Roberts Director
THE DEWEY ELECTRONICS CORPORATION
INDEX TO EXHIBITS
The following exhibits are filed as part of this report. For
convenience of reference, exhibits are listed according to the
numbers assigned in the Exhibit table to Regulation S-K.
Number Page No.
3 (a)- Certificate on Incorporation as amended. This item was
filed as part of the Registrant's Form 10-K for the year ended June 30,
1988 and is herein incorporated by reference
--
3 (b)- By Laws as amended. This item was filed as part of the
Registrant's Form 10-K for the year ended June 30, 1988 and is herein
incorporated by reference.
--
4 (a)- Agreement dated as of September 18, 1997 with Sovereign
Bank providing for the borrowing of $2,300,000 against issuance of a
mortgage note payable to the Bank. This item was filed as part of the
Registrant's Form 10-K for the year ended June 30, 1997 and is herein
incorporated by reference. --
4 (b)- Line of credit agreement dated as of September 18, 1997
with SovereignBank providing for the borrowing of up to $500,000. This
item was filed as part of the Registrant's Form 10-K for the year ended June
30, 1997 and is herein incorporated by reference.
--
4 (c)- 1983 Stock Option Plan. This item was filed with the
Registrant's Definitive Proxy Statement for the 1983 annual meeting of
stockholders on December 6, 1983 and is herein incorporated by reference.
--
4 (c)- 1998 Stock Option Plan. This item was filed with the
Registrant's Definitive Proxy Statement for the 1999 annual meeting of
stockholders on December 1, 1999 and is herein incorporated by reference.
--
